Can Economy Become Better Under Yar’Adua?

(By Peluola Adewale)

When Olusola Saraki, the Senate Leader in the second republic and the patriarch of the Kwara State politics led a group called the Northern Forum to pay him a visit, Umaru Musa Yar’Adua, then the President-elect, unfolded his economic agenda. Reacting to comments by Saraki, he said, “I will ensure that your effort does not end in vain. I will work to enthrone reforms within the economic sector. I will introduce new reforms that will ensure the betterment of all Nigerians” (This Day April 16, 2007). He added that new economic reforms “will transform the economy to provide jobs for the teeming population to ensure the transformation of Nigeria from underdeveloped country to a developed country.”

New economic reforms to “ensure the betterment of all Nigerians”! Is this a realization or appreciation of the fact that the economic reforms of his benefactor, Olusegun Obasanjo, were a curse to Nigerians? “Jobs for the teeming population.” Good talk, Obasanjo reforms sent many employed people back to the already saturated labour market. Is this a transformed Yar’ Adua? Throughout his electoral campaign spearheaded by Obasanjo, he maintained a mantra, “I will continue with the economic reforms”. Perhaps, he had to do that in order not to incur the wrath of the kingmaker, Obasanjo, to use the words of BBC’s Alex Last, “who plucked him from relative obscurity as a quiet northern state governor to be his successor” and so powerful that he could replace him even on the eve of the election! Don’t forget, Obasanjo had Maurice Iwu, the INEC Chairman, in his pouch.

Having attained power, does Yar’Adua now have political will or moral authority to attack the very matrix of the economic reforms, the profit interest? Yes, the profit interest of the beneficiaries of the economic reforms like the elements in Corporate Nigeria or Transcorp whose bountiful donation to his campaign funds has now constituted large part of his assets recently declared publicly. Businessmen and women are no Santa Claus; they invest where they are sure of reaping in multiple. It was not for fun or patriotism they thrust themselves in the forefront of the failed bid of Obasanjo to succeed himself, the “Third Term”. Now they have got third the term by proxy. Not taking chances, Obasanjo sold off a large number of public assets including the nation’s refineries and choicest oil blocs to them at the twilight of his administration. Don’t forget, Obasanjo has hugely controlling shares in the Transcorp.

The Financial Times of London, in a special report on Nigeria published July 12, 2007, has written of Nigeria’s “New Oligarchs”, the “mega-rich” close to Obasanjo. Not only did Obasanjo cheaply sell off the nation’s assets to his cronies, he also gave some of them with lucrative awards. Thus, Femi Otedola’s company, Zenon, has a licence to import and distribute diesel fuel used everyday by manufacturing industries, among others, to generate power in the face of near collapse of public electricity.

The sale of refineries at give away prices to Bluestar consortium, which is composed of Obasanjo’s company, the Transcorp, and cronies, has generated hue and cry. The review of the rotten deal was a major demand in the last general strike led by labour and civil society organisations.

The Group Executive Director of the Refineries in the Nigeria National Petroleum Corporation (NNPC) revealed to a special senate panel on the last general strike that the corporation had planned to effect certain repairs of the refineries, which would have made them efficient but was stopped by the Obasanjo administration, which preferred to sell them off (The Punch July 13, 2007). Yes, the opposition of the elements at the management of NNPC to the deal is everything but noble. They are out to defend self-serving interests; the nation’s refineries are parts of their goldmines. But their revelations show the barefaced robbery of the nation’s assets by Obasanjo and cronies.

In the face of deafening public outcry, the Bluestar gang has announced what it called the vacation of its interest in the refineries for 12 months with effect from July 19. Obviously, it had done that in order not to worsen the legitimacy crisis of Yar’Adua who is under moral obligation to protect its grasping interests.

But can Yar’Adua reverse the unwholesome, self-serving sales of the nation’s patrimony and public properties by Obasanjo? Yes, it is possible if things fall apart between Yar’Adua and Obasanjo. However, in the prevailing circumstance, one has to “perish the thought”. But as a hypothesis, Yar’Adua reverses the privatization; the question will arise, for whose interest? Yar’Adua is not against privatization, nay neo-liberal economic reforms. Thus, it would be a matter of transferring to Lucifer what has been taken from Satan.

Obviously, Yar’Adua is reforming the reforms to accommodate a section of the ruling class including Saraki and members of the Northern Union who had been elbowed out of the epicentre of public loots by Obasanjo’s version of economic reforms. Thus, Yar’Adua said, “I will ensure that your effort does not end in vain. I will work to enthrone reforms within the economic sector”. But in order to sweeten the pill, he put up a facade, “the new reforms that will ensure the betterment of all Nigerians”. After all, Saraki and members of Northern Union are Nigerians.

Don’t mind the promise of “jobs for the teeming population”. It is one of time-worn clichés for failed promises by capitalist politicians. The poor working masses can never be in the picture of Yar’Adua economic reforms. It is incongruous, in the first place, to expect a better deal for them on the basis of capitalist neo-liberal economic policies. In all cases globally, particularly in neo-colonial economies, neo-liberal economic reform has proved to be a nostrum for human development; usually, the poor working masses are the worst hit.

The economic hacks of the last administration threw up a succession of figures indicating economic growth. For example, it is reported that non-oil foreign direct investment rose from $700 million in 2004 to $4.1 billion last year. This may be true but the vast majority of this inflow was “hot” money, used for speculation and not real investment in production or facilities. Thus, share prices on the Nigerian Stock Exchange have doubled in the last year as gamblers have borrowed money to play the market. This is why these figures remained in the cloudy sky, if were not imaginary – nothing was on the ground to show for economic growth. For the working masses, the living standard has kept moving from frying pan to fire.

Economic reforms mean privatization of public asset, commercialization of social services, deregulation of oil industry and other anti-poor, pro-rich economic policies. All this is what Yar’Adua will implement. Like Obasanjo, he may create his own nouveau riche who only can see the wonders of the reforms.

The government receives about $190million from the sales of crude oil per day and the country foreign reserves hit $43billion recently. Economic reforms means that little or nothing is spent to improve the living condition of the poor working masses and for infrastructural development. Thus, there is mass poverty in the midst of abundance. The corruption is rife mainly because there are huge but loose resources that are just there for looting.

Nigeria, the world sixth exporter of crude oil and which has recently become the third largest supplier to the biggest crude oil market, the United States, does not have functional refineries and thus relies largely on importation for its domestic oil consumption. The deregulation of the down stream sector of the economy has meant Nigerians pay dearly for products extracted cheaply under their soil. Obasanjo met the price of petrol at N20 and left it at N75. Obasanjo government issued licence to 18 operators for building of refineries. For more than 6 years, only 2 of the refineries owned by some state governments had their foundation laid. This has further lent credence to the fact that it is the only government that could genuinely invest in development projects. For the private investors, it makes a better economic sense to import fuel and make cool profit. Nigerians will pay more for fuel, may be not before the expiration of one-year agreement the government reached with the labour. This is the only possible relief.

Yar’Adua talked of confronting energy crisis while campaigning, but it is clear he does not have any blueprint to work with while assuming office. He has only threatened to declare state of emergency on the power sector. To poor working masses, artisans and manufacturers who rely on self help to generate their own electricity on almost daily basis, Yar’Adua is deliberately lagging behind the obvious reality. The power sector is already in abyss of mess which is worse than state of emergency. But can he do anything in the face of capitalist neo-liberal economic reforms and the entrenched corruption at high places?

Liyel Imoke, Obasanjo’s minister of power and now governor of Cross Rivers State had told us not to expect stable electricity earlier than the year 2056. Talking about stable power generation and supply, Imoke said in March 2006, “The current growth of the Nigerian economy stands at seven per cent. If the power sector grows at a rate of seven per cent per annum from now on, we will take another 50 years to catch up on where we should be and that is the real challenge” (This Day, March 14, 2006). Nigerians should prepare for the worse. Imoke based his calculation of 50 years on the hypocritical growth of seven percent. In reality, the power sector has not witnessed any growth. Obasanjo met the power generation at 3,000MW but left it around 2,000MW. Yet, about N521 billion is claimed to have been spent on power generation from 1999 to date. (The Nation July 11, 2007). Also, the Nation newspaper’s cartoon of March 8, 2007 quoted the PHCN management saying, “World Bank grants to Nigeria energy sector hit N36.4b”.

The combined factor of electricity problem and expensive petroleum products has led many factories to close shop or lay off workers. Just on Monday July 9, the National Deputy Secretary of Nigeria Union of Textile workers, disclosed that about 20,000 textile employees in Kano state alone might lose their jobs due to the hike in the cost of black oil, a petroleum product.

To expect a better economic turn, the huge resources of the country must be committed to provision of basic necessities like electricity, water, housing, road, education, decent jobs, health care, etc for workers and poor masses as well as infrastructural development that aid industrial growth. Achieving this would mean abandoning the neo-liberal economic reforms and putting under public ownership the commanding heights of economy including oil industry, banking, etc and the resources of nature with the democratic management and control by the working people themselves. It has further meant that we need a mass working masses party that will wrest power from the thieving ruling elite and usher in a peasant and workers government run on socialist programme.