CAPITALIST BAILOUTS: Can They Reboot Nigeria’s Ailing Economy?

By Kola Ibrahim

For a country where virtually all facets of the economy are comatose, the idea of bailing out some sectors may sound innocuous on the surface but beneath this is a grand design by the capitalist politicians and their big business partners who severally and unapologetically debased the economy to the rotten state it has found itself in the first place to find another ‘vista’ for haemorrhaging the already pale economy. The bailout being advocated and implemented by the capitalist politicians are not meant to actually reboot the fundamental aspects of the economy and public infrastructures, but are aimed at generating huge profits for big business people and looting politicians in power, under the guise of reviving the economy. While they resolve their profit interest through sham bailouts, the poor and working people will be made to go through excruciating austerity – a case of more meat for the big fat few, and dried bone for hungry majority. In the final analysis, the capitalist bailouts will not resolve any of the fundamental problems confronting the society; neither will it provide jobs for the teeming population of unemployed and underemployed poor Nigerians. In reality, it will leave the economy worse.

According to a report in the Punch newspaper of January 13, 2013, over N1.732 trillion has been expended on bailouts and interventions in various sectors of the economy since President Jonathan was installed in 2010, with little or no effect on the economy. In fact, according to the President of Nigerian Association of Chambers of Commerce, Mine and Agriculture (NACCIMA) one of the bosses’ associations, Dr. Ademola Ajayi, less than six percent of industrialists have had access to the hundreds of billions naira -worth of intervention in the industrial sectors. Also, hundreds of billions supposedly allocated for intervention in the agricultural sector has only translated to importation of staple foodstuffs worth billions of dollar; most of which can easily be produced in the country. The so-called N100 billion-textile industry bailout has not translated to any improvement in the sub-sector, as billion-dollar worth of clothing materials are imported into the country yearly, while according to Dr. Ajayi, less than 25 percent of the handful of textile manufacturers are operating above 50 percent capacity utilization. According to the report, “while some of the funds are being diverted to other uses, part of the fund can no longer be accounted for”. In fact, according to the referenced Punch newspaper report, the Nigerian Senate’s Public Account Committee has already identified N44 billion as missing from the intervention funds. All of these facts have shown the bankrupt character of Nigeria’s capitalist political class.

It will indeed be like miracle to expect the political class that actually destroyed these sectors of the economy, through their looting spree to revamp any of them. In fact, the Nigerian political class, just like maggots, actually grows and fattens on the rotten economy. It is through this rot that they allocate billions of dollars for various interventions, and short-term measures, which they can easily loot while they hypnotize Nigerians with their bogus figures. This explains why the refineries are deliberately run down so that Shylock importers, most of whom are political actors, fronts for or connected to politicians in power, are allocated trillions of naira for fuel importation. It is no secret that most of the allocations have been exposed to be sheer fraud. We are witnesses to over N600 billion purportedly used to bail out banks, which has only translated to tens of thousands of job losses in the banking industry. Subsequently, another N2.5 trillion of public funds was used to bail out big businesses, who ran down these banks with their unsustainable but odious debts, ostensibly with direct criminal connivance of bank executives. The real parasitic nature of capitalist politicians was reflected in the quick manner these trillions of naira of public funds were donated to bank fraudsters, while the same government was very reluctant in bailing out the vital textile industry where hundreds of thousands of jobs have been lost due to collapse of public infrastructures and services like electricity. Interestingly, when the bailout for the textile industry was announced, it was already in private pockets before it is released, as reported above.

Even if the bailout funds are spent on intended purposes, this cannot resolve fundamentally any of the problems facing Nigeria’s ailing economy. For instance, the social and public infrastructures needed to provide supports for the economy are clearly in coma while funds meant for their resuscitation are continually looted. Roads, electricity, public education etc., are in their deplorable conditions, therefore, the real bailout needed to restart the economy is the rebuilding of these public infrastructures, and not spending public resources to bail out handful of capitalist big business, who will turn around to exploit the working and poor people. For instance, what form of bailout can be given to the textile industry, when the power supply is epileptic while cost of fuel is killing? Even if such industry is given bailout, while some handful jobs may be created, it cannot solve the problem facing the industry in a long run. For instance, the average living standard for majority of Nigerians is very low, while the cost of production because of non-existent or dilapidated infrastructures and depreciated currency is high such that imported textiles will be more favourably patronized.

The fundamental basis of Nigeria’s underdeveloped economy is rooted in the neo-colonial, neo-liberal capitalism being practised by the bankrupt, weak and highly corrupt capitalist class. Nigeria, as a latecomer to the scene of global capitalism is in the periphery of global capitalist relation, serving as supplier of raw materials and consumer of finished goods. The various sections and generations of capitalist class are fundamentally weak and too shortsighted to undertake any capitalist reforms to develop the economy. Therefore, they accommodate themselves within the available position in the global capitalist economic relation. It is easier and safer for Nigeria’s capitalist class to be errand boy of imperialism than developing the local economy, through which massive investment in social and public infrastructures can be carried out, which aside employing millions of Nigerians in decent jobs, will also create opportunity for private business to grow. But the capitalists in Nigeria are not interested in such plan, but only on immediate profit from the available source of wealth crude oil. This explains why most economic activities in Nigeria, revolve around the crude oil, with over 90 percent of government revenue coming from royalty from oil alone, with a few also profiting from cheaply produced everyday products like foodstuffs and cement.

All of this shows that no amount of capitalist bailout can solve the economic straitjacket Nigeria has found itself, and this has been clearly underlined by the manner in which N2 trillion-worth of bailout has been mismanaged and looted in just two years. Indeed, the problem of Nigeria’s economy requires socialist alternative through public ownership and democratic planning. By putting public resources under public control and ownership, huge resources can be liberated to provide basic needs of the people and expand public and social infrastructures. By democratic planning from the local level to the national levels, resources can be reasonably allocated to needful areas that will ensure long term and sustainable development, in the interests of the people. This is the only way to reboot Nigeria’s economy.