The Testament of A Reformer

16 Jan 2013

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The Horizon By Kayode Komolafe, Email:

The internal politics of the Peoples Democratic Party is dominating the headlines.  This is to be expected because of the central position of the party in the polity, you may contend. We are talking of the party of the President and 23 governors and a party of the majority of members of the National Assembly. All that we hear about the PDP civil war is who becomes Board of Trustees' Chairman or the National Secretary in the preliminary games towards 2015.

The politicians carry on as if these are the issues confronting the people in their daily lives. It seems that the purpose of politics is just "winning" elections; they spend the four years before elections planning how to "win" the contests.  Hence they devote so much time to electoral strategy and little or no time to strategy of development.  There are political battles being fought right, left and centre, but there is no structured debate on the economy. Has any one told the nation of the policy disagreements within the PDP?  Are the leaders on a warpath because of the differences on the direction that the nation should be facing in social and economic spheres?  When will there be  policy debates within PDP and other parties?

In a more serious clime, the dispute would be about strategic and policy differences; it would be about how to run the country based on the current mandate of the President, governors and the legislators. The dispute would be between PDP gladiators who are in favour of the policy thrusts in the economic management and those who think things could be done differently. The issue would be what do with the burgeoning poverty in the land. The opposition parties would come up with clearly articulated alternative strategies. Mergers would be real mergers of policies and not mere electoral arrangements among political aspirants.

If politics here were to be about issues and not just the ambitions of politicians, a book that was presented to the public by the Finance Minister Ngozi Okonjo-Iweala late last year would generate greater attention and wider discussions than it has so far done. A number of issues that are eminently suitable for debate on the current direction of the political economy are thrown up in the   198-page book entitled "Reforming the Unreformable: Lessons From Nigeria". The story told by Dr. Okonjo-Iweala bears so much resonance to the present situation that it should compel attention. It is a story of socio-economic reforms embarked upon during Okonjo-Iweala's first coming as finance minister in the administration of former President Olusegun Obasanjo. 

The story could be encapsulated thus: everybody said the Nigerian economy was unreformable, Okonjo-Iweala, at the head of a technical team accepted the challenge to reform it. She draws extensive lessons from this daring experiment.  According to the author, the book is '"a story of development economic in action"; but it is also advisable that the general reader should go beyond the expert review and read the book as a story of a work in progress that is the Nigerian economy. And now as the coordinating minister for the economy, Okonjo-Iweala would readily admit that reforming the economy is indeed a work in progress. 

In the book, Okonjo-Iweala honestly admits the extant challenges of transformation and emphasis on the real sector for job creation and human development just as she sees a lot of work to be done in the agricultural sector. Her intellectual candour in this respect is noteworthy.  Okonjo-Iweala has done well by summoning the intellectual courage and discipline to document her reflections even while she is still saddled with the responsibility of economic management. Any other person within or outside government may tell his or her own version of the story; the fact is that this is Okonjo-Iweala's authoritative version.  If you like, it could be taken as her own testament as a convinced reformer.

For instance, she explains how and why she had to be paid "dollar salary" in a way that would probably convince not a few of the critics.  Similarly, she gives an insight into her first attempt to quit the Obasanjo cabinet barely a fortnight of inauguration based on professional principle. She could not accept to be finance minister while the budget office would be outside her purview.  It is also intriguing as she reveals in the book that there were indeed fierce battles within the admiration over what should be trade-offs such as when more resources were budgeted for education and the defence sector and the minister of women affairs kicked. 

It is salutary that Okonjo-Iweala has written in an analytical style that makes the book accessible to non-experts; you don't have to be a MIT-trained economist like the author to comprehend the story line.  As it would be expected of the work of an   economic manager the book is also a mine of information with the anecdotes, appendix, figures, tables and charts.  As an aside and strictly on a lighter note, however, it is astonishingly contradictory that the reformer- author had to write in long hand and so depended on others to put it in digital text.

Although Okonjo-Iweala began to advise Obasanjo in the first term on debt management, it was not until the second term that she emerged as at the head of the Obasanjo's economic team, which at a point appeared to take its job with a missionary zeal.  Composing the team and infusing it with a synergy of purpose was one of the initial steps Okonjo-Iweala took in what she describes as '"setting the stage for reform". The team was driven by their supreme convictions about their neo-liberal package endorsed by the World Bank and the International Monetary Fund (IMF).  It was then that the team packaged for the Obasanjo administration the National Economic Empowerment Development Strategy (NEEDS), which focused on "wealth creation, employment generation, and poverty reduction and value orientation". Okonjo-Iweala celebrates the fact that that the World Bank and IMF accepted the document as a "Poverty Reduction Strategy Programme (PRSP) as  "an unprecedented act". 

Now the gamut of the reforms is so remarkable that if the contemporaries do not do justice to them by discussing the reform, it would certainly engage the attention of future economic historians.  The team devoted their energy and time to macro-economic stability, cleaning up the budget process, privatization, deregulation, liberalisation, debt relief, fighting corruption, due process mechanism, civil service, customs, consolidation of banks, tariffs etc.  The Fiscal Responsibility Act, a product of the era, is such a great document that if faithfully applied to governance, a lot of progress would be made at all tiers of government.

  However, the latitude of the economic team was politically constrained.  As a matter of fact, there was a good dose of political naivety on the part of economic team in their false dichotomy between "technocrats” and "politicians". No good student of political economy would make such abstract distinctions in the governance process. The triumph of politics had set in by the time Okonjo-Iweala was inexplicably deployed by the political boss, Obasanjo, in 2006 to the ministry of foreign affairs.  By then some members of the team were already talking of a "paradigm shift" as they looked into the political future. The fact that a good number of the Obasanjo's economic team members   are today active politicians is a proof of the false dichotomy that was drawn at the incipient state of their reforms.

That is why the penetrating lessons and sharp conclusions   Okonjo-Iweala has drawn from the experiment should prove useful in the current economic management.   For instance, Okonjo-Iweala posits: " In reform, economic is politics, and the idea that the two can be kept separate is untenable.  Thus, it is important that reformers have a    a plan or a strategy for engaging politicians and lawmakers in the rationale for reforms and getting them to buy in early...  Regarding the political economy of reforms, it is crucial to analyse and understand winners and losers so that one can either engage with or protect against them. Winners, if appropriately mobilised, can be powerful allies in preventing losers from undermining the reforms".  What Okonjo-Iweala has not said (and which she is hardly expected to say because of her right wing ideological position) is that trade-offs are fundamentally determined by class positions.

It is the poor in the lower classes who are mostly bearing the brunt of reforms because the reforms are structurally skewed against them. And bourgeois reforms by their nature often conceal this fundamental fact. As leftist scholars would tell you the job at hand here is not merely a technical economic exercise but a   process of political economy.  Okonjo-Iweala is right to acknowledge the relevance   of the political economy approach.

The lessons of that period should sink if the current economic management is to make a success of substantial poverty reduction.
By way of conclusion, despite the criticisms from some quarters, debt relief was a signature step in the reform process and Okonjo-Iweala says it "was central to the reform effort". Is it not, therefore, an irony that in the second coming of Okonjo-Iweala the debts are piling up again in a way that suggests that another edition of the book may have to explain the economic wisdom of this trend?

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