LESSONS FROM THE OBASANJO ECONOMIC REVOLUTION

 It is possible for the country to achieve an economic turnaround in the midst of great challenges, argues Paul Nwabuikwu

After years of failed agreements and gridlock, there was finally some positive news from the World Trade Organization (WTO) two weeks ago.

Following what Bloomberg described as “a grueling all-night negotiating session at the WTO’s headquarters on the shores of Lake Geneva”, 164 members of the global trade body which is more famous for high profile disagreements finally reached historic agreement on some issues which are critical to the health of humans and the planet. Two led the headlines.

The first was a reduction of fisheries subsidies, an issue that the WTO had failed to unite around for almost three decades. The second was the loosening of limits to expand vaccine production for Covid-19 and future pandemics that experts say are certain to come.

In all, WTO members agreed on curbing an estimated US $22 billion in subsidies that contribute to the depletion of marine resources and illegal unregulated fishing which have led to serious depletion of overfished stocks.

Even hours before the approvals were announced, things had looked bleak. The fault lines – superpower, regional, economic, global north vs global south, etc., – seemed set to triumph. But, somehow, despite the Russia-Ukraine conflict which has further divided a polarized world, brilliant last-minute strategizing, relentless diplomacy and good sense prevailed and the deed was done.

The heroine of this tale, although she prefers to highlight the hard work and dedication of her team and the cooperation of the WTO member countries, is, of course, Ngozi Okonjo-Iweala, the WTO director-general and Nigeria’s former two-time minister of finance.

Under her leadership, the historic agreements which few believed would happen were reached just a year after she assumed office. The recent triumph at the WTO has breathed new life into multilateralism and the search for a more equitable world order. The world is indeed fortunate to have Okonjo-Iweala at the helm of this important global institution that underperformed for so long.

The outcome of the WTO negotiations reminded me of another historic battle in which Okonjo-Iweala played a key role almost two decades ago: Obasanjo’s second term economic reforms. It is sad that that significant event is fast becoming a fading footnote in the national memory. But it is also understandable. We are not a very reflective society. In addition, the current state of the economy is not amenable to positive contemplation. Thus the success of the reforms whose robust positive impact lasted to large degree till 2015 has become a retreating mirage in the national rear view mirror, overtaken by harsh new realities.

But the fact which cannot be denied is that the Obasanjo reforms in which Okonjo-Iweala headed a highly effective Economic Team transformed the economy, infused it with muscle and vigor and precipitated a historic economic renaissance that made a vibrant difference in businesses, on family tables and in individual lives across the land after a bleak period of stagnation and regression that began in the early 80s and worsened over the next two decades. The impact of the reforms was felt not just in the executive suites but also in the pockets of Nigerians.

Anchored on the National Economic Empowerment and Development Strategy (NEEDS), the reform programme focused on four main areas: improving the macroeconomic environment, pursuing structural reforms, strengthening public expenditure management, and implementing institutional and governance reforms. For me, the ending and reversal of the brain drain which began in the 1980s was particularly heartwarming because I belong to the generation that graduated into the bleak economic landscape of the Buhari-Babangida years. Post 2003, the exodus of Nigerians out of the country was replaced by the rush of young Nigerians abroad back into the country to take advantage of exciting new opportunities made possible by the reforms. The gloom of the previous two decades was replaced by a vibrant sense of hope and possibility.

In fact, the impacts of the Obasanjo second term reforms were so great that many Nigerians have forgotten that there was actually a first term during which Adamu Ciroma served as finance minister and Obasanjo was serially criticized for endless unproductive trips to reach investors who mostly refused to be wooed. Remarkably, the former president resumed his second term with a sense of urgency and a clear focus on the economy. He prioritized clearly defined economic goals, benchmarked against global standards and perhaps, best of all, appointed the right people into key positions. This included constituting an economic team of highly capable and hardworking persons.

Obasanjo’s vision delivered handsome dividends for the country. The failure of the current administration to continue with many of the key reforms is the major reason the economy is in such awful shape today. But as bleak as the situation is, things would have been much worse if the 2003 reforms did not happen.

As the nation gets set for what has been described as a make-or-break election, the success of the 2003 reforms provide some important lessons and perhaps a roadmap out of the economic woods. First, the progress of those years demonstrate that it is possible for the country to achieve an economic turnaround in the midst of great challenges. Nigeria does not have to be a slave to its history or its mistakes. The accomplishment of the Obasanjo administration after an unimpressive first term is a possible source of inspiration for the new administration that will hopefully be inaugurated in May next year.

But while progress is possible, it is far from inevitable. The economic blight of the two decades which preceded the reforms also contain a cautionary lesson: the country pays high for the wrong policies. The current state of the economy provides extra support for this perspective. Poorly thought out policies, inconsistent implementation, indecisiveness on key imperatives like removal of oil subsidy and reverting to knee jerk statist, “socialist” economic thinking have contributed to reversal of the economic gains of the reforms.

Perhaps, the most important lesson of the Obasanjo reforms is that we don’t have to wait for a perfect constitution, the adoption of true federalism or the resolution of the many structural political challenges confronting the nation to start making economic progress and start reducing the terrible burden on our people. In fact, achieving a significant measure of economic improvement will help create the environment for us to come together to tackle these challenges. Discussing on an empty belly will not encourage solutions. The question is: will the winner of next polls be equal to the historic responsibility of putting grit and muscle back into the economy?

Nwabuikwu is a member of THISDAY Editorial Board

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