PRESS RELEASE
Afenifere is deeply concerned by President Bola Tinubu's response to the visit from the Patriots group, where he indicated a preference to focus on his economic reforms and the resulting economic hardships before addressing Restructuring.
This approach, which prioritizes fiscal and monetary policies that lack coherence and synergy, neglects the fact that Restructuring is the very foundation needed for economic growth, recovery, and the resolution of other multifaceted challenges in our polity. We urge the President to reconsider his strategy. What is required is a holistic approach that addresses these issues at their roots, simultaneously. This means implementing not just economic and political reforms and palliatives but complete economic and political restructuring for the following reasons:
1. Interconnectedness of Politics and Economics:
Politics determines how we organize to achieve our objectives, while economics provides the means to do so. These are inseparable at the root of societal functions. Nigeria’s current economic problems stem from political foundations that were designed not for economic prosperity but for political control and economic dependency centered on an exploitative system. A constitution represents a social contract between the government and the governed. With the Nigerian government overly centralized, unjustly skewed towards a particular region, and abdicating its social responsibilities to free market forces, both the government and the governed are under-optimized. Restructuring is essential to re-establish a new social contract with balanced political and economic responsibilities.
2. Historical Precedent and Current Economic Collapse:
The 1929 Great Depression, which led to US President Roosevelt's New Deal and British Keynesianism, was not as severe or prolonged as Nigeria's ten-year economic collapse. The Naira has lost 80 percent of its value, real wages have more than halved, unemployment and inflation have skyrocketed, and Gross Domestic Product has halved since 2014. A responsible Nigerian leadership must respond with far-reaching, fundamental economic and political restructuring rather than superficial reforms that merely address economic indicators.
3. Necessity of Devolution of Power:
Restructuring and devolution of power to federating units, even at a minimum level as recommended in the President’s own party’s El-Rufai Committee report, are necessary for peace, harmony, and the country’s continued corporate existence. Without these, there can be no economic prosperity. Devolution of power is crucial to enable polycentric political authorities and responsibilities, which are necessary for a polycentric, bottom-up economy. For instance, agriculture, Nigeria’s largest contributor to GDP, is threatened by the over-centralization of the police, which hampers effective local policing. Additionally, states are constitutionally dependent on federal allocations from crude oil proceeds, while vast resources go untapped due to constitutional restrictions preventing states from exploiting their own resources.
4. Comprehensive Infrastructure Development:
Like Roosevelt's New Deal, which included massive public works programmes to provide employment and essential infrastructure, Tinubu must institute an emergency, comprehensive infrastructural development programme. This should involve building at least 5,000 kilometers of railway (e.g., Lagos-Calabar, Ilorin-Yola, and Sokoto-Maiduguri), massive low-cost housing, and solar energy panels within three years. Simultaneously, constitutional amendments should be pursued to devolve power and empower federating units, and private production concerns, with a social contract that optimizes and sustains the new economic infrastructure.
5. Rethinking Economic Prioritization:
The belief that economic problems must be resolved first, guided by neo-liberal economic perspectives, is flawed. This approach focuses on balancing budgets and then providing palliatives to future restructured federating units without a social contract, leaving them to the whims of the free market. This is a wrong approach. Instead, the government should identify and address necessary infrastructural and constitutional gaps to resolve current issues and ensure long-term sustainability.
6. Ideological Shift from Neo-Liberal Policies: Tinubu must move away from the 45-year-old neo-liberal economic policies that advocate subsidy removals and devaluation in pursuit of balanced budgets. These policies have abdicated the government’s social contract to improve citizens' lives, instead driving them into poverty, unemployment, and de-industrialization. Contrary to advice from foreign free-market advisors, Nigeria must engage in deficit budgeting and other means to tackle the massive tasks ahead. It was the deficit budgeting through military Keynesianism during World War II that finally ended the Great Depression. If necessary, Nigeria should negotiate debt rescheduling, debt-equity swaps, or enforce a debt moratorium to ensure our continued corporate existence.
7. Restructuring the Police for Local Security and Economic Growth:
Restructuring the police to address local security concerns would free up the army, which, through its Engineering Corps and the Defence Industries Corporation, could employ millions of unemployed Nigerians to build infrastructure at a lower cost. This partnership between the federal government and the army would yield significant returns on investment, potentially over $50 billion annually. The government could then sell shares to private enterprises to repay debts. This would also create a structurally and emotionally attached army protective of the country’s growing economic complex, thereby reducing the risk of coups.
8. Empowering Federating Units Through Economic Development:
Restructured federating units would gain new sources of income by building state-owned railways connected to the federal grid. This would develop the iron/steel, chemical, and electrical subsectors, significantly increasing their collective GDP contributions, currently at just about 1.5%. Devolution of power and economic control would incentivize federating units to develop a new railway complex and real estate, with significant income and employment multiplier effects in agriculture, agro-allied industries, and mining for industrial use locally and in other markets. With real estate being a major source of wealth, the cost savings from the massive low-cost housing program would be passed on to the masses, spurring the growth of various consumer markets.
Ultimately, for a fair, productive, and prosperous corporate existence as a nation, political and economic solutions must be designed and implemented simultaneously. Our political structures should be based on a new social contract dictated by economic and sociopolitical demands.
Signed:
Ayo Adebanjo, Leader, Afenifere
Justice Faloye, Afenifere National Publicity Secretary
