One day, hopefully not too far from now, Nigeria will get lucky with the kind of leadership that unlocks economic growth and pulls millions out of poverty (it’s not going to happen under APC so we have to wait for Buhari and his party to carry their wahala and go).

But, as with so many other things in life, when you finish one thing and do it well, your reward is simply another hard thing to do. So when you imagine a future where economic growth has taken off in Nigeria — say 10% GDP for 10 years straight (don’t let the current small minded government tell you this is impossible — in a country of almost 200 million people with a lot of poverty, it is very very possible), I often find myself wondering what Nigerians will do with the extra income.

Consider the 3 charts below from a recent Credit Suisse report titled The Market Impact of Emerging Savers.

The chart shows how Chinese people spend their income on a monthly basis. Look at the green part in the middle — savings. There has to be something more to this, something cultural, given how it is consistent across age groups. 30% of income gets squirrelled away. I’m pretty sure that 30% was close to 50% a few years ago even.

Now this chart compares where the Chinese, Indians and South Africans put away their savings. You can see that the famed Indian love for gold is not a myth. It looks like the Chinese and Indians tend to put most of their savings in bank accounts but this is somewhat misleading.

This is where the difference becomes really stark. When you think about the effect of over 1 billion people saving 30% of their income, you can begin to imagine the firehose of capital that this generates. This is also further evidence that there is a cultural phenomenon at work — the Chinese are saving more than countries who are not as rich as they are.

Nothing illustrates this better than the incredible story of Yu’e Bao — Alibaba’s wealth management product. In early 2013, this product had $1.9bn in it. Today it is the world’s biggest money market fund with $210bn of assets.

The flag-bearer was Yu’e Bao, which translates as leftover treasure. Launched by Tianhong Asset Management, a small fund house that had $1.9bn in assets in March 2013, and Alibaba, the ecommerce giant that is China’s equivalent of Amazon, the money market fund drew in more than Rmb500bn in nine months, making it the fastest-growing fund of all time.

Other asset managers, banks and platforms quickly jumped on the bandwagon, offering their own online money market funds. Since the second quarter of 2013, the assets under management in China’s money funds jumped from Rmb300bn to Rmb4.4tn today, according to Mr Powers.

The Germans are the Chinese of the Western world as a recent FT report pointed — their savings rate of 10% of disposable income is double that of the European or American average. And for the German cultural angle:

The world’s first savings bank was founded in Hamburg in 1778. Inspired by Enlightenment ideas of social progress, the institution was seen initially as a tool to help the plight of the urban poor. By saving small bits of their pitiful earnings, they might one day be in a position to pay for the education of their children, and to soften the financial blow of old age and illness. That motivation, however, would soon be replaced by something altogether different.

When you have a high internal savings rate, you’re less reliant on the vicissitudes of foreign investment. As you may have noticed, now that the Chinese have deployed these savings as investments locally (and even over-invested in a lot of cases), they now have to export all that savings-as-capital to countries like Nigeria. The British used to be high savers but not anymore. So if you don’t save what do you do? You will be heavily reliant on foreign investment for economic development and growth which means you have to be a place that is very friendly to business such that you regularly attract that foreign capital. The worst thing you can be is a country with low savings rate and poor business climate — you will take 50 years to get the kind of growth you can get in 5 or 10 years. The thing go slooooooooow die.

Money in the music

All of that brings us nicely to Adekunle Gold and his new album About 30.

I am really emotional right now.
I could cry happy tears.
This album, #About30, is a reflection of my heart, my fears, my pleasures, my pain, my losses and my faith. .
With the love you give me? I would do it again and again and again and one more time. pic.twitter.com/qIM8uF0Awx

— KING AG #ABOUT30 (@adekunleGOLD) May 25, 2018

 

I’m on my 3rd listen or so and the album is very sweet. I like it. He’s one of those Nigerian musicians who seems to always deliver (and in live performances too). At the moment my favourite song on the album is Money — track 7 on the album.

Haters gon’ hate

A year ago, I wrote a piece on how Nigerian music isn’t doing enough to document history as it happens. But in reality something is being documented. As a way of being somewhat self critical, I’ve been paying more attention to what Nigerian musicians are saying in their songs. It is useful in answering the question that opened this piece — when the day of economic growth and higher income comes, what are Nigerians going to do with the extra money? If they save more of it, then it means the country might enter a virtuous cycle of high economic investment which leads to more roads and bridges and power plants. If they turn it all the waaaaay up, then the country will have to rely on foreign investment to keep the economic show on the road. This is of course harder — if you misbehave like Nigeria did in 2015 and 2016 and start fooling around with exchange rates, the foreign investment will dry up and you get a recession that sets you back many years. When I listen to Nigerian music — and if Nigerian music is telling us something about present day Nigeria — the only conclusion is that the latter option is what Nigeria is going to take.

Some weeks ago, I listened to a song called Bye Bye Poverty by some chap named CDQ. The title of the song caught my attention so I listened closely.

Came up on my Spotify – olowo l’on s’aye/oshi o da/bye bye poverty A tune https://t.co/SnGiaClyqg

— tyro (@DoubleEph) May 11, 2018

Desiring to banish poverty is a good and fine thing. But then what does Mr CDQ want to do with the money?

Oshi oda bye bye poverty (wobi)
Olowo lon shaiye
Oshi oda bye bye poverty (woss)
Plenty money follow me
Plenty baby follow me (yeah yeah)
Educational follow me
Ómó to Chache owun lon gbawo
Plenty money follow me (owo)
Plenty baby follow me (owo)
Education follow me (owo)
Ómó to Chache owun lon gbawo
Wón le le le wón le ba
Baba loke ginger mi
Enemies wón para
Dem no fit hinder me

In fairness he seems to want to spend some of the money on education (although when you listen it sounds more like ‘elevation’ and not education). But the trouble is that he wants plenty babes to follow him and more troublingly, he wants to do hobi to his enemies. When spending is motivated by the desire to pepper dem then it is safe to say that a lot of capital is going to be misallocated. More importantly, that money is not going to be saved which can convert it into capital that builds all those nice things Nigeria desperately needs. This is a shame because Mr CDQ wants to be as rich as Dangote, Mike Adenuga and Otunba Akin Alabi.

 

Hobi

Back to Mr Gold’s Money. After pleading with the One who created the heavens and the earth to bless him with money, he reveals what he wants to do with all that extra cash:

Money money, ego apekanuko owo owo
Money money, ego ego ego ego, jowo yale mi, dakun mo be o
Bless me, bless me papa, give me good life father
Ki’n ma yan fanda loju elegan mi o
Money money ego ko ma bo o

Ah, there it is — he too wants to pepper dem. He wants his haters to see him flourishing and be consumed by bitterness. You might say this is a universal human condition not unique to Nigerians and you will have a strong point. But it is Nigeria we are talking about. The trouble with a pepper dem philosophy is that you cannot pepper the haters by having say N100m and buying a cheap second hand car and saving/investing N99m — how are the haters going to see it? You have to buy a big and intimidating car so when they see you drive past at 10mph, the bitterness can be amplified in their sad hearts and they will know that your Gawd is good all the damn time.

He goes on to say

I dey do my best everyday, I pray make e add up baba
I don’t want to still o, jhor mo bebe
Kowepe, kowopo, ani mo bebe
Tori debit mi po, o po o, family mi po, o po
Have mercy on me and give me good life with a lasting peace of mind
Everyday as I dey grind, make your favour follow me baba

This is another troubling part of Nigeria’s economic story. How much do you need to take care of your (extended) family? It is hard and money is hardly ever enough. It is also a big driver of corruption in ways that we often don’t acknowledge which has been with Nigeria for a very long time

Maybe it’s deliberate, maybe it’s a honest mistake but I’m seeing a lot of arguments being made against the CFTA using arguments against free trade agreements. Don’t worry, I am not trying to confuse you either.

There is a significant difference between a Free Trade Area and a Free Trade Agreement. The meaning of CFTA is Continental Free Trade Area. Let’s use a real life example to draw a distinction as follows:

With Brexit, Britain is leaving a Free Trade Area and is now trying to sign a Free Trade Agreement.

One particular article from Le Monde that argues against the CFTA as if it is an FTA is being shared widely. The article was recently published in The Guardian. Here’s the opening:

Pressure for free trade is growing in Africa. The European Union (EU) is urging African governments to sign economic partnership agreements (EPAs) and end non-reciprocal trade preferences: to keep their exports to the EU exempt from customs duties, African countries will have to remove 80% of those they apply to imports from the EU.

The African Union (AU) has started negotiations to establish a huge continental free trade area (CFTA), and a meeting of trade ministers in Niger on 16 June decided to work towards the removal of 90% of duties between African countries.

This rush towards free trade is questionable, especially for the agricultural sector. West Africa faces a triple challenge: a growing food deficit, a population explosion (1) and climate change.

It’s a very clever tactic but it relies on the ignorance of the reader by eliding the distinction between the two. As you can see, the author opens with the EU’s EPA and then jumps to the CFTA making the reader think both are the same thing.

When you check comments by the NLC and MAN you see this same argument being used — free trade will turn Nigeria into a dumping ground for foreign goods and kill the local manufacturing industry. President Buhari, who has presided over the biggest destruction of manufacturing in Nigeria in 25 years, is also promising to protect the local manufacturing industry from foreign invasion. The irony is very rich but maybe he wants a monopoly of destruction.

Free Trade Area

Whatever the faults of the European Union, one of its biggest achievements has been the creation of the single market. The single market is perhaps one of the best examples (if not the best) example of a free trade area in the world. By being in the EU, Britain and France are in a free trade area (the single market) but it does not mean that Britain and France have signed a free trade agreement.

Here’s a nice graphic example of the single market in action from the FT:

 

Back, back, forth and forth

The single market turns many countries into one market as if they are all one country. As a result, you can do stuff like the above. Since infrastructure is decent, you don’t have to produce everything in one place.

Free Trade Agreement

Free Trade Agreements (FTAs) are for people outside the single market who want to access it. If you’ve been paying attention to the Brexit negotiations, you would have heard the EU side repeating it over and over that a free trade agreement cannot have the same benefits as being a member of the single market. You can find a list of the EU’s FTAs on this page. Each one is different from the other and covers many different things. Picking Chile as a random example, here is what the EU’s FTA with them does in summary:

The current EU-Chile FTA:

removes tariffs

removes trade barriers

guarantees protection for European intellectual property in Chile

In other words, a Chilean wine maker can export her wine to the EU without paying tariffs and a French wine maker can export his wine to Chile as well. But if I get a job in France today, I will simply move to the France and start the job or even commute from Britain without anyone stopping me — the same way a Nigerian can leave Lagos to take a job in Abuja without anyone asking them for a work permit. A Chilean cannot apply for a job in France and then just carry his bags and head there. While the goal of a single market is to create one market with no restrictions, a free trade agreement simply tries to make trade between countries easier.

For anyone doing business inside Nigeria, Nigeria is a free trade area (subject to police checkpoints and bribes for crossing from one state to another).

So What Is CFTA?

So what is the point of the CFTA and what is it trying to achieve? Again, here’s a good example from The Economist:

Take the example of a large South African retailer with stores elsewhere on the continent. It has a big warehouse where employees take products such as tubes of toothpaste out of the cartons that are used in South Africa and repack them into ones that comply with labelling rules in other countries

One of the most important things in a single market is having common rules and standards and for all products. In the example of the cars above, there is a single standard for all components across the EU such that some guy in Germany doesn’t just make bolts in a size he likes. Everyone produces things to a standard under agreed and harmonised rules.

Thus, once the CFTA is fully in place, there will be one standard for toothpaste contents and packaging across all the countries in the CFTA. A Nigerian toothpaste manufacturer will simply download the rules and produce his toothpaste according to those rules and sell them in Congo, Rwanda and Ghana — as long as he can get them at a decent cost of transport.

The problem that the CFTA tries to solve is the terrible state of trade within Africa. While trade within Europe makes up 67% of trade, in Africa it is just around 12%. That is, every African country trades more with another continent than with their neighbour. The EU or America will not be able to negotiate with a small country and then bring in its goods into the CFTA through that. Anyone who wants access to the CFTA will have to negotiate a FTA. And of course, signing a FTA with the CFTA cannot be the same as being a member of the CFTA, just like with the EU’s single market.

This is all in theory but that is what the CFTA is working towards. There are big advantages. The single market makes the EU a very attractive market which means there is a queue of countries lining up to sign FTAs that allows them access to the single market. Canada just signed one called CETA and it took 8 years. The Americans have been trying to sign another one called TTIP since the 90s but so far it has not been completed. There are small countries in the EU but America cannot bully them individually to sign the deal because it is negotiating with the EU as a whole and all members must agree before a FTA is signed with any external country. In 2016, everyone had agreed to the CETA deal with Canada except the Belgians so it was blocked until the Belgians were placated.

No Magic

There’s no magic here. Implementing a free trade area takes an incredible amount of work. The signing of the agreement in Kigali last week is just the first step. Even after a couple of decades, the EU’s single market continues to be a work in progress that is constantly fine tuned. But it holds very exciting benefits and possibilities. Why will Nigeria not be on board for something like that? Nigeria will be one of the biggest immediate beneficiaries because outside of Nigeria, Kenya and South Africa, there is not much manufacturing going on in Africa. Any manufacturer or company in Nigeria will automatically have a bigger market in which to sell their goods.

Of course there will be competition but no country will have any power over Nigeria that Nigeria also does not have over them. It is not just about competition, it is about cooperation as one of my favourite Professors puts it:

Actually, [the principle of comparative advantage is] dead easy. No math, no arithmetic. It is in fact the soul of common sense. But you have to understand that comparative advantage is the principle of cooperation, as against competition. The word “advantage” gets us thinking of competition, which is perfectly reasonable in our own individual lives — we do compete with other businesses or other writers or whomever.

But the system as a whole, whatever it is, does well of course by cooperating, in business or science or family life. It’s not all we do, admittedly. We also compete. But within a household or a company or a world economy the job is to produce a result in the best way, cooperatively. If you are running a household or a sports team or a world economy, you would want to assign roles to the various contributors to the common purpose sensibly. It turns out to be precisely on grounds of comparative advantage.

If anyone is arguing against the CFTA, that’s fine. But it is important that they are arguing against a free trade area and not a free trade agreement. It is quite frustrating when the same characters like Frank Jacobs just put the same arguments they made against the EPA a couple of years ago inside the microwave and serve it for the CFTA in the same plate.

If you don’t like a free trade area and you don’t like a free trade agreement, maybe it is time for you to tell us how you really feel.

FF

“Hate speech”!

Almost out of thin air, and over the last two years, we have managed to create a controversy around this concept. In the effort to make sense of the different threads that have woven a patchy tapestry around the concept, two contexts offer a proximate explanation. First, is the fact that we are in the run up to the end of an election cycle. Given how poorly our elected officials (whether in the executive branch or the supposedly hallowed chambers of our legislatures) have performed since 2015, it is understandable that they might feel a need to create distractions that divert the electorate’s attention away from the more serious concerns about the proper husbandry of the economy. If this were the goal, the resulting intensity of the debate around free speech is a worthy outcome.

But there is a second, more honourable, possibility. And this is that a young democracy, concerned to take its cue from the practice in more advanced places, and seeing how much navel-gazing takes place in Europe and North America around this concept, may have concluded that its ability to carry on an equally intense discussion around the idea of “hate speech” could just drive it towards, or, better still, might be its coming-of-age moment. One could argue, by extension, that on the balance of evidence, the latter might be the more desirable driver of our ongoing debate around “hate speech”. If, for nothing else, because the former explanation would simply confirm the cynical manipulation of the public space that has since become the bane of the economy.

All this was before the Senate muddied the waters further. Or rather a bill making its way through the Senate threatened to change the terms of the debate fundamentally. Apparently, our distinguished senators propose to hang by their neck (or is it shoot at a firing squad) until pronounced dead, anyone found guilty of “hate speech”. Now, it is easy (even tempting) to include this denouement as part of the initial explanation of the hubbub around “hate speech” in the country. In which case, the Senate is simply looking for further distraction from its poor legislative record, thus far.

The possibility, however distant this might be, that our legislators may, indeed, imagine this bill their own contribution to the discussion by mankind of proper responses to “hate speech”, is worrisome and difficult to ignore. Currently, the only thing more disturbing than this possibility is the absence of a national consensus around what qualifies as “hate speech”. And this is not necessarily as bad as it sounds. Even in those places whose legal practices our legislations ape, the agreements around what qualifies as “hate speech” are often so broad as to be without meaning outside of clear historical contexts.

In most such jurisdictions, in order to succeed to the “hate” noun, speech must be directed against an individual or group based on attributes that are specific to them. Again, it could be speech that invites violence against protected groups and individual members of such groups. Accordingly, anti-Semitic speech would be a crime in most European and North American countries. As would homophobic speech. Yet, neither would earn you as much as a ticking off in Nigeria. We, also do not have constitutionally protected groups whose sensibilities would be reinforced behind a curtain of legislation designed to prevent hate speech directed at them.

The Igbos do, however, present an interesting proposition in this regard. From being called “Yanmiris”, now and again beheaded in the North, to being denied rental accommodation by landlords in Lagos, there just might exist a case for protecting the Igbos from “hate speech”. Additionally, anecdotal evidence would support the sense that the rest of the country still has a beef with the Igbos. And, who knows, the sense of marginalisation subscribed to by some in the south-east of the country may be mollified by such protection.

The biggest let to this line of argument, though, is that the Igbos can look after themselves, and have continued to do so admirably well — and most Igbos might consider whatever benefits potential protection from possible “hate speech” offers part of a continuing refusal by the rest of the country to transact with them on equal terms. Besides, the pejorative epithets used across the country to describe other ethnic groups cut in many directions: “ndi ofe mmanu”; “kobokobo”; “gambari”, etc. Indeed, I was reminded that the bad blood that bank tellers in the country engender with bank customers, might just be good enough to ring-fence bank tellers with some form of anti-“hate speech” legislation — bank tellers are daily threatened with unspeakable harm by irate bank customers.

All of which brings us to the question of how we perceive our democracy. In the end, a democracy is about the many freedoms the folks practicing it purport to aim at (and enjoy). Amongst these, the right of a people to constitute a government as part of the process of securing these freedoms, up to, and including the right to change or remove any government that becomes injurious to these freedoms, is arguably one of the most important. Within this context, none of the freedoms that a free people enjoy is more important than the right to express themselves, including the right to choose with whom they will associate.

If therefore, any society is to define a duty to protect certain of its myriad components from this free expression of ideas, it can only do so with extreme caution and great parsimony. Expressed differently, and to paraphrase the University of Chicago’s “Report of the Committee on Freedom of Expression”, “it is not the proper role of the (Nigerian State) to attempt to shield individuals from ideas and opinions they find unwelcome, disagreeable, or even deeply offensive”. Of course, government “may restrict expression that violates the law, that falsely defames a specific individual, that constitutes a genuine threat or harassment, that unjustifiably invades substantial privacy or confidentiality interests, or that is otherwise directly incompatible with” its functioning.

By proposing the death penalty for “hate speech”, the Nigerian Senate, through possible restrictions on the kinds of conversation without which a democracy may not function properly, may itself be guilty of propagating “hate speech”. Against our nascent democracy!

“Culture wars” divide societies as much as they define them. Over the years, in parts of Europe and North America, these intense and often arcane ideological arguments have been prosecuted over an equally bewildering array of issues: universal suffrage; slavery; abortion; lesbian, bisexual, gay, and transgender rights, etc. Nearly always, these are often long-drawn and very involved conversations about how attitudes to these issues define a people. Just as much, narratives at the edge have invited levels of violence that seem at odd with the end purpose of the main arguments. Inevitable, this, given that each side to the debates, invariable claim that they are the true representatives of the zeitgeist. A time-lapse rendering of each strand of the many perspectives that have come to define these culture wars, however, describes in finer detail, how both sides of the argument contributes to society’s re-appraisal of itself.

Do culture wars then lead to more liberal spaces? Or are they implicated in “political decay”? The context in which these wars take place would seem to matter in resolving this question. The more open societies are, the more plural the debates that take place within them. Similarly, the less acerbic these disputations are, and the less likely they are to be sublimated (taking on, thereafter, forms that make it impossible for the respective political systems to adjust to changes in their environments).

Put this way, “culture wars” are but a part of the cut-and-thrust of the many conversations that must take place as societies come into an understanding of themselves, and thereafter proceed to define themselves as unique spaces. Are they, therefore, identitarian? Yes. But not only in the way in which they help the respective social groups which cling to their different aspects to define themselves as different. But just as well in how they help societies that have resolved some of the questions to which they apply describe themselves as different from (if not morally superior to) others that may not have posed these questions or are themselves at relatively earlier periods of their own battles.

In this rather broad sense, culture wars, the perspectives around which they are prosecuted, and the intensity with which they are fought are but access codes with which societies may be decrypted.

How do we (in Nigeria) shape up?

Most commentators on these matters are agreed that our identities (how they are constructed, and the realities they speak to) still coalesce around the primal: ethnic groupings; the church, etc. And the tensions between these two nearly always capture all that passes for “culture wars” here. While they may not yet have donned the toga of the existential battle between adherents of traditionalist values on one hand, and defenders of social liberal values on the other, they clearly speak to the challenges of development that these address. Indeed, one could argue that because at the primordial level that our debates remain stuck they speak to quotidian challenges more than do the debates in the West between conservatives and social democratic traditions, our own issues matter more.

Take the ongoing gory debate between pastoralists and herdsmen across the country’s food basket — and the at times farcical reflection of it among our talking heads. Notwithstanding some of the resonances about this matter from our echo chambers, it is clear that this difference is as much a contest for lebensraum as it is one upshot of growing resource constraints. On one hand, unambiguous definitions of the rights of ingress and egress are central to managing interfaces in multicultural societies. Yet, even within properly defined spaces, a thinning of resources (water as in this instance), by narrowing the space within which the respective parties must co-exist, invariably raise tensions.

At bottom, though, whether it is the search for a bigger living space, or how access to resources within such spaces are divvied up, questions of efficiency remain central to the intensity of culture wars, and their chances of resulting in arrangements that support society’s progress. Which of the competing views are likeliest to result in a more efficient use of the living room and the resources available therein? This is the central question that a goal-oriented approach to understanding culture wars seeks to answer. It should help that the problem is posed in as free a way as possible. And that the resulting debate goes on with few hindrances to the canvassing of competing perspectives.

So, open debate helps.

But then this leads to the paradox of democracies being more prone to culture wars, while remaining the most efficient framework within which they may play out. Our challenge, therefore, if the differences that will define the future of this space are not to lead to political decay is to strengthen as many “voices” as possible, while smoothening the edges of the debates to deny fringe elements their distortive appeal.

A little over a decade ago, the Great Recession was in its birth throes. Across the globe, there was no consensus over the nature of the beast that was going to emerge; but there was fear about how much of what was then the “new normal” was going to be altered by the fact. Back home, the echo chambers (economy and finance) reverberated to worries over contagion. From the then-governor of the central bank’s understanding (that the domestic economy was insulated from the ructions that had seized the global economic and financial centres), the conversation shuttled between concern with the likely transmission mechanism, and the length of the lag between a crisis abroad, and evidence of its ripples back home.

In the end, (besides the main lessons from the eventual seizure of the domestic economy in response to the Great Recession) two useful lessons were learnt from that episode. The first was that the trade route turn out to be the most potent channel through which global economic developments reach the domestic economy. This is as much the result of our continued failure to reform the economy away from its perennial addiction to hydrocarbon export earnings, as it is about these earnings making up a significant portion of official receipts. The second lesson was that no economy can afford to become more open to global trade, while thinking itself immune to developments in the global markets. Thus, the more open an economy, the shorter the lag between developments in the global economy and its transmission to the local one.

As it was then, so it clearly is today.

Last week, global equities markets were seized by a sell-off. By close of trading on Thursday, the Dow was down 1,000 points. By Tuesday, the S&P 500 was down 9.7% on the record levels it reached on January 26, 2018. And the contagion spread like a wildfire across the rest of the developed world ― Europe and Asia similarly saw sell-offs in their stock markets. The immediate cause of the funk in the U.S. was growing evidence of strong wage pressures there. For some time now, the U.S. economy has been in recovery mood. Output has grown steadily, and non-farm jobs have been created at a rate of about 200,000 new jobs monthly. Indeed, at a little above 4%, unemployment has lingered at a rate at which most commentators expected wages to go up. Their failure to do so until recently was one of the new conundrums before policy makers in the developed economies.

Rising wages feed into general price increases, and last year, the U.S. Federal Reserve’s Open Market Committee chose to act to nip possible price rises in the bud by raising its benchmark interest rates. Rising wages, also cut into companies’ profits, as labour takes a growing share of this. The reaction, in the U.S. markets last week was, thus, to the twin impulses of reduced company profits (as wages rose), and higher returns on bonds and associated gilts (as the markets tried to compensate for rising prices, and the U.S. central bank’s inevitable rate hike to keep domestic price rises in check — recall that the Feds had already signalled three rate hikes this year). By close of business last week, the yield on 10-year U.S. bonds were nudging 3%.

Part of the global sell-off, then, simply reflected fund managers plying into U.S. bonds. The dollar strengthened on the back of this demand (and the prospects of higher yields on dollar-denominated assets). By close of business last week, the greenback was at its highest against major traded currencies in nearly 15 months. And as the dollar rose, oil prices headed southwards (arguably because investors in oil stocks were selling these to build up their positions in dollar assets).

Lower oil prices are a big worry for us. Forget the focus on the balance on the gross external reserve, and on our multiple exchange rate architecture. The Nigerian economy is denominated in barrels of oil (currently roughly at production levels of about 1.8 million barrels a day). If the price of oil softens, domestic output slacks. At about 2.0% this year (according to most experts estimates) domestic output growth is nowhere near enough to address the needs of a population growing at around 3% annually. If the economy were to grow more slowly, it would matter a lot that about 40% of its youthful population is not in employment, education, or training.

Frightening, though, the prospects of the bottom falling out of the global oil market is, a rising dollar presents a more forbidding augury. Yes, it would mean we’d have to shovel out more naira to hold the precious greenback. But often, a strengthening dollar means rebalancing of global portfolios toward the U.S., which means that emerging markets and frontier economies (such as ours) will start to see non-resident portfolio investors closing their domestic positions, and moving out.

The All-Share Index fell all through last week, closely mirroring the global equity sell-off. And this wasn’t all bad news (or, indeed, because of bad news) some market watchers insist that this was purely coincidental (it was our season of “profit taking” it seems). The yields on domestic bonds were also up last week (by about 0.7 percentage points, according to a bank treasurer I spoke with). The jury is, thus, still out on the degree of sell-off of naira-denominated assets that we should expect in response to the on-going “correction” in the U.S. on the negative side of this conversation, another “expert” that I spoke to described “profit taking” in the local economy as a natural reflex for funds that have suffered losses from the sell-off elsewhere. Gains from the Nigerian end of the portfolio will come in handy plugging leaks elsewhere.

That said, more than the degree of responsiveness of the domestic economy to changes in global financing conditions, it would matter how the domestic monetary authority manages the potential exit of non-resident portfolio investors. It helps that domestic reserves are robust enough to match the dollar needs of non-resident investors were they all to up sticks and leave today. But it would be even more important how the central bank manages the flow of dollars to them. Clearly, therefore, this vulnerability means that for the Nigerian economy, a weak dollar is not the chance to cut interest rates and drive output growth that it ought ordinarily to be. Unhelpful, therefore, is the central bank’s current commitment to a single digit interest rate position by mid-year. The current fundamentals of the economy, and the changes in its operating environment seem to point to rate rises this year. Unfortunately, without its policy committee in place, the Central Bank of Nigeria (CBN) may be going into its most serious fight in a decade with both hands secured behind it.

This time, you don’t have to flip through the pages of the newspapers. A brief look through the inbox would do just as well. The profusion of links on the topic clearly indicate that we are, once again, at that season of the year, when the financial services sector is abuzz with consultants claiming to be able to make sense of the 2018 Appropriations Bill. Budget-themed seminars, workshops, and talkathons are all the rage. No consultant is worth the description who cannot point to a perspective on the budget. Few banks can keep from sending their top personnel to these events. And no bank CEO is worth his salt, who doesn’t get a chance to pontificate at one. All of which make the question “What is there to know about the federal government’s 2018 budget? Or put differently, can anything be known about the budget?”, a surprising one.

This amazement lasts only for as long as it takes to contemplate the fact that every bill must go through the National Assembly before the president’s eventual assent turns it into an act of parliament. Given, then that the budget bill is but a proposal, it is even harder to make sense of the many budget sessions that have been organised around it. In explanation, I have often heard it argued that over the years, the tinkering by the National Assembly with the appropriation acts are often of a marginal nature. According to this perspective, it is then possible within the confines of the bill, as is, to try to discern government’s tax and spend intentions for the year. It is this Nostradamic need that the army of consultants that serves the financial services sector purports to be able to meet.

Yet, across the three tiers of government, annual budgets have failed, primarily, as statements of intent. The federal budget, here we take but the most glaring example, pretends to apply to the fiscal year that runs from January 1 every year to end-December of the same year. However, since we transitioned to civil rule in 1999, we have not managed to pass federal budgets in time. A cop-out prevents government from shutting down by allowing it to continue spending a portion of the last budget into the first quarter of the new year. Invariably, therefore, we get to convert the appropriation bill into an act by April of every year.

The chain that leads from the not-so-salubrious consequences of the late passage of the budget to its poor implementation is, accordingly, not much of a surprise, either. The very circumstances which make early passage impossible make efficient execution a daydream. Impediments in the path of both these processes include the fact that we are still navigating the path through a very young democracy, an inability of major players in the system to look beyond narrow concerns and see the bigger picture, and structural difficulties, including that presented by the presidency’s “due process” office.

Much of these difficulties show up in the execution of the capital expenditure component of the budget. And this matters. Our poor infrastructure is complicit in our continuing underdevelopment. By one recent account, if light from the mains were steady, we should see an annual bump in domestic output growth of around 200 basis points. Who knows how much good roads, railways, and ports could add to that? Of course, good schools and healthcare facilities do not just bump up domestic output growth, they push the production possibility frontier that much further out. Social investment of this type creates, in other words, multipliers and accelerators that bump up the economy’s trend growth rate.

In this sense, were the thrust of these consultant-driven talkfests focussed on fixing these shortcomings in the budgeting process, they would obviate much of the concern about their utility. But the difficulty with our governments and their budgets goes beyond process and procedural hurdles. For if nothing at all, successive governments since 1999 have had no problems implementing the recurrent portion of the budget. None of the advertised impediments (both structural and conceptual) appear to matter in this regard. Does it matter that several years after committing to prune the size of the state, more than two-thirds of the annual federal spend is taking up with paying salaries, procuring diesel for generating sets, and purchasing office stationery?

If, however, last year’s instalment of these budget seminars serves as a useful point of departure, their focus will not be on the design of fixes for our leaky public expenditure management framework. Instead, speaker after speaker would strive to demonstrate a familiarity with the details of the 2018 Appropriation Bill, and how these details affect the respective sectors of the economy. In other words, as with the real economy, these seminars would be focussed on treating a bad case of ringworm on a leprous patient.

The fact that former president (now “doctor”) Olusegun Obasanjo courts controversy is apodeictic. Hard to agree on, though, is whether the ruckus generated by his recent missive to our incumbent president is more divisive than an earlier one to another sitting president. Much of the conversation around his new letter reprises the responses to the former one, however. More noticeable, though, is the fact that the tension between the “message” and “messenger” that’s increasingly become a feature of the template with which Dr. Obasanjo’s interventions in the polity are evaluated is swinging towards a less charitable view of this ex-president’s contribution to our space.

However Dr. Obasanjo’s legacy shapes out, his solipsism would be a major ingredient of this assessment. For him, the “I” is all there is. Thus, whether it’s his written account of his role in the civil war, or of his recent foray in government as an elected president, his exploits regularly take the “S” off Superman’s garment. In consequence, as “superhero”, his universe of spectators is bifurcated into adulating (brown-nosed?) fans on one hand, and opposing villains (to be put down with extreme prejudice?), on the other. Thus afflicted, it was always inevitable that the nation’s recollection of his 8 years in office (from 1999 to 2007) were going to continuously labour under his authoritarian impulses, and the apparent attempt towards the end of his second term in office to extend his tenure beyond constitutional limits.

Some would argue that this reading of the ex-president isn’t sufficiently nuanced. Be that as it may. By far the bigger consequence of Dr. Obasanjo’s outsized ego is that once persuaded that he is the grand solution to the country’s many woes, it was only likely that he would have wanted to stay in office until the last of such difficulties was surmounted. In this sense, his continued interventions simply extend this logic that much farther. And yet, Baba Iyabo, as those with a more favourable view of him call him, is no Narcissus. He may pine away at his reflection in the mirror, but is often practical enough to prevent from turning into a flower.

Accordingly, a significant part of the groundwork for legislation that the country needs to function at the cutting edge of growth and development were laid during his tenure. The 2004 Pension Reform Act provided the basis for the transfer of pension administration in the country from the defined benefits to the defined contributions model. Thus, addressing (potentially) the problem of underfunding of many public pension schemes. The Fiscal Responsibility Act and its focus on ensuring a prudent public expenditure management process was just as important as the change to the enabling statutes of the central bank, which ensured that an independent central bank could pursue monetary policy without the threat of fiscal dominance. Then, there was the concern around the fidelity of the annual budgeting process that led to the setting up of the Budget Monitoring and Price Intelligence Unit (the “Due Process” office) in the presidency.

Cynics could argue that not even the Obasanjo presidency lived by its own rules. The problem with this perspective is that the same argument could also be made in explaining the failure of successive federal governments to strengthen these functions. To take but one example, evidence abounds that, today, the Central Bank of Nigeria, despite the administrative and goal autonomy embedded in its main statute, is in the grip of fiscal dominance as debilitating as it was before 2007. Describing the problem posed by this for the economy, a recent analysis of the 2018 Appropriation Bill refers to the “gaps (in the bill as)…likely indicated in overdrafts from the Central Bank of Nigeria to the FG; these jumped from N1.76tn (in December 2016), to N2.63tn at the end of fiscal year 2016 (2017?). Worth noting is that the FG’s indebtedness to the Central Bank of Nigeria (CBN) was worth a significantly less N349.7bn, as at October 2014.” In addition, the “due process” function is increasingly indicted as one of the structural bottlenecks impeding the implementation of the capital expenditure portion of the federal budget.

Beyond these concern over quantities, it is hard, also, to point to the same ferment of ideas in the governments (all put together) that have succeeded Dr. Obasanjo as there was in the debate leading up to the negotiation and agreement in 2005 of the deal with the Paris Club that saw US$18bn of the country’s debt written off. Yet, a critical part of the response to ex-president Obasanjo’s recent criticism of the Buhari presidency have heard mentions of the Buhari administration achieving more in the three years it’s been in office than did the Obasanjo administration in 8 years.

True, the Obasanjo years were excessive in certain respects. The military incursion in Odi may have violated human rights conventions. And few who tried to stare down the then president lived (politically) to tell the story. But all the main indices speak of an economy that has worsened since Mr. Buhari took over: unemployment/underemployment, inflation, the economy’ debt burden, domestic security (touted as President Buhari’s forte in the run-up to the last general elections) ― the list is near endless. Then there’s the danger that these numbers do not quite capture the deterioration in adjusted quality of life measurements over the last three years. Anecdotal evidence suggests worsening living conditions for most Nigerians.

For these reasons alone, men of goodwill owe a duty of concern over the economy’s trajectory. And it shouldn’t matter that much that, once, this particular elder tried to asphyxiate our infants. It’s enough that, today, he’s pointing us away from choking off whatever life is left in our poor little ones!

Those who would defend the Buhari administration against charges of incompetence, invariably offer two explanations for the administration’s apparent failure to deliver on its pre-election promises. The first explanation seeks to minimise the administration’s agency. According to it, such was the ineptitude of the Jonathan administration that it bequeathed a poisoned chalice to its immediate successor. Then, critics of the administration are also invited to recognise the “fact” that the task of fixing the rot that is the Nigerian state would take all of a generation — if not more. The point here being that it is unfair to assess the administration after only two years in office.

One not-so-obvious difficulty with the latter part of the pro-Buhari narrative is that it holds out the possibility that supporters of the administration might one day demand a thirty-year tenure for it in order to set the country right. The incompetence that litters the highest offices of the state across the continent, and the unusual longevity in office of African potentates, is unfortunately premised on such thinking. Even then, two things currently stand in the way of this possibility today: Mr. Buhari’s age; and constitutional restrictions on how long a leader can remain in office before elections are held.

Underlying both these excuses for the incumbent government is a rarely voiced acknowledgement: that the administration has not done as much as its pre-election rhetoric suggested. This is not about the “eternity” taken by the administration to set itself up, in the first place. Although that was useful, in itself, as a precursor of the quiescent pace of governance that we have now become familiar with. It isn’t also about the recent admission by the works and housing minister that his ministry did not carry out any capital project last year. Truth is, it barely carried out any the year before, either. Again, though, Mr. Babatunde Fashola’s fessing up supports the sense that we haven’t invested any more in driving capacity and productivity growth under the Buhari administration than we did under any of its immediate predecessors. Nor is the problem with the incumbent administration derivable from the fact that the recent return to economic growth, albeit slow, owes largely to the recovery in the global market for crude oil; and not to our design.

The administration may not have done much to bring about any level of change in the country. But by far its biggest handicap is the skinny nature (absence, may be) of its vision. There’s a part played here by the laconic propensity of the president. A less curt persona may have invited insights into his vision of possible solutions to the myriad (political, social, and economic) problems confronting the economy. And these insights could then have formed part of the building blocks of possible solutions. Only slightly less injurious than Mr. Buhari’s difficulty with expressing himself, however, is the compensating tendency of the more prolix members of the administration to go off on a tangent — as when the communications minister essayed to build a new economic argument around the accoutrements of our community of masquerades, or when the agriculture minister chose to make a Bronx cheer at the unemployment/underemployment data released by the National Bureau of Statistics. This reinforces the sense of the administration’s lack of a rudder.

At the intersection of all these tendencies and handicaps, there has been one unexpected boon. A large part of the populace has conflated the president’s uncommunicative ways with depth. Aloof, and far removed from our everyday concerns, he is as close as Nigeria has gotten to having an official guru in recent times. Add to his distance, the sense of his incorruptibility, and a near-mythical persona emerges. Admittedly, there is something prosaic about asking a guru to describe his goals for specific sectors of the nation, the timelines for achieving these goals, and how he intends to resource all of these. If he were mortal, these would be proper questions. To ask them of a modern-day guru, however, is to delay his apotheosis. And even the most callow acolytes know not to do this much harm.

This is the myth, alas, around which the run-up to elections next year will be erected. There are many ways to deal with this myth. By far the easiest is to hope to parlay it into victory in next year’s general elections. But that way, we consign the economy to another eight years of lethargic growth, in the hope that global oil prices will remain elevated for that long. Still, that will be a wrong way to address the challenges of growth and development facing the economy. Better, therefore, to arrange the debates leading up to next year’s general elections around competing visions of development, including goals for specific sectors of the economy, timelines for reaching these goals, and resourcing for these.

God-like Mr. Buhari may be. But the challenges faced by Nigerians are quotidian, deserving of more mortal application.

The U.S. president may (or may not) have described some countries from which migrants reach his country as “shit-holes”. (On the balance of evidence — Mr. Donald Trump’s penchant for opening his mouth before engaging the gears in his head, his loquaciousness, and his mendacity — in all likelihood, he did say so). However, at this point, none of that matters anymore. Nor does it matter how “shit-hole” is defined. And it would seem that the print media across different countries struggled to render the expletive differently: whether as receptacle for faecal matter — a toilet; or as the tail-end of the alimentary canal — an arsehole.

In the end, it matters more that the consensus amongst certain commentators here (in Nigeria, if not on the continent) is that the expletive is one that Africa and Africans have earned. Choose your index — gross domestic product, government’s share of this; adult literacy levels; inflation; employment levels; etc. Since the wave of state independence in the late 1950s and early 1960s, we (Africa and Africans) have struggled to govern ourselves “properly”. Especially when it looked like we were fully recovered from the succession of military-led governments, our recourse to the vote proved just as inadequate. Incompetent governments have predictably succeeded thieving administrations, and in the Nigerian case, have nearly always cohabited. Both after 1994, and after Nelson Mandela chose not to run for a second term in office as president, South Africa was supposed to be the counter-narrative to this barren tale. All of that is history, now.

Invariably, across the continent, votes are stolen and the conversation with the people around which most democratic governments structure their legitimacy turns into a monologue (outliers to this process, and there are, simply prove the rule). A monologue whose negative outcomes show up in just about every social and economic index. The manipulation of the political space that’s at the heart of the longevity of our rulers has also required ironclad control of our economies. Extractive industries and the rent that this produce thus conduce to the need for control of an endless succession of small-minded satraps. Thus constrained, our economies are unable to leverage the abundance of talent that so many people ought to grant it, are addicted to the export of single produce, and dependent on global demand for this that go up and down like the articulated chairs on a giant Ferris wheel.

Deprived of the private investment in the economy necessary to continuously push our production possibility frontiers forward, our people struggle to find meaningful work; and most eke out a miserable existence at the margin of the few “metropoles” supported by the proceeds from produce export. Inadequate investment in social infrastructure, anyway, would mean that even if the private sector were minded to build new factories, the chances of finding enough qualified nationals to man them would always be anything from slim to non-existent. On the other hand, poor public infrastructure ensures that few businesses in our economies may try to compensate for the shortfall in the quality of the domestic labour force by investing in capital-intensive processes.

Not surprisingly, we have some of the highest infant and maternal mortality rates in the world. Adult literacy levels trail the worst performing levels in other continents. Life expectancy levels on the continent are at the bottom of the log. Our schools (at all levels) produce far more graduates (one may ignore the question of quality at this juncture) than there’re ever workplaces for. And those entrusted with fixing these problems simply faff around, threatening in some cases (as once happened in Argentina with Cristina Fernández de Kirchner, and is currently happening in Venezuela under Nicolás Maduro) to undermine the (uncomfortable) numbers on their performance coming out of the official bean counters.

In this sense, Mr. Trump may have only been stating the obvious when he referred to a couple of African countries as “shit-holes”. But to then proceed to “own” the epithet as some of my compatriots appear minded to, is the moral equivalent of looking at the condition of the African-American (and you only need read Serena Williams account of her post-partum problems to get this) and then arguing that s/he is indeed a “Nigger”!

For Donald Trump did not mean his description as an objective characterisation of the pathetic state of the African condition. Then he may have been minded to understand the nutritive medium from which these conditions spring, if not offer solutions to these, as his country did for Europe after the Second World War. No, here was a Nazi describing as Jews, folks he’d as soon drive towards the gas chambers, as rob of whatever property of value they possessed. It was not for want of meaning that having described our places in less than flattering terms he indicated his preference for immigrants from Norway in replacement. Tall. Blonde. Blue-eyed. We confront anew the myth of the superiority of the Aryan race, but without the clear-headedness of the Third Reich.

Those then amongst us who would have us accept this new categorisation simply invite us to go on the train to Auschwitz without so much as a murmur.

The fuel queues that suddenly re-emerged in the dying days of last year have hurt in many ways. The obvious ones we are now familiar with. Yet, the feeling of despair that follows the spectacle of another empty filling station, even as one’s fuel indicator is beeping away; the time spent on the endlessly snaking queues; and the obsequious solicitousness of pump attendants pale in comparison with a newer difficulty.

The debate between defendants of the (public policy-making) status quo and those whose understanding of the path out of the current stasis is to advocate more reliance on market forces, would have been worth paying attention to, were it not increasingly ugly. Markets are impersonal. Indeed, given the new phrases sneaking their ways into our registers (“those left behind”, “children of nowhere”, etc.) you could even argue that the markets do not care about those concerns that strengthen our claim to being human. Besides, markets don’t work as fluently as their proponents would have us believe. “Market failures” do not just hurt the “poor and the vulnerable”. They often result in egregious resource misallocations in the sectors where they occur.

Ordinarily, then, you’d expect markets to be proffered as solutions to resource allocation problems with a considerable helping of salt. Not so, at all! Invariably, advocates of the balance between demand and supply as a solution to the tension between scarce resources and plentiful demand rarely are a humble type. They nearly always have the zealot’s proselytising instinct. Which is one reason why debates around policy choices that has them in play, tend to degenerate into mutual abuse. Even then, the opposing side to this debate isn’t without its downside. Possibly the most telling argument against those who would keep the content and direction of public policy unchanged in our country today (despite the clear and growing signs of system failure) is the one allegedly made by Albert Einstein in presumably different circumstances: “The definition of insanity is doing the same thing over and over again, but expecting different results”.

How to square this circle?

The most persuasive point that could be made here, is that provided by the relatively short history of the market for mobile telephony. As with the domestic film industry (another important success story) government touches this sub-sector only tangentially — as regulator. Neither entrance, nor exit is as easy as advocates of the market would argue. In appearance and in practice, the industry is an oligopoly — with the possibility of stitching up arrangements that support prices way above costs, a real and ever-present threat. Thus, on its introduction, the sub-sector came in with prices for its products and services that were way beyond the reach of the “poor and vulnerable” — SIM cards retailed for N25,000, and handsets were no cheaper. Today, the same products are on offer for free — handsets may not be cheaper, but compared with the bricks that were on offer then, I’m not sure there’s much basis for comparison.

Thus, the argument that a market solution to our perennial fuel problem could push prices up isn’t exactly without a basis. But with a competent regulatory framework, and a fairly efficient market (both of which we seemed to have achieved in the mobile telephony sub-sector) we should see prices trend downwards over the medium term. In support of this position, it is almost a given that the current processes by which fuel is imported into the country are not guaranteed to seek least-cost options. Whether, it was the manipulation of the subsidy scheme under the Jonathan arrangement, the movement by the Buhari government of the subsidy scheme off-balance sheet, or the putative agreement to conceal the subsidy, again, by offering scarce foreign exchange to fuel importers well below the market clearing rates, we confront a most inefficient system.

Focus on the pump-gate price of petrol, and one could sustain the delusion that to prevent an increase in the price is the same thing as guaranteeing the poor their share of the national cake. Think though of the gains to be had from accessing foreign exchange at less than the market clearing rate (ostensibly for importing fuel), and being able to offload some (if not all) of this onto the black market (for foreign exchange)! The gains from round-tripping are, technically, in this sense, a transfer of resources to those who could do without them. Insofar as such transfers lead to leaner public purses, they are also a huge tax on the very folks that the current system purports to be designed to help.

I would argue, although much of the available evidence is anecdotal, that the net welfare losses that the poor bear on account of the current subsidy scheme is a bigger burden than are whatever benefits we all currently enjoying from having an official recommended retail price for fuel, which, now and again falls below the cost of supplying the product. Add the other costs that we bear each time the current arrangement succumbs to its own contradictions, and it is not simply insupportable. It might also qualify as the greatest rip-off of any people, anywhere, by their government, and the domestic version of the “deep state”.