Translating Nigeria’s Democratic Experiences to Tangible Economic Developments, By Rt. Hon. Onofiok Luke
Delivered at the Second Annual Public Lecture in Commemoration of the Birthday of Bishop (Dr.) Emmah ISONG Monday, October 26, 2015
The invitation extended to me to be the guest lecturer in this year’s distinguished lecture, the second in the series, is indeed a great honour. I consider it a unique opportunity and a privilege to be asked to make this presentation as part of activities to commemorate the 51st birthday anniversary and book presentation by God’s General and eminent Nigerian, Bishop Dr. Emmah Gospel Isong. Let me add very quickly that the lecture series by the man of God comes at the very point when the Body of Christ can no longer afford the price of staying aloof or sitting on the fence in matters of nation building and social re-engineering.
I therefore commend Bishop Isong for his clear show of love for his country. I pray that many more of him will stand up from across the congregations in our land to engage the leadership of this country through well-meaning critical discourses. Let me again thank the Bishop and the organisers of this lecture series for inviting me to share my thoughts on the topic: Translating Nigeria’s Democratic Experiences To Tangible Economic Developments. I wish to state from the outset that the views expressed in this lecture are purely personal. They do not represent or suggest the position of my official or political associations.
Nigeria’s democratic experience has survived and thrived uninterrupted for the past 16 years. Given the established relationship between democracy and peace (known as the Democratic Theory of Peace) and the extended connection between peace and economic development, the expectation that the flowering of democracy in Nigeria would translate into economic prosperity and development has attracted the attention of policy makers and scholars. Democracy has been argued by democratic pundits to serve as a credible tool of economic development and advancement in a fast changing world.
Democracy-Economic Development Nexus
Democracy is a political system of governance that thrives upon the consent of the governed through periodic free and fair elections. Periodic competitive elections serve as the principal mechanism for translating that consent into governmental authority. A standard democracy accommodates opposition parties, whose members enjoy fundamental human rights such as freedom of speech, assembly and movement necessary to voice their criticisms of the government openly.
As quoted in Schmitter and Karl (1991: 76): Modern political democracy is a system of governance in which rulers are held accountable for their actions in the public realm by citizens, acting indirectly through the competition and cooperation of their elected representatives. In conceptualising democracy, Claude Ake placed it in direct comparison with military autocracy to highlight the salient differences. In his view:
The military addresses the extreme and the extraordinary while democracy addresses the routine; the military values discipline and hierarchy, democracy values freedom and equality; the military is oriented to law and order, while democracy to diversity, contradictions and competitions; the method of the military is violent aggression, that of democracy is persuasion, negotiation and consensus building. (Ake, 1996: 31)
Furthermore, beyond having functional executive, legislative and judicial branches marked by proper separation of powers as well as checks and balances, a standard democracy must have a free and independent press. Contemporary development scholars argue that the most practical measurement of development harps upon seeing it through the quality of the living standard of individuals within a given society. In this regard, development is determined upon relative improvement or deterioration of the living standards of individuals. Dudley Seers (1963: 3) aptly captured this contemporary trend thus:
The questions to ask about a country’s development are therefore what has been happening to poverty? What has been happening to inequality? What has been happening to inequality? If all three of these have declined from high levels then beyond doubt this has been a period of development for the country concerned. If one or two of these central problems have been growing worst especially if all three levels have, it would be strange to call the result development even if per capita income is doubled.
Robert McNamara (1968: 22) had also noted that:
…development means economic, social and political progress. It means a reasonable standard of living and reasonable in this context requires continual redefinition; what is reasonable in an earlier stage of development will become unreasonable at a later stage.
To this end, Jackson (1996:240) opined that:
One of the terms most frequently used in descriptions of the world today is “development.” Each one uses the word “development” in somewhat different manner. To some, development means becoming industrialised – like the United States or Japan, for example. To others, development means having a growing economy. This is usually measured in terms of the expansion of Gross National Product (GNP). To still others, development is primarily a political phenomenon. They question how a society can change its economy it cannot establish collective goals and successfully administer their implementation. And to others, development means attaining a certain quality of life, based on the establishment of adequate healthcare, leisure time, and a system of public education, among other things. It is obvious, then, that the term must be defined before a discussion of the issue of development can begin.
The meaning of development appears to be in a state of constant mutation. In this regard, it appears difficult to disagree with Bhargava’s (1966:385) assertion that:
In no field does orthodoxy seem to last less long than in development economics. Today’s general strategy for economic growth becomes tomorrow’s barrier. A Factor considered crucial in one scheme becomes a highly dependent variable in another…
The causal link between democracy and development has been a controversial one. Arguably, when the countries of the world are examined as a whole, democracies appear to perform better in terms of economic development than autocracies or mixed polities do. Drawing from substantial empirical data and quantitative studies, there has been no advantage for autocracies over democracies for the past 40 years in terms of development. Democracies appear to have actually performed better – growing at 0.5% per capita per year faster than autocracies and mixed polities. More than simply growing at a faster rate, democracies seems to have outperformed autocracies in the consistency of their economic growth.
Theoretically, more democratized political systems can also stimulate economic growth and development. Thus, democracy may lead to economic growth (Heo & Tan, 2001). It is beneficial to conceptualize democracy as “political democracy” and “economic democracy” in the analysis of the relationship between democracy and economic growth. While multi-party system, free elections, freedom of press, participative and good governance, political stability are fundamental constituents of political democracy; free market, guarantee of the right of private ownership, minimisation of the public share in economic activities, freedom in the activities of business and credit system, regulation on labour market, economic rights and freedoms constitutes main tenets of economic democracy (Barro, 1996a:1; Doucouliagos and Ulubaşoğlu,2008:64)
Arguments in favour of democracy focus in one form or another on allocative efficiency: democracies allocate better the available resources to productive uses. One view is that since authoritarian rulers are not accountable to electorates, they have no incentives to maximize the total output but only their own rents. As a result, democracies better protect property rights, thus allowing a longer-term perspective to investors. There is also a vague sense that by permitting a free flow of information, democracies improve the quality of economic decisions.
The arguments against democracy claim that it hinders growth by reducing investment; the arguments in its favour maintain that it fosters growth by promoting allocative efficiency. Both may be true: the rate at which productive factors grow may be higher under dictatorship but the use of resources may be more efficient under democracy. And since these mechanisms work in opposite directions, the net effect may be that there is no difference between the two regimes in the average rates of growth they generate. The patterns of growth may differ but average rates of growth may be still the same.
Nigeria’s Democratic Stability and Economic Development
Huntington (1968) had argued that what matters for economic development is political stability, rather than the particular political institutions. Any system of political institutions promotes development as long as it maintains political order. To this end, the obvious challenge is “political instability.” The return to democracy in Nigeria has also witnessed many challenges including the difficult relationship between some political chief executives and their deputies intriguing intergovernmental relations, the rise and resurgence of sub-national groups that pose serious threat to the hegemony of the state, precarious inter-ethnic/inter-sectional relations, attempts to perpetuate the tenure of chief executives through constitutional amendments, and developments in electoral politics and conflicts.
Political instability, as measured by past or expected changes of chief executives, the frequency of strikes, anti-government demonstrations, or riots, appear to be much greater in democracies like Nigeria. Stability and good governance are the most significant characteristics of political systems. Political instability poses risks and uncertainties on long term economic policies.
Nigeria’s Democratic Experience and Economic Development
Our democratic experience spans from the first through the fourth republic. For the purpose of this paper, the discourse will be centered on the economic development of the fourth republic. This republic took off on very shaky grounds. Only a few did not doubt that we could come as far as we have come. Likewise was the doubt that the few achievements which we have recorded under the last three administrations were going to be possible. Howbeit very slow, Nigeria’s democracy has recorded a number of telling progresses.
The return of democratic governance in the country in 1999, brought along with it the introduction of series of reforms, aimed at redressing the distortions in the economy and restoring economic growth. It ushered in some degree of transparency and accountability in the system. The telecommunication sub-sector was liberalized and most of the ailing government enterprises were privatized. Attempts were made to rebuild the power sector, roads and airports that decayed over the years. An economic team was set up to aid the government through advocacy and evidence-based advice to manage the economy, and there was greater co-ordination of monetary and fiscal policies leading to robust macroeconomic outcomes. The Banking and Financial sector reforms were also undertaken.
One cannot forget so soon the era in our nation when we had failed banks, depositors lost their money, mostly savings, and were subsequently left in pains and penury. The story today is different as we now have financial institutions in which we have confidence. We now have banks which have teamed up to become consortiums, enlarged their coasts to the rest of the world and fund mega human empowerment projects in the country. Very unprecedentedly, our banks now have the capacity to fund oil and gas exploration projects as well as myriads of indigenous investments in high profile economic sectors like telecommunication. Take again, the strive towards food sufficiency in the last few years. Our food importation has dropped owing to certain recent efforts towards the empowerment of local farmers by the federal and state governments.
The reinvigoration of the manufacturing industry has also been very much encouraging. We have seen our leaders leverage on constitutional provisions to place bans on the importation of certain goods just to give our local manufacturers some edge. We have seen the outright encouragement of individual manufacturers to grow, an example being INNOSON Motors. Our country may not have achieved enough in the health sector. But compared to what obtained prior to 1999, we have made significant progress. Experts say the battle to achieve an improved healthcare delivery system is primarily responsible for the improved life expectancy from 46 years in 1999 to 52 years in 2014.
The reform in the downstream oil sector such as deregulation within the first decade of the fourth republic largely contributed to the disappearance of detestable long queues from filing stations in the country. Local players became active in the oil industry; indeed, Nigerian investors became firsthand beneficiaries of the wealth which accrued from their country’s crude oil. Although the full potentials of this reform is yet to manifest, especially considering that we still import fuel and subsidize fuel prices, our refineries are still epileptic, and racketeering in the oil industry remains commonplace. Nigerians however are not left in doubt that the much we have been able to achieve in the oil sector has only been made possible by the democratic system which we now run. These developments, to me, have been some instances of the translation of our democracy into tangible economic advancement.
Challenges to the realization of our full potentials
From the above references as well as a couple of other achievements which we have effectively attained through democracy, it would seem as if we have reached our Eldorado. But far from it. We are way behind where we should be, 55 years post-independence. The mere fact that we can count our achievements is a sheer indication that we have yet a long way to go with regards to making our democracy count tangibly. Now let us consider these.
How did we manage to build $509billion dollars in GDP in a few years, yet forgot to build 100 million Nigerians out of abject poverty? Why is Africa’s biggest economy the one with a national per capita poverty rate standing at 60% of the population? If the potentials of a people are better exploited within a democracy, why is one of the world’s most endowed nations the one looking up to western nations for aid to run most of its critical sectors? With an economic growth rate of 7% on the average annually, why are there more out of job Nigerians today? Is there any indication that we could have performed better? My answer is an emphatic YES! And this conclusion of mine is premised upon a close study of a few Asian countries which I rank as our contemporaries.
Two of these countries are Singapore, and Malaysia. For instance, while Nigeria’s economy blossomed with a GDP per capita of about $233 in 1970 and ranked 88th in the world, the Malaysian economy with about the same GDP per capita was ranked 110th in the world. Forty-five years later, the more open and upper-middle income economy of Malaysia ranks among the world’s best performing with an impressive GDP per capita of almost $11,000 according to the World Bank. On the contrary, Nigeria’s GDP stands at just $3,203. Compared with the Nigerian economy, the better managed Singaporean economy has had its GDP per capita shot up 59 times from $925 in 1970 to more than $56,000 in 2014 (World Bank). Evidently, we are far behind our contemporaries. There must be a missing link, and to me, this missing link can be attributed to three factors among others which constitute the challenges to our optimal performance.
First, leadership challenges evident in Nigeria’s flowering democracy make it difficult for democracy to serve as an expected instrument for economic development. Leadership in this context is viewed as structures, systems, functions, relationships and processes. The challenge of leadership is the challenge of accountability and responsibility. This significant variable – leadership – makes it difficult for democracy to fit as a template for ensuing economic development in Nigeria. The culpability of most leaders to follow ambitions outside of the public interest results in diminishing livelihoods, corruption, insecurity, poverty, socio-economic inequalities and relative deprivation – outcomes which combine to challenge democracy and its economic development insignia in Nigeria.
Therefore, Nigeria needs honest, sincere, and committed leadership. Until we have sincere leadership in the country, we can only continue to post bogus figures to demonstrate our economic growth but with little to show in the form of improved life for the Nigerian people. Nigeria has the capacity to have a bigger and stronger middle class. We have the capacity to create the enabling environment for young entrepreneurs to run our midlevel economy. It takes purposeful leadership to achieve all these. Technically speaking, it is not democratic governance per se that guarantees economic development but the quality of institutions that democracy parades. Democracy does not exist and operate in vacuum. It is made functional and effective by a tapestry of institutions, structures and leaders. However, institutions and structures are driven and propelled by leaders. To this end, leaders and by extension leadership is the ultimate ratio in the quest to translate democratic experience into tangible economic development.
Second, we suffer from consistent policy inconsistency, policy incoherence, and intermittent policy overhaul. The fact of government being a continuum seems to have eluded our successive leaders so badly. A lot of people-oriented programmes have been cut short in the last 16 years because every new government wants to begin a fresh agenda rather than continue with an existing economic policy put in place by his predecessor. This is why Nigeria has had at least five national economic development planning programmes since 1962, yet none has ever been implemented to the fullest. If a former governor or President offered free education to the poor as a policy of his administration, a new administration should rather look for ways to sustain and improve on the programme rather than cut it off on grounds of ego or political disagreements without considering how the poor beneficiaries of the programme would fare. If a 7-Point agenda of a former government is actualizable within the scope of present day economic realities, it should be sustained rather than be thrown out because it belonged to the former government.
Third, our relatively hostile investment environment has been one of the major reasons that we have been left behind by our contemporaries. Issues like multiple taxation of businesses continue to discourage large-scale investments. We know, of course, that many of the best performing economies of the world are some of those with the most open investment systems. Examples are the East Asian states which have become the investment destination of the world. The Chinese government alone cannot provide employment for its 1billion people. So it created a flexible environment for industries to thrive. Today, APPLE and their subsidiaries alone employ more than 1 million Chinese workers in their multiple assembling plants across the country.
Security has also been a key factor which makes the Nigerian business environment unfriendly. The hostilities in some Niger Delta communities and the insurgency in the North East of the country are issues which this democracy must urgently address if we are to maximise our potentials. Legal and institutional challenges have also contributed to our unfriendly investment environment. Legal concerns still arise from the Land Use Act, for instance. This explains why Nigeria ranks 170 among 189 economies in the world in terms of ease of doing business. According to the latest World Bank survey, it is easier to start a business in Singapore, Iraq, Ghana, Mali, and Togo than in Nigeria. Issues like these cannot remain unaddressed while we seek to drive gainful investments in the country.
Leveraging on progress made
Having looked at the challenges that we have faced, the solutions therein, I wish to offer personal thoughts on some of the actions I believe can enable us advance our economy on the platform of democracy.
I have always believed that one of the quickest ways for us to rise to our fullest potential is to embark on the total cleanup of our critical institutions and make them more efficient. As the American President, Barack Obama, said some time ago, what Africa, and indeed, Nigeria, needs are strong institutions and not strong men. We need to make conscious efforts towards reforming our institutions so that they become the focal points and not the men who head them. We must come up with policies and legislations which would turn things around in our critical sectors. Also, Nigeria must do more than just talk about diversification of our economy from oil. Our government has been oiled for too long by crude oil. The East Asian countries to which I made reference are stronger economies in spite that they have no oil. Agriculture, manufacturing, and expertise services are the key drivers of those economies. We must borrow a leaf from these nations.
Entrepreneurial development and innovation are the two veritable ways through which emerging and developed economies have built a strong middle class. We must grow this class of Nigerians. This is the one way to make our democracy count. We must begin to encourage private sector investments by giving certain waivers and funding startups through specialised banks.
Experiences elsewhere have shown that where federating units do not, on their own, pursue economic development objectives on a large scale, the federal system will become over burdened and will fail to grow fast no matter how much entrepreneurs it empowers or how many strong institutions it tries to put in place. This explains why states and regions in Nigeria must establish stronger economic ties among themselves towards the betterment of their people.
One way to achieve this is for the various regions in the country to begin to work as a household. States of the federation are believed to be doing far less than they have the capacity to do. If there exists a pool of income at the regional level, a lot more can be achieved for our people. While I am not a proponent of regionalism as a form of government in Nigeria, it is my strong conviction that if states of the different geopolitical zones in the country can come together and look inward, and create the platform to manage their resources as economic blocs, they will perform better than operate strictly as individuals with the federal government practically dictating the pace of their growth.
Following the 2012 South-South Economic Summit, I supported the idea that it was time that the region took seriously the pressing need to harmonise their economic interests and consolidate on their inherent potentials in order to better meet the economic needs of their states. I voiced out that since we have a national economic emergency at our hands, the formation of the BRACED (Bayelsa, Rivers, Akwa Ibom, Cross River, Edo, Delta states) Commission was a timely move to act as a region in order to take our destiny in our own hands. There has never been the need for political cooperation among the regions of the federation than now. The state governments should rather look at the possibility of tapping from their various comparative advantages than compete or express fear of one another’s credentials.
There must be cooperation across party lines. This is the time to begin joint projects across the region. During the last economic summit of the region, a proposal for a regional bank was made among other laudable resolutions. I do sincerely hope that actions are being taken to actualise them. Leaders in the south-south must begin to consider such thing as the building of a railway network to cut across the commercial nerve centres of the region for ease of transportation for the citizenry and movement of goods. Forging a way to depend less on federal handouts will enable governments at the regional level to explore avenues within their region in which they could generate revenue to embark on tangible people-oriented projects. The opportunity to enjoy this level of economic interaction is what democracy provides. The south-south region must begin now to plan for the future. The two states of Akwa Ibom and Cross River can be at the forefront of this regional planning and cooperation.
The conventional link between democracy and economic development is that democracy accelerates economic development. Democracy guarantees domestic peace and peace is the basis for economic prosperity and development. Democracy potentiality has the capacity for enhancing the responsiveness, accountability and transparency of the Nigerian State which are variables at the heart of economic development. Nigeria’s return to democratic rule has been marked by developments such as the implementation of reforms to address perceived economic problems and corruption.
Acknowledging that Nigeria’s fledgling democracy is no longer an experiment but an experience, political stability and by extension, economic development in Nigeria is contingent upon democratic survival.
With a projected population of more than 440million people by 2050, Nigeria will be the third most populous nation on earth. The year 2050 is thirty-five years away. For us to be able to cater for the expected population, we must begin now to take steps towards making today’s democracy count. Luckily, we have a very hardworking and supportive population. We the leadership must seize the opportunity today to make tangible impact. At no time in the history of our country have we seen the manner of national resilience and faith in our democracy as we have seen in the last five or six years.
Nigerians unanimously took a stand in 2011 and in 2015 when they craved a change in the way their lives were being run by those of us in government. What this portends over the years is that our people believe that their country can avail them the best possible dividend that comes with democracy. We the managers of our democracy therefore must do more than occupy offices. It is time to challenge ourselves positively. This is the time to make Nigeria’s longest lasting democracy count in the lives of our people. This is the time that leaders at every level must engage in critical thinking with regards to optimizing the opportunities that we have today. Our achievements so far are not commensurate with our capacity as a country. But thankfully, there is room for action. We must rise to the challenge today.
I thank you for listening.
A. Sat Obiyan and Kunle Amuwo, Nigeria’s Democratic Experience in the Fourth Republic Since 1999: Policies and Politics, Rowman & Littlefield, 2013
Claude Ake, Democracy and Development in Africa, Brookings: Brookings Institution Press, 1996, p. 31.
Duncan Clarke, Crude Continent: The Struggle for Africa’s Oil Prize, London: Profile Books, 2008, p. 97.
Dudley Seers, “The Meaning of Development,” International Development Review, vol. 11, no. 4, 1963, p. 3
Phillippe C. Schmitter and Terry Lynn Karl, “What Democracy Is … and is Not,” Journal of Democracy, vol. 2, no. 3, 1991, p. 76.
Robert McNamara, The Essence of Security, London: Hodder & Stoughton, 1968, p. 22.
R. J. Barro, “Economic Growth in a Cross Section of Countries,” Quarterly Journal of Economics, Vol. 106, No. 2, pp. 407-437.
R. Jackson (ed.), Global Issues, New York: Dushkin Publishing Group, 1996, p. 240.
Samuel Huntington, Political Order in Changing Societies, New Haven, CT: Yale University Press, 1968.
S.I Ebohon and C.O Emuedo, Democracy and Development: The Nigerian Experience, Global Journal of Social Science, Vol. 8, No. 2, 2009.
Uk Heo and Alexander C. Tan, Democracy and Economic Growth: A Causal Analysis, Comparative Politics, Vol. 33, No. 4 (Jul., 2001), pp. 463-473.
World Bank, World Development Indicators: Nigeria. http://data.worldbank.org/country/nigeria. Retrieved 23/10/15
World Bank, World Development Indicators: Malaysia http://data.worldbank.org/country/nigeria. Retrieved 23/10/15
World Bank, World Development Indicators: Singapore http://data.worldbank.org/country/nigeria. Retrieved 23/10/15
About the Author
Leave a Reply