How Nigeria Can Prosper Without Oil TheNigerialawyer

Professor Chukwuma Charles Soludo, a former Central Bank of
Nigeria Governor, has advocated that an alternative glorious future
(the next Nigeria for 400 or 752 million Nigerians) is
possible.

That is a future without oil but which, according to him, is “
powered by the country’s greatest asset—human capital plus
technology, and which guarantees security, prosperity and
happiness.”

He made the submission when he delivered a speech at The
Platform, entitled “Re-Designing the Nigerian Economy with New
Ideas”; at The Covenant Place, Beside the National Theatre, Iganmu;
on 1 October 2019.

The bi-annual event is in celebration of Nigeria’s 59th
Independence anniversary

Other economic analysts and experts who were there also included
Bismarck Rewane, Anik Peter among others.

Soludo said that but transition to that future requires a new
foundation as it is impossible to try to build a 100
storey-building upon the foundation of an old bungalow. Elements of
this foundation, according to him, include a Productive Progressive
(PP) Constitution that creates a competitive federation; devolution
of powers that unbundles Abuja and loosens its choking stranglehold
on the economy; a fiscal federalism that promotes competition,
innovation and hard work; a new judicial structure and performance
that brands Nigeria as a country of laws with the best judiciary in
Africa; and a new developmental politics with citizens power.

He advised the citizens not to be discouraged. In his words: “Of
course Nigeria has a long list of problems, but adversity comes
with opportunities. With a will to overcome, the problems should
not stop us. Nor should a few thousands of miscreants – kidnappers,
terrorists, internet scammers, bandits, drug barons, robbers, and
treasury looters – define us. As we build the foundation for the
next Nigeria, we must seize the narrative and sing a new song to
rebrand Nigeria. As we bemoan the rising poverty and unemployment,
we still remind ourselves that ours is still the largest economy in
Africa and Nigeria as home to the most populous black nation on
earth. When I hear about the 77 FBI list, I remember that Nigerians
constitute the most educated and highest earning immigrant
community in the US; when I hear about the drug barons, I remember
that Alaba Market has the largest business incubator in the world;
when the news about kidnappers, bandits and terrorists adorn the
newspaper headlines, I remember the over 200 million law abiding
and hard-working citizens; when I hear about the afrophobia and the
stereotyping of Nigerians in South Africa, I recall that the
richest black man and woman –Dangote and Mrs Alakija are Nigerians,
or that Tony Elumelu foundation is empowering thousands of young
African entrepreneurs or Allen Onyema/Air Peace recently took over
the job of government by transporting hundreds of Nigerians from
South Africa free of charge or that Glo communications is owned by
our own Mike Adenuga or that the former Secretary General of the
Commonwealth –Chief Emeka Anyaoku is a Nigerian, and yes, Nigerian
banks – Zenith, GTB, UBA, Access, FBN, Union, etc have, since after
banking consolidation, become our multinational corporations all
over Africa, and that Nigerian investment banker—Adebayo Ogunlesi
bought Gatwick and other airports in the UK.

He added: “When someone remarked that Obinwannne- the famed
Forbes kid alleged scammer is from Nnewi, I quickly reminded him
that Ibeto, Innoson Motors, Chikason, Coscharis, Emeka Offor, etc
are also from the old Nnewi. When someone tells me that our youths
are underperforming, I remind her of the youths at the Ikeja
Computer village or that a young man from Anambra just invented a
generator that runs on water or the young girls from Regina Pacis
secondary school, Onitsha who won the global prize for innovation,
and don’t forget that the patent for the world fastest computer
belongs to Philip Emeagwali and that Jelani Aliyu from Sokoto
designed the Chevrolet Volt car. Or when anyone tells me that
Nigerians can’t write, I mention our Nobel Laurette Wole Soyinka,
Chinua Achebe, and yes, the new kid on the block- Chimamanda
Adichie, etc. When I hear of the looting leaders of today, I
remember the visionary and selfless leaders of yesterday—Nnamdi
Azikiwe, Obafemi Awolowo, Ahmadu Bello, M.I. Okpara, Alex Ekwueme,
Shehu Shagari, Sam Mbakwe, Aminu Kano, Balarabe Musa; Bola Ige,
Lateef Jakande, Samuel Ogbemudia, and yes, former President
Obasanjo has earned his place in Nigeria’s history as a leader and
statesman, etc. Of course, we won’t forget our footballers,
athletes, musicians and Nollywood stars—all brandishing our green,
white, green flag to the world. The list is long, and sometimes I
wish that Wole Soyinka or Chimamanda would write a bestseller
entitled: “Nigeria: the Counter Narratives”.

The point here, according to Soludo, is that for every one big
challenge, there are possibly more than ten opportunities out
there. “I believe that God has blessed Nigeria with everything to
be the most prosperous home for the black race. We need to unleash
the creative geniuses in our people by designing the appropriate
institutions to power a 21st century economy without oil.”

Below is his full speech

Happy Independence Day Celebration!!!

Many thanks to Pastor Poju and the organizers of The Platform
for the invitation. Let us start with a disclaimer. We accepted the
invitation on 17th May, 2019 and had written our remarks a few
weeks back. When our membership of the Economic Advisory Council
was announced on the 16th September, we agonised as to whether we
should still honour the invitation or whether we should still
present the paper. Finally, we decided to be here but have removed
several of the pages that contain issues we believe should be on
the agenda of the Council— we do not want to pre-empt the work of
the Council. More specifically, we do not focus on the
macroeconomic, sectoral, and structural policies, programmes and
projects needed at the moment. We focus on the future, and
concentrate narrowly on the type of meta-level,
political-legal-governance foundation upon which the future can
sustainably stand. Our thesis is that if you want to change a
persisting economic structure, change the underling institutions
(we can write a fat book on this: our experience with the NEEDS
vis-à-vis banking recapitalization/consolidation was one case study
that showed that to translate the hitherto slogan of private
sector-led economy into reality needed a different
banking/financial institution…). For the national economy, it will
be difficult to have a competitive and prosperous post-oil economy
of the future (with additional hundreds of millions of citizens and
dwindling land space) with the same legal and institutional
foundation designed for consumption of oil rent. You can’t build a
100 storey-building upon a foundation of an old bungalow. A post
oil economy requires that all agents maximize their fullest
potentials, and what is required will be a national rather than a
federal response. You can’t clap with one hand. Once the focus is
wealth creation rather than sharing and consumption of oil rents,
we need a new national business model. Unfortunately, the link
between law- Constitution- institutions- Judiciary, etc and
economic transformation seems to be the weakest link in our design
of national agenda. In the future, hopefully the National Assembly,
Ministry of Justice, the states and other stakeholders might take
up the assignment….

CONTEXT:

We have not come to read the Book of Lamentations about
Nigeria’s woes, nor to sing the songs of David. We see the
half-empty glass, but we prefer to focus on the half-full glass. We
want to focus on the future—rather than the past or the present. As
mentioned above, we are asked to speak on “The Economic
Restructuring of Nigeria”—an omnibus topic indeed! Since the First
National Development Plan (1962- 68), transformation of the
economic structure/diversification has been the fulcrum of all
national plans. For decades, every government has tried its brand
of ‘economic restructuring’ or economic diversification and yet the
economy remains tied to the life-support of oil, peasant
agriculture and largely informal services sector. Income
inequality, poverty, and unemployment remain major defining
features of the economy.

The urgency of the moment is warranted by the context of the new
and complicating realities. Oil will be history in less than 20
years’ time but the pressures of peculiar demographics and
geography are upon us. Nigeria has one of the highest population
growth rates in the world. If current trends continue and you
believe the population figures, then the future may be
overwhelming. By the time a child born today turns 30 (about 2050),
there will be about 400 million Nigerians and when she is 80 (about
2100), there will be about 752 million Nigerians (third largest
population in the world). All these people will have to survive and
prosper in a tiny but declining land mass (923,000 sqkm) –
declining due to desertification and erosion, and Nigeria will have
the highest population density in the world among the top ten most
populous countries. Lagos is estimated to be home to some 88
million people by 2100 crammed in barely 3,345 sqkm of land (or
26,307 persons per sqkm—a nightmare! Lagos is clearly unsustainable
in the long run and risky for its business concentration). All
these people will need land, housing, water, food, power, education
and health facilities, sewage and waste disposal, transportation,
and yes, job, jobs! The population is very youthful with 43%
between 0-14 years old; 53% between 15-65 years and 4% over 65
years.

And the world is not waiting for Nigeria. The world is on the
4th Industrial revolution with digital economy and we are
struggling with the first stage of Rostow’s stages of growth.
Artificial intelligence together with other future technologies
such as robotics, synthetic biology, computational science,
nanotechnology, quantum computing, 3D and 4D printing, internet of
Things, cognitive science, self-driving vehicles, etc— will surely
produce totally different social and economic configurations than
what we know today. Check out China’s “Made in China 2025 Plan” and
its targeted top 10 industries with an aim to dominate the world.
All these entail humungous creative destruction going on with huge
job losses and future structural unemployment. While electric cars
are fast replacing diesel/petrol cars many of our people are still
building petrol stations; small shops are proliferating while
agglomeration in terms of huge shopping malls together with
e-shopping are the trend; automation is upon us, etc. Ordinary
people who can’t explain what has hit them, resort to all sorts of
criminal activities to survive.

Most futurologists believe that with billions of people being
added to the global population, only new systems for food, water,
energy, education, health, skills development and job creation,
economics and governance will avert potential disastrous
consequences for humanity and the environment (See the 2015-16
State of the Future). Economic restructuring strategy of the future
therefore entails thinking through the alternative future scenarios
and mapping out alternative possible proactive responses. In which
areas/sectors does Nigeria proactively position to become global
leaders by the end of 2050 or the century? Closer home, Nigeria has
signed the African Continental Free Trade Agreement (AfCFTA).
Insularity won’t be an option. The name of the game of the future
in an increasingly integrated world is innovate/compete or die.

Let’s break it down. Economic restructuring of the future is
about positioning Nigeria to compete and win in an increasingly
complex world thereby guaranteeing the security, prosperity and
happiness of the 400 or 752 million Nigerians, in a world without
oil. It will require deploying a gamut of
legal-regulatory-governance regimes, macro and sectoral policies
and programmes to alter the spatial/geographical concentration of
economic activities, structure of production from primary to
industrial and post-modern service sectors, from peasant to
commercial agriculture, from exhaustible natural resources to
renewable and dynamic human resource as engine of sustainable
development; etc. With a current GDP of about US$400 billion (down
from $540 billion) and negative per capita income growth (with
rising unemployment and poverty), the restructuring of the future
would entail transformational changes to generate and sustain broad
based growth of at least 7% (from recent 1-2%) which is required
for poverty reduction and employment generation. Put differently,
if we target to be a middle income country of say, US$7,500 per
capita by 2100 (from about $1,930 currently), then we need a GDP of
over US$5.5 trillion by 2100 (thereby requiring double digit annual
growth). The agenda to do this won’t just require thinking outside
of the box—it would require thinking without the box at all: big,
bold plan and action! At the macro level, the fundamental challenge
currently is that the economy is stuck at a very low speed lane in
the context of a debt cliff with little fiscal space, while
monetary policy is at near its limits, and low savings-investment
trap, with rising unemployment and poverty. To get to poverty
reducing and employment generating trajectory in the short-term
requires serious heavy lifting, with major difficult choices and
extraordinary coordination ahead. Surely the governments at all
levels have their jobs cut out for them, and we won’t dwell on that
here.

In sum, the alternative future that we see is one without oil,
and where other exhaustible natural resources play very little
role. The future economy will be driven by people—our youths and
technology. Nigeria’s people/youths remain its potentially greatest
asset— potentially renewable resource for productivity, huge
market, and even export. Yes, the next bigger than oil export
earner for Nigeria will (potentially) be its human capital.
Currently, Nigeria earns almost as much from oil exports as it
earns from remittances from its Diaspora. But we cannot export
illiterates in a world driven by digital revolution. The easiest
way to waste the future is to continue to churn out millions of
semi-illiterate, largely unemployable citizens, most of whom see
criminality as the only route to escape the poverty trap or drug as
the opium for solace. With an urbanization rate of over 5%, the
conflagration that might ensure when hundreds of millions surge to
the cities but can’t find jobs, housing, water and food can only be
imagined. Soon, the rich won’t be able to sleep because the poor,
homeless and hungry are awake.

By the way, who says that we can’t have smart population policy
that encourages people to have the number of children that they can
train, and also ensure reliable population census using biometrics
rather than the political population figures we have?

Whatever the case, the challenge is how to deliberately optimize
the potentials of the huge youthful population to be highly
productive at home and competitive/exportable abroad. An
educational system with 21st century curricula powered by
technology that guarantees one youth, one to three skills might be
a winning strategy. As the Western population ages and declines,
they would need productive labour and Nigeria can smartly position
to become the largest supplier of such labour- indirectly through
outsourcing or directly. Nigeria would have to leapfrog the
industrialization ladder and services sector to provide urban jobs
and rely upon smart technology to grow the food to feed the
hundreds of millions. Peasant agriculture has little future
especially as the population density surges with rapidly declining
plot of land per capita. If Nigeria prospers relative to its
neighbours, it would witness a surge in migration from other
African countries under the free movement of goods and persons
protocol—with all the further complications for existing
facilities.

THE CHALLENGE OF WEAK FOUNDATION

The question is whether the existing foundation is adequate or
appropriate for the dynamics and challenges of the future?
Unfortunately, the answer is no. Our Constitution, together with
its command and control institutions concentrated at Abuja was
designed for and around the sharing and consumption of oil rent. It
is largely obsolete for the demands of a productive economy
(without oil rents) which requires competitive and flexible rather
than unitary federalism. As the oil rent that held the system
together is tapering off, its internal contradictions have burst
open, requiring a coterie of survival/coping mechanisms to keep the
system afloat. But for how long?

See for example, the 12 clusters of variables that are
considered in computing the Fragile/Failed States Index by the U.S
Fund for Peace. The index which aims to “assess vulnerability to
collapse” summarizes the failure of Nigeria’s institution and
measures four clusters of variables, namely: a) Cohesion (security
apparatus, factionalized elite, and group grievance); b) Economic
(economic decline, uneven economic development, and human flight
and brain drain); c) Political (state legitimacy, public services,
and human rights and rule of law); and d) Social (demographic
pressures, refugees and IDPs, and external intervention). Nigeria’s
ranking has deteriorated from 54 in 2005 and now stands between 13
and 15 over the past eight years and largely in the Red Alert
category with countries such as Afghanistan, Iraq, Haiti, Guinea,
Syria, Yemen, Somalia, etc. Long-term sustainable transformation
must address the root of this systemic decline. In a multi-ethnic,
multi-religious society such as ours, designing institutions for
stability and prosperity requires great care and should always be a
work-in-progress.

Since 2005 when we delivered the Democracy Day Lecture and in
several of our previous articles (see “Nigeria Without Oil”; a
three-part article on the back page of ThisDay entitled
“Reconstructing Nigeria for Prosperity”, “The Political Economy of
Restructuring the Nigerian Federation”, etc) we have elaborately
demonstrated how the current Constitution and its institutions
stifle innovation and competition and hence inimical to rapid
economic transformation in a post-oil world. We showed how Section
162 of the Constitution has created a perverse Lottery Effect,
destroyed the incentive for wealth creation on the part of
governments and foisted an indolent culture of entitlements. As
opposed to the productive, self-financing regions of the First
Republic, all the tiers of government now converge at Abuja every
month to share largely oil revenue. Except perhaps Lagos State,
hardly any other state or local government or even the FGN can fund
its recurrent expenditures without oil money.

Add to the above the suffocating concentration of powers at
Abuja (see the long list of items on the exclusive and concurrent
lists of the Constitution). Consequently, the federal government is
saddled with hundreds of parastatals and agencies trying to
inefficiently micro manage the entire country, with the recurrent
expenditure of FGN plus debt service exceeding federal revenue.
Abuja imposes common rather than minimum standards. It sets the
same wage to be paid by states irrespective of their incomes—of
course on the assumption that the oil money will always be there to
pay for it. FGN maintains federal marriage registry, issues
drivers’ license—which should be local government affair, runs
primary and secondary schools, etc. We have centralized policing
even with state governors as ‘chief security officers’—and expect
the future 400 or 752 million Nigerians to be secured from Abuja.
The Federal Government has exclusive right over all minerals, while
the Land Use Act grants the Governors the right over land.

To get to the solid minerals, you must have access to the land
and the conflict between State and community powers over land
vis-à-vis the federal right to what is underneath it has not been
resolved. The enduring conflict as well as the continuing flow of
oil rents have combined to provide little incentive to develop the
solid minerals. The list is long and we don’t intend to rehash it
here. By trying to keep everyone in check, Abuja has inadvertently
held the entire country down.

One final example is the judicial system. Property rights and
rule of law constitute the foundation of a modern economy. In
Nigeria, we copied the American presidential system but forgot to
copy their multi-layered judicial system consistent with a
federation. Instead we are stuck with a highly centralized system
consistent with the command and control structure of the 1999
Constitution and its unitary federalism. Every little matter can
end up at the only Supreme Court: if someone steals his neighbour’s
goat in Calabar, or there is a dispute over ownership of a shop in
Jos or someone dupes a petty trader of her capital in Lagos, the
court cases may, on appeals, end up at the Supreme Court. A
pre-election dispute in a local government election in Yobe or Abia
state (a purely local and state affair) can also end up at the same
Supreme Court and in many cases the judgement comes after the wrong
candidate has served out the term.

The courts are congested: with about 117,000 pending cases at
the Federal High Court alone, estimated tens of thousands at the
Appeal court, and over 30,000 at the Supreme Court. Court cases,
including commercial disputes can last for decades. As the
population balloons, it is expected that the number of pending
cases under the current system will continue to multiply. The
prisons are overcrowded. Chidi Odinkalu estimates (using case study
of federal prisons in Imo state and if those are representative)
that the congestion rate is 170% and with 86% of prison inmates
awaiting trial. Most prisoners end up serving terms higher than
would have been the case if convicted. The judges are grossly
overworked and underpaid. Nigeria’s Supreme Court is probably the
only one in the world where the justices sit every day, and yet
pending cases keep mounting in thousands.

As the saying goes, justice delayed is justice denied. How do we
expect the future economy to compete and win in the new world in a
society where it can take more than 20 years to settle a simple
commercial dispute that takes few days in other countries? Also our
system for fighting corruption is again concentrated at Abuja. Can
we seriously expect the ICPC and EFCC to police 774 LGAs and the
impending 752 million Nigerians?

We can go on and on. Global evidence is that institutions drive
economic transformation but sadly much of our institutions are
either obsolete or inappropriate for the demands of the future.
Some analysts and politicians brandish economic blueprints for a
post-oil Nigeria but without the concomitant
legal-political-governance infrastructure to deliver such Plans.
This is actually a key missing link in many of the failed National
Plans not only in Nigeria but also in many countries. Such
economistic plans either sought to legislate politics out of public
policy or misunderstood change to be a push-button technocratic
process. Such plans are often predicated on the false assumption
that committed and visionary leadership to implement them will fall
from the skies without understanding that except by occasional
fluke, the type of leaders in a society is a product of the system.
In the end, politics will always trump economics.

It is fair to say that no issue commands a greater, broader
consensus in Nigeria today than a recognition that the current
system needs fundamental overhaul and hence the deafening call for
“restructuring” the Nigerian federation. Almost the entire Nigerian
socio-cultural-political groups (South West/Yoruba Nation; South
South; South East/Ndigbo; Middle Belt, and the former Northern
Region) have either produced or are working to announce their
template for “restructuring”. Even some political parties, led by
the All Progressives Congress (APC), have either announced details
of their position on restructuring or made “true federalism” the
centre piece of their manifestoes for a better Nigeria. More
fundamentally, the APC promised a bolder action plan in its 2015
Manifesto: “As a change Agent, APC intend to cleanse our closet to
halt the dangerous drift of Nigeria to a failed state; with a
conscious plan for post-oil-economy in Nigeria. To achieve this
laudable programme APC government shall restructure the country,
devolve power to the units, with the best practices of federalism
and eliminate unintended paralysis of the center”. During the last
general election, several candidates ran on the platform of
‘restructuring’. The loudest agitation for “restructuring” comes
from ethno-religious-political organizations and occasionally also
some politicians. Unfortunately, the fundamental economic argument
is often beclouded by the politics of the agitation. Mutual
suspicion has crept in about ‘motives’ and the word ‘restructuring’
now means different things to different people.

Perhaps it is time to simplify or change the language. Instead
of ‘restructuring’, can we call it ‘systemic or institutional
reforms’, or ‘devolution and fiscal federalism’ or ‘Designing a new
constitution for prosperity’, etc.

It is going to be a political-legal process, with continuing
bargaining among different interest groups and the ensuing
compromises but should be guided by our history and evidence.
Useful lessons may also be learnt from other countries such as
Switzerland, United Arab Emirates, Canada, the U.S. and Brazil. We
should keep it simple but with eyes on the ball, namely: to design
relevant political-legal-governance infrastructure to ensure
security and prosperity of the 752 million Nigerians in 80 years’
time or even the most populous country in the world in the 22nd
century!

WHAT SHOULD BE DONE?

1) Create a Productive Progressive (PP) Constitution for a world
without oil.

Among other things, this would entail:

a) Political-governance arrangements that ensure participation
and ownership of the Nigerian project by all citizens of the
federation—a stable and more efficient system which promotes
fairness, equity and justice. The PP Constitution that gives
everyone a stake should orchestrate a new Nigerian
citizen/identity. A key focus would be to address those clusters of
variables in the U.S Fund for Peace Fragile States Index and which
ranks Nigeria under the Red Alert category. In 2003-4, we
identified that exiting the Financial Action Task Force (FATF) list
of non-compliant countries as well as debt relief were decisive for
rejigging the economy and we framed policies and legislation around
them. We succeeded and the economy was better for it. Similarly,
exiting the Red Alert list of the Fragile States Index is a
desideratum. Nigeria now ranks 14 while Ghana ranks 110—and little
surprise that companies are relocating to Ghana especially given
the AfCFTA.

b. Devolution of powers according to the principle of
subsidiarity and variable geometry—away from the current system of
unitary-federalism, with its choking concentration of powers and
responsibilities at the inefficient centre; thereby giving power
back to the people. Unless we assume that oil boom will rebound and
endure, devolution is a matter of survival for the FGN and the
economy. The federal government should loosen its hold on policing,
electricity (power), railways, ports, aviation, business
incorporation, vehicle and drivers licensing, taxation powers,
regulatory functions, schools, prisons, etc.

This will give impetus for a totally different economy. The FGN
can strengthen its regulatory oversight, while states may partner
with local and international corporates to deliver on these. Cross
River or Delta state, Rivers or Akwa Ibom, for example, may attract
foreign investors to develop their ports and compete between
themselves and reap bountiful revenues. Nigeria needs at least 6-
10 other cities like Lagos to emerge (for the 752 million
Nigerians) but it can’t happen without competitive federation.

In addition, the PP Constitution should define a new Fiscal
federalism that is consistent with devolution of powers and which
alters the incentives faced by economic and political actors,
thereby unleashing the competitive spirit, hard work, innovation
and efficiency which are the hallmarks of prosperous economies of
the future. Fiscal relations affect the behaviour of firms,
households and governments and hence economic activity. The local
government system should be scrapped from the Constitution.

A federation has two federating units and not three— each state
should decide on appropriate local government system for it.
Section 162 of the 1999 Constitution needs to be scrapped and
replaced with a fiscal arrangement that is consistent with
devolution of powers. We also need to abrogate the Land Use Act of
1978, the Solid Minerals Act, as well as the various Petroleum/Gas
Acts and amendments, and return the right of ownership, control and
exploitation of these assets to the federating units as proposed by
the APC Committee on restructuring led by Gov. El-Rufai. In turn,
they should pay appropriate taxes to the federal government.

Nigeria urgently needs a new Fiscal Responsibility Act to
constrain irresponsible fiscal behaviour and provide incentives to
create wealth. A new fiscal regime should ensure that never again
shall we need a wholesale bailout of state governments. For
example, fiscal transfers should be based on performance as well as
in the form of matching grants scheme (thereby replacing
unconditional transfers with conditional transfers). Another
example is that the fiscal responsibility law could constrain
governments at all levels to meet their recurrent expenditures out
of their internally generated revenues while revenue from natural
resources are deployed only for physical and human capital
development. Such fiscal responsibility Act may also constrain at
least 90% of all borrowing to be for project finance that will
repay itself. Our current structure is centred on consumption, with
an unsustainable public finance. An alternative structure would
free up resources for investment and hence growth. This will
completely alter the incentive system and power a different
trajectory for the economy.

Much of the tax powers are currently concentrated at the
National Assembly and this constrains states’ flexibility in
deploying fiscal instruments for development. For example, why
should all corporate taxes and Value Added Tax be paid into the
federation account? Wherein lies the incentive for states and local
governments to attract and promote industrialization? Personal
income tax will increasingly not be enough incentive in a future
dominated by robotics and digital economy. If the power for the
incorporation of companies is devolved to the states, perhaps some
could be creative to design tax haven status for some categories of
companies. Some countries make hundreds of millions of dollars per
annum from this kind of innovation. Our point is that the
federating units should have the flexibility to deploy corporate
taxation as a veritable instrument to attract or promote enterprise
and for independent revenues. Furthermore, why should we have
uniform salary scales across the country or even common minimum
wage? There is just too much of a unitary system which constrains
everyone to move at the same speed instead of incentivising
different segments of the society to innovate and prosper at
different speeds.

1Legal-Judicial infrastructure and Law as active instrument of
economic transformation

2In the 21st century, a prosperous economy is not sustainable
without a sound and efficient judicial system. We need a
progressive and practical new structure that can deliver justice to
the hundreds of millions of Nigerians and businesses at the
shortest possible time. As a layman, we wonder why Nigeria can’t
have state or zonal appeals and supreme courts over local and state
matters or why state election matters should go to federal courts
in a federation. The PP Constitution should provide for specialized
courts, especially commercial courts. Nigeria needs to invest
heavily on the judiciary—infrastructure with cutting edge
technology as well as continuous upgrading of knowledge/skills of
judges.

Our judiciary should be part of our brand. Let’s do what it
takes to brand Nigeria as a nation of laws. For example, London
could not have become an international financial centre without
efficient judicial system or thousands of contracts in the world
indicating London as the jurisdiction for adjudication/arbitration.
Can we at least target to be the number one legal jurisdiction in
Africa? With AfCFTA, businesses will relocate to more friendly
environments since they will have access to all African markets. As
Africa’s largest economy, we ought to have its best judiciary.
Furthermore, we need to consciously deploy law as an instrument of
socio-economic transformation by enacting relevant laws to unleash
competition and enterprise as well as progressive regulations for
the future economy. Our ministry of Justice should have a new job
description that is developmental.

3While the above might seem a heavy agenda, we can start with a
low hanging fruit namely, the APC’s minimum template. The Gov
El-Rufai’s Committee on Restructuring has several interesting
recommendations but three stand out, namely: state police,
scrapping of the local government system from the Constitution, and
resource control. The APC recommends abrogating the extant
legislations and transferring rights over minerals to the
federating units or states. With the APC Committee Report and
Manifesto, it is fair for Nigerians to ask: so, what’s holding
action? The APC at least has a Committee Report which is public
knowledge. Where is the position of PDP as the main opposition
party?

4What is suggested above is part of the foundational plan for
Nigeria’s future prosperity without oil. The contradictions of the
old, oil-based economy vis-à-vis the population and geographical
pressures are swirling and the challenge of a new institutional
framework to lead the emergence of the new economy is urgent. We
have a choice of pre-emptive, proactive action to orchestrate a new
productive (rather than sharing/consumption) structure or wait
until change is forced upon us in a most chaotic manner. A wise man
gets the umbrella ready before the rain starts. We are currently at
the cul-de-sac and need a fundamental disruptive change to reverse
the trend. A central message therefore is that systemic
restructuring is not only progressive politics but excellent
economics.

5Fix our broken politics through ideologically and
value-oriented mass participation.

6A secured and prosperous country of the future won’t drop from
the skies. Nor can we legislate politics out of public policy.
Every advanced or progressive society we see in the world today is
the product of organization, struggles and continuous contestations
for a more perfect union or society. In a democracy, there is no
other route to a better future than the instrumentality of
politics. Politics is therefore too serious to be left to those who
call themselves politicians. It is our collective destiny.

7Unfortunately, our politics is broken. It is destructive rather
than developmental. We define Nigeria’s current politics as largely
“dining table politics”— the ‘you chop I chop’, or what an author
Michela Wrong describes as “It is our turn to eat” politics.
Consequently, political parties are mere platforms to grab power—
same people, same interest—driven by crass opportunism and
primitive accumulation. It is largely about “what is in it for my
pocket” and not about “how can I contribute to leave this world a
better place than I met it”? When a minister is appointed, his
friends and ethnic or religious group shamelessly celebrate or
complain depending on whether they consider it as ‘juicy’ or ‘dry’
appointment. Yet the same people complain about corruption in
government. We have a national crisis of value dressed in
hypocrisy. We really have a long way to the future of our dream.
But a problem identified is half solved.

8For starters, we need to fix the electoral and judicial system
to ensure that only votes count and all votes are counted. This
will transfer real power back to the people, free from the
stranglehold of an opportunistic elite. With power in the hands of
the people and with the institutional reforms proposed above which
require leaders with capacity for wealth creation, then
ideas-based, cake-baking politics can emerge. The current politics
is woven around the sharing and consumption of oil rents—and you
don’t need any productive skills or to be a person of ideas to be
able to “share the money”.

9But the oil money is fast running out. Total oil income is
barely $100 per person—not enough to provide 21st century primary
and secondary education to our children. The 2019 budget of FGN (if
implemented 100%) translates to about $120 per capita— to fund debt
servicing (which is about 22%), pay salaries, run the huge
bureaucracy, schools and hospitals, police and military, maintain
embassies abroad, roads and railways, etc. The obscene cost of
governance and stealing at all levels of government is known. This
is within the context that some millions of children are out of
school, over 30% of the population are food poor, millions without
medication, water, housing, and jobs while a few politicians
display obscene lifestyles. In the U.S, the wife of the Governor of
the state of Maine (with per capita income of $47,969) in 2017 had
to take up a job in a Restaurant to augment the income of her
husband- as they wanted to save money to buy Toyota Rav4 car for
her. In Nigeria with per capita income of $1,930 and even in states
with per capita income below $1,000 per annum, you can complete the
story….! Soon or later, something will give and a totally different
politics needs to emerge to secure the future.

10Ideas-based or ideologically driven politics is the future.
Forget about the names of the parties—democratic, progressive,
liberal, etc—there are no discernible differences except the
membership, which also switches and changes every minute. A review
of the manifestoes of the political party candidates during the
last elections is troubling. Many of us still remember the four
cardinal programmes and ideologies of the five political parties of
the Second Republic but I doubt how many people can coherently
explain what their parties stand for today. For example, how can
you identify an APC or PDP state if you see one? Beyond
sloganeering, we have serious work to do. Our view is that as the
system transits from a rentier, cake-sharing regime to one of
cake-baking, citizens of conscience, regardless of ethnicity and
religion, must realign along ideological lines to offer Nigerians
real alternatives regarding the pathways to their future. Mass
participation founded on patriotism, passion and values of hard
work and integrity should drive the politics of the future. Those
who have something to offer for a better future—especially our
youths– must stand up to be counted or stop complaining. The
perverse value of some of the youths summarized by the phrase “get
rich young or die trying” is not part of the future we desire. We
must be the change we want to see. Only a vigilant and active
citizenry that holds public officers to account will secure the
future.

11CONCLUSION:

We must now conclude. Our summary message is that an alternative
glorious future – the next Nigeria for 400 or 752 million
Nigerians– is possible. It is a future without oil but powered by
our greatest asset—human capital plus technology, and which
guarantees security, prosperity and happiness. But transition to
that future requires a new foundation as it is impossible to try to
build a 100 storey-building upon the foundation of an old bungalow.
Elements of this foundation include a PP Constitution that creates
a competitive federation; devolution of powers that unbundles Abuja
and loosens its choking stranglehold on the economy; a fiscal
federalism that promotes competition, innovation and hard work; a
new judicial structure and performance that brands Nigeria as a
country of laws with the best judiciary in Africa; and a new
developmental politics with citizens power.

Of course Nigeria has a long list of problems, but adversity
comes with opportunities. With a will to overcome, the problems
should not stop us. Nor should a few thousands of miscreants –
kidnappers, terrorists, internet scammers, bandits, drug barons,
robbers, and treasury looters – define us. As we build the
foundation for the next Nigeria, we must seize the narrative and
sing a new song to rebrand Nigeria. As we bemoan the rising poverty
and unemployment, we still remind ourselves that ours is still the
largest economy in Africa and Nigeria as home to the most populous
black nation on earth. When I hear about the 77 FBI list, I
remember that Nigerians constitute the most educated and highest
earning immigrant community in the US; when I hear about the drug
barons, I remember that Alaba Market has the largest business
incubator in the world; when the news about kidnappers, bandits and
terrorists adorn the newspaper headlines, I remember the over 200
million law abiding and hard-working citizens; when I hear about
the afrophobia and the stereotyping of Nigerians in South Africa, I
recall that the richest black man and woman –Dangote and Mrs
Alakija are Nigerians, or that Tony Elumelu foundation is
empowering thousands of young African entrepreneurs or Allen
Onyema/Air Peace recently took over the job of government by
transporting hundreds of Nigerians from South Africa free of charge
or that Glo communications is owned by our own Mike Adenuga or that
the former Secretary General of the Commonwealth –Chief Emeka
Anyaoku is a Nigerian, and yes, Nigerian banks – Zenith, GTB, UBA,
Access, FBN, Union, etc have, since after banking consolidation,
become our multinational corporations all over Africa, and that
Nigerian investment banker—Adebayo Ogunlesi bought Gatwick and
other airports in the UK.

When someone remarked that Obinwannne- the famed Forbes kid
alleged scammer is from Nnewi, I quickly reminded him that Ibeto,
Innoson Motors, Chikason, Coscharis, Emeka Offor, etc are also from
the old Nnewi. When someone tells me that our youths are
underperforming, I remind her of the youths at the Ikeja Computer
village or that a young man from Anambra just invented a generator
that runs on water or the young girls from Regina Pacis secondary
school, Onitsha who won the global prize for innovation, and don’t
forget that the patent for the world fastest computer belongs to
Philip Emeagwali and that Jelani Aliyu from Sokoto designed the
Chevrolet Volt car. Or when anyone tells me that Nigerians can’t
write, I mention our Nobel Laurette Wole Soyinka, Chinua Achebe,
and yes, the new kid on the block- Chimamanda Adichie, etc. When I
hear of the looting leaders of today, I remember the visionary and
selfless leaders of yesterday—Nnamdi Azikiwe, Obafemi Awolowo,
Ahmadu Bello, M.I. Okpara, Alex Ekwueme, Shehu Shagari, Sam Mbakwe,
Aminu Kano, Balarabe Musa; Bola Ige, Lateef Jakande, Samuel
Ogbemudia, and yes, former President Obasanjo has earned his place
in Nigeria’s history as a leader and statesman, etc. Of course, we
won’t forget our footballers, athletes, musicians and Nollywood
stars—all brandishing our green, white, green flag to the world.
The list is long, and sometimes I wish that Wole Soyinka or
Chimamanda would write a bestseller entitled: “Nigeria: the Counter
Narratives”.

The point here is that for every one big challenge, there are
possibly more than ten opportunities out there. I believe that God
has blessed Nigeria with everything to be the most prosperous home
for the black race. We need to unleash the creative geniuses in our
people by designing the appropriate institutions to power a 21st
century economy without oil.

The current National Assembly can choose to do something
historic or continue to kick the can down the road, and hopefully a
future parliament will come to the rescue. We have no other country
but Nigeria and we must make it work. If God, in His infinite
wisdom, decided to put us together thus far, there must be a
reason. As Africa deepens its integration (starting with the
AfCFTA), I dream of a future United States of Africa, and possibly
with Nigeria as its California. I see our huge problems but I focus
on the solutions. The choice is ours, and I believe that if we
(together) choose to work hard at them, the next Nigeria of our
dream is possible!

-Prof. Chukwuma Charles Soludo, CFR

delivered this speech at The Platform on “Re-Designing the
Nigerian Economy with New Ideas”; The Covenant Place, Beside the
National Theatre, Iganmu; October 1, 2019.

Subscribe ToNairalaw News!