The Review of African Political Economy - examining the politics of imperialism;
development; agrarian, popular and democratic struggles; class, gender and social justice
T Abdulraheem, A Olukoshi, A R Mustapha and G P Williams
Since our last special issue on Nigeria, ROAPE, No. 13, numerous changes have taken place within the Nigerian political economy. Of particular importance are the collapse of the OPEC oil pricing structure and the huge increase in the indebtedness of the country. Nigeria is particularly susceptible to pressures emanating from the price collapse, because of its large population and its expensive development plans. But as Okogu argues in this issue, the good old days of the oil bonanza appear to be over for good. The question is not when the oil market will pick up again, but what alternative, source or sources of revenue will augment diminishing resources from oil as the basis of the fiscal structures of the Nigerian State. That this calls for a major rethinking of the development strategy is not in doubt. What is not often emphasised, however, is that new approaches to development strategy cannot be neutral, in a society deeply divided along class and other lines. Neither can the state be seen as an independent arbiter, making rational choices between different proposals put forward. Thus, the intimate connection between the intensification of the crises of the political economy, and the political question, is one of the major themes of this issue.
Closely related to the collapse of the oil market, is the question of indebtedness, with its connected questions of debt servicing, availability of letters of credits from foreign financial institutions and the debate over the IMF. While the immediate origins of the debt can be traced to the unparalleled profligacy of the civilian governments between 1979 and 1983, it should not be forgotten that structural issues, such as the import-substitution industrialisation strategy of the country, and its heavy reliance on imported inputs, also contributed in no small measure in bringing the country to her knees financially. Whatever weight we may ascribe to different contributory factors that engendered the huge debt, which might be as high as US $23 billion, there can hardly be any disagreement on the painful consequences of the financial predicament for the countries, especially for her working peoples.
The nationalist zeal with which the Buhari/ldiagbon regime pursued the debt repayment problem, meant the adoption of a 'nationalist, lets use our internal resources' approach, which saw the debt service ratio well above 40%, with promises of further increases to come. The hardship wrought on the Nigerian people by that strategy was immense and it is not surprising that the high debt servicing ratio was one of the issues raised in justifying the Babangida palace coup against the two Generals.
Though the Babangida regime has indicated that it would not spend more than 30% of its foreign earnings on debt servicing, the dislocations and problems caused by the debt crisis are yet to diminish. Of particular importance is the refusal of some western financial institutions to extend letters of credits to cover necessary imports of raw materials needed by Nigerian industries. Consequently, under-utilisation of installed capacity in industry, and inflation, continue to haunt the society. The oil and debt crises have brought to the fore, the questions of the value of the Naira, the mechanisms for import controls, the basis for the allocation of foreign exchange, and the question of near-permanent border closures. During the oil-boom years of the 1970s, the Naira appreciated considerably against other major currencies of international trade. This development was connected to the desires of the urban-based bourgeoisie and managerial classes who ran the economy to import goods and services from the capitalist West, in order to maintain a high level of profitability, and an equally high-spending life-style. An over-valued Naira also made it easier to import foreign food, largely wheat, rice, and day-old chicks, to feed a growing urban population in the face of an intensifying food crisis caused primarily by the neglect and sometimes, even disruption of peasant agriculture.
But how is the value of the Naira to be brought into line with economic realities? And what social and economic consequences will follow from such a move?
A related problem is that of import and exchange controls. Since the early 1960s, both mechanisms have been used in the management of the country's balance of payment position. After a spate of free spending and liberal import and exchange controls which characterised the latter part of the Gowon regime, the Obasanjo regime in the late 1970s, faced with the first signs of the current economic crises, imposed 'low-profile' austerity measures and tightened both import and exchange controls. With the coming of the Shagari regime 1979, the controls were eased again given the favourable oil market climate following on the Iranian Revolution. This attitude by the Shagari regime towards import and exchange controls was one of the high points of its profligacy as unnecessary consumer goods were allowed to flood the economy. With the Buhari/ldiagbon regime, the whole mechanisms of import and exchange control was tightened again, with the regime going as far as closing the country's borders for months.
These up and down movements in import and exchange control management have meant that the industrial and economic climate was characterised by a high degree of uncertainty, with most people living in fear or anticipation of budget speeches. Secondly, it has also meant a high degree of bureaucratisation, favouritism and inefficiency. The problem of the most efficient way of managing scarce foreign exchange resources is, thus, one of the crucial problems of the Nigerian fiscal crisis.
All these contentious issues found expression in the debate over the IMF loan, inaugurated by the Babangida regime in late 1985 under sustained public pressure. In the course of the debate, however, it became clear that Nigerian public opinion was heavily against the conditionalities which the Fund had handed down to Nigerian governments since 1983. Particularly resented were the conditionalities requiring a massive 60% devaluation of the Naira, removal of petroleum subsidies, and import liberalisation. Different groups and individuals took part in the heated debates, often forming a bewildering mosaic of contradictory interests as bedfellows, either for or against the taking of the loan.
Opposed to accepting the loan were trade unions, students' unions, and a large section of the intelligentsia. Their camp also boosted a few religious organisations and some indigenous businessmen, who were resentful of the Buhari/ldiagbon concentration of business opportunities in the hands of 'efficient' and largely foreign-owned businesses. The IMF loan was perceived by this business group as a further entrenchment of foreign domination, hence their advocacy of a nationalist' solution, which would enhance their chances in the economy. This rejectionist bloc even included some top bureaucrats and bankers fervour.
For the IMF loan were, predictably, the leaders of multinational companies, top bank officials, government ministers in the Babangida administration, and top journalists and academics.
The debate that ensued caught the imagination of the public and in the final analysis, the government was obliged to announce that if was rejecting the loan in favour of an internal solution to the crisis. However, it would seem that all the government is doing, is the implementation of the rejected IMF conditionalities, but now under a nationalist garb.
Subsidies on petroleum products have been removed, continuing a process started in the last days of the Shargari administration, and escalating transport and food prices. Then there is the abolition of state-run commodity boards in the agricultural sector, to be replaced by private companies, which, it is alleged in some quarters, might turn out to be avenues for directing the country's meagre foreign currency earnings into private hands. A similar programme of privatising other government parastatals is currently being worked out with some parastatals already slated for floatation on the Stock Exchange.
However, the most contentious economic decision taken to date, since the declaration of an economic state of emergency in October 1985, is that relating to the establishment of a second-tier foreign exchange market, SFEM. The idea is to maintain the current sliding value of the Naira for the servicing of the foreign debt, and the payment of the country's obligations to international organisations., that being the first-tier. All else is to be serviced through the second-tier, with the Naira being allowed to float, and find its level according to the dictates of supply and demand. And the government is currently negotiating a World Bank loan to enable it service the SFEM within two years. What this means in effect, of course, is a massive and, continuous devaluation of the Naira.
The policy of allowing the Naira to slide gradually against other currencies can only be understood within the government's ideology of monetarism. What is open to question is whether the SFEM will, or even could, achieve its objective of easing the present scarcity of foreign exchange since it cannot address the central problem of foreign exchange shortage, that Nigeria does not earn enough from current exports to pay for essential imports. If the government continues to licence imports, bureaucratic distortions and corrupt allocations will continue. The proposed transfer of control and allocation of foreign exchange to the rapidly multiplying number of commercial banks under the supervision of the Central Bank is not likely to eliminate these bottlenecks. Indeed, it may simply amount to the semi-privatisation of foreign exchange allocation process through a shift of direct control from state officials to private financiers and with it, a shift in the source of bureaucratic distortions and corruption, Profit-making in Nigeria has always been most lucrative for those able to manipulate export and import markets, whether through the cartels operated by foreign trading companies in the colonial period, or through access to state decision-makers in recent years. Powerful interests with privileged sources of information, may be able to manipulate the foreign exchange auctions and corner the market. Critical sectors of the economy, such as health services, educational institutions and manufacturing firms may find themselves unable to afford essential imports.
Some of these apprehensions are clearly discernible in the on-going political debate also inaugurated by the Babangida administration, and bring out clearly, the intimate connection between the economic crises and the political question in the current Nigerian debacle. As Ibrahim points out in this issue, the current climate in Nigeria can hardly be said to be conclusive to a democratic debate on the country's future. And this authoritarian tendency in the county also finds expression in some of the proposals put forward, such as the argument for a one-party state, or a triachy, made up of an alliance of the military, civilians, and traditional rulers. It is his major argument that the commitment to bourgeois-democratic liberal philosophy, which informed the debate over the 1979 Constitution, has been greatly reduced. The emphasis now is control rather than mobilization, and the source of this orientation in the economic crises is brought out by an editorial in the influential New Nigerian on 29 July 1986, which sought to defend the preventive detention decree of the military; 'there is no country which has faced certain drastic problems or drastic times that has not resorted to drastic solutions. And no one can deny that these are extraordinary times'. (29.7.86). The situation if further compounded by the fact that the Babangida regime has been taking far-reaching political and economic decisions which tend to pre-empt the report of the Political Bureau it set up to conduct the debate on the country's political future. The impression is thus created that the Political Bureau is a mere talk-shop, diverting attention from the unfolding unfavourable economic and political climate in the country. This might explain the Lukewarm attitude of the generality of Nigerians to the political debate.
In the final analysis, the struggle between authoritarianism and democracy is firmly on the agenda in Nigeria. As Bangura points out in this issue, the classes that dominate the state have been in search of a political arrangement which will guarantee them maximum control through increasingly coercive state policies, also aimed at weakening the capacity of popular organisations to resist obnoxious policies. It is further argued that this repressive strand also gave rise to intra-class squabbles and intrigues, culminating in the Babangida palace coup of 1985, and the subsequent adoption of a populist stance, premised on a 'human rights' policy. This stance is only the beginnings of an attempt to evolve a corporalist state in which the trade unions, students unions and other organisations are tied to the apron-strings of the regime. We are left to ponder whether a corporatist state can be an answer to the serious crisis of legitimacy which confronts the Nigerian state.
However, as Beckman points out in an accompanying piece in this issue, the vexing questions of strategy, legitimacy, and hegemony are not limited to the ruling class alone, for within the popular organisations in the country, and the Left tendencies, there are advocates of using the military as a Vanguard for the revolution. The advocacy of a military vanguard, is partly a reflection of a feeling of impotence and impatience; and also an indication of a lack of understanding of the role of the military under neo-colonialism in general, and the specific and peculiar case of Nigeria in particular.
As Abdulraheem and Olukoshi further point out, this military vanguardist position is only another specific example of an entrist orientation which has marked the Nigerian Left tendencies since the 1940s. It would seem that the basic strategic orientation of the left tendencies is to enter bourgeois, petty-bourgeois, or state political formation with the hope of carrying out a revolution from within, using state institutions or bourgeois organisational formations. The fact that this strategic orientation has led to a string of disasters for the Left is clearly brought out by the two authors. It is their view that there is a need for a new organisational and strategic orientation within the Left if they are to effectively intervene in the unfolding economic and political crises in the country.
Mustapha looks at some of the problems the left tendencies need to overcome before they can engage in a more effective intervention in the political process. Central to his argument is the need for a correct handling of the National Question. Specifically, he calls to question the theory of the Northern Oligarchy, which argues that the hegemonic and most dangerous segment of the Nigerian ruling classes, is the Northern Oligarchy, defined by blood ties, semi-feudal connections, and origins in the Native Authority system established by colonialism. This orientation, it is argued, misses the more important point that the northern faction of the Nigerian ruling class developed as a bureaucratic bourgeoisie, within a specific regional and political context, which differentiates it and some of it's interests from the rest of the bourgeoisie, of which, it is essentially a part.
This failure to see both the differences and similarities of different factions of the bourgeoisie as progressive, and the northern one as 'feudal' and reactionary. It is thus argued that the theory of the Northern Oligarchy has led to a situation whereby the political and ideological forces of some northern left tendencies and the southern bourgeoisie converge around a reformist and pragmatic electoral platform. That this is a non-viable road for left politics is brought out by Abdulraheem and Olukoshi.
Our last special issue on Nigeria was characterised by the picture of a political economy marked by an oil-boom, and expanding economy, and a possible promise of the evolution of a democratic political process. In this issue, the background is set by a catastrophic collapse in oil prices, a debt crisis, and a general economic crisis which has taken a great toll in the country, and promises to do yet more damage. Such is the context of the contest between authoritarianism and democracy in Nigeria, as exemplified by current attempts to disorganise and weaken the NLC, ASUU, and NANS, following the nation-wide students crisis of May/June 1986 (see Briefing in ROAPE 36 and in this issue); a contest between the forces of imperialism, represented especially by the IMF and the local bourgeoisie, and the working peoples of the country, and their patriotic allies. It remains to be seen how this contest is resolved in the years to come. The outcome, no doubt, will have far-reaching repercussions both within and outside Nigeria.
T Abdulraheem, A Olukoshi, A R Mustapha, G P Williams