Why we are like this

A few weeks ago on his podcast, Gege asked me why Nigerians are wedded to bad economic ideas and are opposed to sound economic policy such as letting the naira go.

The truth is, we have been this way for almost 50 years, and I think it’s because we have a complex that doesn’t allow us to take a stand. Back in the early 1970s when Nigeria was flush with oil boom cash, it was the height of the Cold War, but we chose to be very centrist and did not do it with too much sense. In that period, we sent students for further education to both Western and Communist countries. Unfortunately for us, the West tended to absorb the students who studied there. Think people like Ilesanmi Adesida, Ngozi Okonjo, and you’ll get my drift. Some of them did come back, but too few to challenge the opposition who returned en masse from the Soviet Union and other Eastern bloc states armed with bad economic ideas.

You see, Socialism is a lot different from the brand of Communism, which is also different from the Bolshevism or Stalinism that was practised in Soviet Russia. Unfortunately for us, these students returned with these bad ideas and went into our university system in large numbers. To make things worse, they returned at a time of commodities boom when their ideas could be implemented by dictatorial governments that sought to control everything, so a wave of nationalisation was happening.

These Soviet ideas fused with the belief that the government’s job was to be a nanny essentially taking care of everyone and everything, and thus Nigeria’s feeding bottle federalism was born. Add to this the fact that our society is very adverse to change. Once a Nigerian believes something with all his heart, it is incredibly difficult, even in the face of evidence, to get him to change his mind.

Think of the petrol subsidy, think of the free float of the naira. Forget all the promises about the removal of the petrol subsidy, the Buhari government is not going to remove it. Forget about floating the naira, most Nigerians are convinced that a “strong naira is a sign of a healthy economy.” The naira own rankles particularly because we were in a Petri dish for it since 2014. After the commodity price collapse of 2014, Egypt and (hear this) Russia, let go of their currency pegs. Nigeria and Turkey did not. Seven years later and the results are in. Egypt and Russia are not fully out of the woods, but they are in a much better place than either Nigeria or Turkey, both of whom are facing hyperinflation and currency collapse. No, I will not talk about the subsidy.

This is one of the reasons why, despite the mountain of evidence that has gathered over the last three decades that government should not be in the business of running business and we are the worse off for it, so many Nigerians remain bonded to things such as “our national cake”.