By Emmanuel Thomas
November 14, 2015 – Management expert and Professor of Political Economy, Dr. Pat Utomi is boiling. He is not happy about the state of Nigeria’s economy.
Although he is angry that Nigeria has squandered opportunities, he believes that greatness is around the corner only if Nigeria can summon the courage to adopt his prescription.
Utomi spoke on the subject, Reduction in cost of governance, socio-economic implications for Nigeria, as part of activities to mark the 2015 Press Week of the Lagos State Governors Office Correspondent (LAGOCO).
Need for cost reduction
Why is it important to reduce cost? You reduce cost because it translates to savings which you can use to create values, create wealth. The standard of Nigeria is deepening right now, it could have been quickly averted if Nigeria had this mindset three, four or five years ago because Nigeria earned a huge amount of revenue from oil receipt but we spent without thinking of tomorrow, thank god I was was on record for repeatedly warning that we were repeating the same mistake made in 1980, 81, 82.
Utomi’s home coming
I was coming home to Nigeria in 1980 as a PhD student and oil prices reach 40 dollars per barrel, and in Lagos, it was crazy, people were crazy, there was can beer everywhere, rich man having a party, pours Champaign in his pocket, people were washing their hands in Champaign to show that they had money.
Dire situation in 1992
By 1982, the Iranian revolution that led to that spiral in oil prices reaching 40 dollars a barrel was over. We could not sell one barrel in 2 weeks in 1982, and Nigeria went into a serious crisis. We were buying essential commodities, lining up in the streets of Lagos and we were in deep trouble which took us a few years to recover.
God brought another boom, but we failed to learn the importance of saving in boom times and we are in the mess again. Now that we have got into this mess, how are we going to manage it?
The nature of cost of governance
What is the nature of the cost of governing? To discuss the cost of governing we have to bear in mind first and foremost why government exists. If we bear in mind why government exists, then we have to look at the cost and benefit that government is involve in so that we can know how we can function in a competitive new world order. The mantra today in many development agencies like the World Bank and co is how do you get government out of the way so that progress can take place. And that is very sad, because government itself should be a stimulant of progress.
There are people who have ideological positions who say government must dominate the commanding height of economy and those who believe that private sector is the wealth creating engine of growth. It does not matter what side of the spectrum you belong to unless cost can be reined-in and you can stimulate value creation, the quality of life of the people cannot go up.
Nobel prize for Economy
There is a Professor at Kingston called Angus Deaton, I think he is this year winner of the Nobel prize in economist; he has written a brilliant book titled the great escape and the origin of inequality , why did the gap between the west and the rest come about.
Yawning gap between the West and the rest
Very important question. One of the reasons this gap has come about is that they have managed to pool savings, they have managed to raise taxes to create condition that improved the healthcare and the wellbeing of the people and when people are well and they are well educated, they can create condition that led to greater growth. But we find unfortunately that that is not happening , because the money we can use to ensure better education, better healthcare is used more frivolously in the process of “government”.
Essence of government and role of subject
So the essence of the Leviathan, that is government is essentially to harness our various talents, our various resources so that we can create a better life for all. Unfortunately power corrupts, and absolutely power, Lord Alton says, corrupts absolutely. So those who are in power, unless society can check them they will use that power in a way that will drive up the cost of governing. For instance, today we are obsessed with the fact that to be in a political position, you have to have all kinds of trappings, jeeps of all kinds, motorcades of all kinds.
Bail out
This so call bailout that has just taken place, which is actually a bail out of banks, not bailout of states, because some of those governing state don’t understand it; they thought it was a bail out of the states, so the first money that entered their pockets, I won’t mention any state, because you all know, one state governor ordered Prados, main while the essentials of running the state has not been taken care of. In the next week they would not be able to pay salaries, main while government officials have Prados.
Nigeria in the 60s and Awolowo’s magic
It was not always like that in Nigeria. In the 60s, from Lagos to Asaba, we were all called Western region.
The number of ministers Chief Awolowo had to run Western region from Asaba to Lagos is one tenth the number of commissioners that any one of the states have today and yet the Western region was run better than the way most of the states are run today.
So what is the benefit of this bigger cost of governing that we have accumulated?
We need to look at some of tradeoffs that exists in dealing with this. We have to look at one, the cost that flow from the structure of government. The tradeoffs will have to do with eg, Unitary Government vs Federal Government, there are cost implication, Parliamentary vs Presidential.
Presidential system unsustainable
As you all know, the Presidential system is much more expensive. I believe in the federal system, but I believe in the parliamentary form and if I have my way, a prime minister will be back in Nigeria in the system the way we had it in 1960, it is best for Nigeria. It better to get the most capable people in government.
Cost of running for elections.
Just out of these three Presidential System compared with the Parliament where you just go to the people who know you in your small constituency who want the best people for themselves and not somebody who goes around collecting money to get himself elected as president. The cost of bicameral vs unicameral, bi-camera with two tears, Senate and House of Representative vs unicameral with just one house.
The US example and Citizens Legislature
In fact, in the United States as rich it is, most of the state government are not only unicameral but are citizens legislature. Citizen legislature in the sense that they are not full time parliamentarians, they have their jobs as shoemakers, as farmers and they will spend a couple of days, every months making laws for the governing of the state.
The case of Texas
Even in a state as rich as Texas, they don’t convey the state assembly so frequently. And this is a significant cost savings. And you look at a country as ours, where really there is a significant question about the contribution of the legislature, even though it is important, if you look at so called check and balances of the realms, judiciary, legislature and executive and some like to add appropriately the fourth estate of the realm, which is the Press, the media. If you try to justify the cost of our national assembly, what is happening is the worst cost.
What Nigeria needs
We do not need the kind of cost that we use in running our national assembly. I have been arguing repeatedly since 1999, that what Nigeria needs is citizens legislature at even the federal level. We are not ready yet, They do not do enough to justify what they cost the Nigerian people. But because there are vested interest, they will fight any attempt to suggest a citizen legislature.
