EVERYTHING IS JUST JAGAJAGA 15052006

It may not be necessary to commission a formal research or survey to determine the current condition or the quality of life of the ordinary Nigerian, who constitute the bedrock of our dear country.  The abject state of poverty in the land has also been endorsed by several international agencies, whose research have concluded that our people rank amongst the poorest in the world with increasingly difficult access to such basics as water, food and shelter.  Nonetheless, a small group of Nigerians in the political class and their cohorts of commercial buccaneers, particularly in the banking and oil industries, who have enjoyed easy access to our nation’s treasury would swear that Nigerians have never had it so good and label any dissenting party as ingrates and spoilsports and would quickly reel off the advent of Global System for Mobile Communication (GSM), privatization of public enterprises and bank consolidation as indisputable gains.  Needless it is to remind these beneficiaries of government patronage that the touted successes have not been able to impact positively on the lives of majority of Nigerians.  Truly, the GSM has served to improve communications but some people have rightly asked “at what cost?”   

Curiously enough, it is apparent that apart from government’s ability to conduct an auction and rake in $250m dollar from each operator, the government has done nothing else to provide the supporting infrastructure for the efficient operation of GSM services in Nigeria!  Inevitably, the operators have imported almost every component at great cost to our external balance of payments position.  There is no available statistic on the number of masts which have circumscribed our landscape, but it is common knowledge that every mast has to be supported by a dedicated generator, and with every GSM operator constructing its own mast, the volume of generators required throughout the country would be in multiples of a thousand at a cost of many billions of naira!  Needless to say, the demand for diesel by these generators has helped to increase and sustain our importation and the foreign exchange spent for fuel at unusually high levels!

Furthermore, the total absence of any proactive legislation or direction to stimulate local production of GSM related components such as handsets, recharge cards etc as collateral for GSM licences in Nigeria further increased our foreign spending, such that the published information by the CBN on monthly forex usage clearly indicate that the GSM operators enjoy pole positions!  The lack of focus of our authorities in this regard has been a great disservice to our light engineering, plastics, papers and printing industries.  The market claims of GSM operators suggest that the over 10 million current subscribers may have purchased up to 20 million handsets in the last three years or so, at an average unit cost of about $100 for each handset; in this manner, Nigerians may have spent well over $2bn for handsets alone and provided employment for workers in other countries while ignoring the huge problem of unemployment at home.  On a personal level, some Nigerians hold the opinion that the cost of talking with GSM may have upturned individual household monthly expenses profile with serious consequences for the diet and value system of our compatriots.  

It is, for example, not uncommon to find a driver, who earns about N20,000 a month with a handset for which he requires up to N3000 per month (almost 20% of his salary) to buy recharge cards to retain a line; meanwhile, same driver probably pays about N1,000 for a one-room apartment where he lives with a wife and two or more children, who have to be fed, clothed and schooled! The net result of this obvious financial constraint is a motivation to top up his income by hook or by crook at the expense of his employer!  Yes, cost of talking on GSM has come down but the ratio of cost to income level is probably higher in Nigeria than in most other countries.  We must also recognize that the advent of GSM has increased the incidence of petty theft throughout the country and quite a few lives have been lost to GSM hoodlums while the claim of jobs provided to recharge hawkers on our streets has been described in reality by some observers as disguised unemployment!  Meanwhile, the GSM operators continue to laugh to their banks with staggering profit declarations which are second to none in Africa and beyond.

Now, let us take a closer look at the impact of the privatization of public enterprises on the lives of Nigerians.  No doubt, most of the publicly owned companies became bankrupt not because of the market viability of the enterprises but more as a result of massive corruption and lack of adherence to simple but basic commercial principles, particularly accountability.  For example, critical executive officers were appointed arbitrarily and merit and ability were often sacrificed on the   altar of political and ethnic expediency and it was not surprising that the accounts of these public corporations were never submitted to any serious scrutiny or audit!  The recourse to privatization, even though based on the prodding of the IMF and other such international agencies, may have brought an end to the looting party, and consequently reduced resource wastage and conserve scarce revenue; but some Nigerians are of the opinion that our patrimonies were sold for 10% of the cost of establishment or for amounts grossly below realistic valuation at current prices especially in view of the colossal sums, in some cases, in excess of billions of dollars expended in setting them up; Nigeria Airways, the steel mills at Aladja and Ajaokuta readily come to mind  in this regard.

Again, it is curious that instead of dealing with the root causes of the failure of these public corporations, i.e. massive corruption, the government in its wisdom decided to throw away the baby with the bathwater!  Some analyst argue that if all areas in which public corruption existed were to be privatized, then we may end up with no schools, no universities, no hospitals, no ministries, no parastals, no NNPC and by extension no government, and so long as corruption continues to exist in such ramification in the body polity of our country, even the already privatized corporations will operate in a polluted environment and may never compare favourably with their counterparts in more decent societies and Nigerians will remain the obvious losers!  

Well, as for the gains of our well trumpeted economic reforms, our views in this column are well known; the banking consolidation has thrown up 24 banks whose joint capital base does not equal the second largest bank in South Africa!  The main parameters for evaluating a progressive economy remain unfavourable; for example, commercial interest rates still exceed 20%, unemployment remains at its highest level ever, our exchange rate remains resistant to increasingly exploding foreign reserves, capacity utilization remains below 50%, power supply remains disastrously epileptic and salaried income in all sectors except oil and banking remain below that which can sustain any dignity in the lives of the majority of our countrymen!  Worse still, government sponsored education at all levels now produce quarter-baked graduates and social miscreants!

Now in addition to the above gruesome scenario (as if things were not bad enough), we are about to sacrifice whatever gains we have made on the political arena on the altar of sycophancy; greed and public deceit, all synonyms for the cankerworm spelt: CORRUPTION!