Poverty in 2021: How Nigeria swims against Kondratieff’s wave.

Ogunsakin Mustapha
16 Min Read

By Olukayode Oyeleye

THE WORLD’S ECONOMY is in a dynamic state, one that is constantly undergoing cycles determined by various national policy choices and actions. The various countries also experience continuous changes in forms of cycles of economic booms and busts, prosperity and stagnation. Every one of these experiences is either a cause or a consequence of deliberate policies, actions or inactions on the part of political leaders – a simplistic explanation on why economic realities are dependent on political decisions. This underscores the need for a constant monitoring of the economic fortunes or symptoms of crisis in individual countries as well as the entire world just as no country is an economic island and the impact of what happens in one can be felt easily in one or more other countries. The differences between capitalism and communism were all the rage and had a fair share in the causes of the Cold War, till the end of the 20th century, when the Berlin Wall fell and it was about time for the fall of the former Soviet Union. Economists of the neo-liberal mind set believed they had the right instinct, especially as Mikhail Gorbachev embraced the idea of reforms he described as ‘glasnost’ and ‘perestroika,’ which mean openness and restructuring respectively, in the years he held sway as a reformist leader of the crumbling empire called the Union of Soviet Socialist Republic (USSR).

As the world celebrated the triumph of capitalism, it transited into a unipolar world for the next decade before the new millennium and maintained that transition for roughly another decade into the new millennium. Through this period of two decades, many structural and social changes began to emerge that would redefine the global economy for many years in the foreseeable future. As the much-touted success of capitalism was being celebrated for the boom in technology and the global economy, the secular stagnation associated with deprivations suffered by those left behind began to trigger new forms of thinking. Those circumstantially deprived of the growing wealth began to resist, oppose and fight against capitalism as a system that has only succeeded in producing fewer super rich at the expense of a poor majority. Such discontents morphed into political and social movements fighting hard against a system that bred inequalities and has made the environment prone to great peril. If capitalism – despite the great acclaim – could run into such a danger, how much worse would the world have fared had it gone headlong the way of communist economic models?

Collectivism, central planning, big centre and small constituent states, command and control are systems of governance that have proved ineffectual in the circumstances of a dynamic world. Responsive government policies, particularly in a developing country, would reckon with the global reality of relatively decreasing GDP contributions of agriculture to the economy, relative to manufacturing and services. Nigeria has no competitive edge in any of the three: its agriculture is still practised predominantly on small scale, using rudimentary tools, with minimal use of technologies in all forms – whether knowledge or machines. Nigeria has undergone significant de-industrialisation over the past three decades, now heavily dependent on importation, including those of goods that could be manufactured locally. Many factories have either been turned into warehouses, religious centres, criminal gangs’ hideouts, are empty or are locked up. The service sector is stunted and undeveloped as the knowledge base required for both demand and supply sides remains puny as a result of greater impact of cultural, infrastructural, skill and knowledge constraints.

Years of official laid-back attitude and complacency because of free revenues from oil and gas have driven the Nigerian governments into official numbness and insensitivity, unmindful of the emerging global crises and possible effects of externalities on Nigeria’s economy. Governance, for the most part, has been on autopilot, driven by delusion, false optimism and poor attitude of internal governance that have little or no regard for empiricism and evidence-based policies. If the military regimes were bad, the recent democratic experiences have been worse. The past six years have been particularly pathetic, especially as the economic underpinnings of policies and political decisions have been hazy, impractical and defy logic in contemporary context. Brazil and Nigeria have about the same human population figures estimated at 211 million, with Nigeria’s latest figure already published in UNFPA’s State of the World Population 2021 report. Both countries are known to have cattle populations as well. While Brazil’s cerrado (wooded grassland) serves as an economic powerhouse supporting the production of cattle, its Nigerian equivalent, the Savannah, is not.

Brazil rears its cattle in confined spaces, but Nigerian government wants cattle to roam about freely despite being an archaic practice and the rising spate of conflicts arising from such a practice. Nigerian government officials’ repeated visits in the past four years to observe Brazil’s cattle production have not translated into any known benefit. While Brazil holds about 232 million heads of cattle and is a world leading exporter of beef, Nigeria prides itself in a ruminant population of 34.5million goats, 22.1million sheep and 13.9 million cattle. The 13.9 million cattle population, which remains largely putative and has been variously extrapolated to about 19 million as official statistic, is based on a 1992 Resource Inventory and Management Limited (RIM) survey data, the most reliable population figures currently available, with standard error margins of less than five per cent for major livestock species, generated when the population of Nigeria was still estimated at 90 million people. How sustainable and sufficient for the Nigerian cattle would be for the growing human population is something to think seriously about.

More recently, as acknowledged by the United Nations Food and Agriculture Organisation (FAO), further doubt has been cast on the validity of Nigeria’s livestock statistics by the pervasive impact of human population growth and agricultural expansion on the natural environment. This calls for realism and pragmatism rather than false and uninformed assumptions in policy response. Reliable information is the foundation of sound management and should be the basis upon which government policies are formulated and development priorities are established. Another misguided policy decision that smacks of collectivism in water resources management in Nigeria was the Water Resources Bill that has suffered setback in recent times. Vanguard newspaper, a Nigerian news media organisation, in September 2020, summarised the futile effort at legitimising the collectivism in water resources management thus: “Simply put, the Bill seeks to empower the Federal Government to control all sources of water in Nigeria.” The lack of sagacity in this decision was almost given a stamp of approval by an international organisation as the World Bank supported the water bill, under the plausible assumption that it promoted public-private partnerships in Nigeria’s water service. Local knowledge is very important in all international interventions. Those who understood some underlying subterfuge in the water bill have risen against it. Civil society groups and trade unions have mobilised against water privatisation and the bill, first introduced by the Nigerian government in 2017, was struck out for the first time by the Senate over concerns that it commercialised access to water. The second attempt by government to pass it again recently was scuttled and the bill was withdrawn over allegations that it breached the House of Representatives’ rules.

What came as a $495 million World Bank-funded irrigation project in 2014 called for “movement toward a National Water Resources Bill” as a “demonstration of borrower commitment.” But patriotic local commentators found holes in the international organisation’s involvement. In a letter to Nigeria’s President Muhammadu Buhari, Benjamin Anthony of Nigeria-based union Amalgamated Union of Public Corporations Civil Service Technical and Recreational Services Employees (AUPCTRE) and Akinbode Oluwafemi of Nigeria-based Corporate Accountability and Public Participation Africa (CAPPA) complained about the bill. “We are particularly worried about the privatisation agenda being imposed on Nigerians with accompanying draconian provisions,” they jointly wrote, adding that “the most insulting part of the whole process is that there is no room for citizens to be part of the process, from its formulation to debate. It was shrouded in secrecy. It’s unacceptable in a democracy. We all need water.” Every policy decision of government – good or bad –has a theoretical basis. Nigerian policy decisions that put the populace in a quandary are reminiscent of the ideas hypothesised by the Russian Economist, Nikolai Dmitriyevich Kondratiev (also Kondratieff) who energetically studied agricultural markets and business cycles in the 1930s.

Kondratieff became an intellectual martyr and a victim of Josef Stalin’s purges. His “crimes” against the Soviet state included his criticism of Stalin’s forced collectivisation of agricultural land and questioning the despot’s obsession with some plans that were considered impractical under the circumstances of the time. Of course, Joseph Stalin had his way, but the collectivisation policy adopted by the Soviet government, pursued most intensively between 1929 and 1933, ostensibly to transform traditional agriculture in the Soviet Union and to reduce the economic power of the kulaks (prosperous peasants) had devastating consequences. Under collectivisation the peasantry were forced to give up their individual farms and join large collective farms (kolkhozy). That led to terrible famines, especially in the Ukraine of 1933 that caused the deaths of millions of people. Kondratieff’s fear of stagnation of the economy” was justified, although he had been killed by an intolerant leader. The Russian economist was executed on Stalin’s orders in 1937 even as it turned out that his economic model accurately predicted that collectivisation of Russian agriculture would lead to a sharp decline in farm production.

Although Kondratieff’s views outlived him and Stalin his persecutor as it was resurrected and became respectable again in 1989 during the twilight days of the Soviet Union, when perestroika became popular and the reputation of the famed originator of the Kondratieff long-wave theory of economics was rehabilitated. It might therefore be helpful to re-examine and domesticate Kondratieff’s thoughts on the political economy of what led to the Ukrainian Famine of 1933 in the light of the archaic policies of open grazing, cattle grazing routes or water bill presently being promoted by the Nigerian government so as to avoid untoward consequences that could follow. Technology-based data that should rightly inform policies have taken the backseat in the recent policy decisions on the controversial cattle grazing routes, just as they also ignored the realities of urban expansion and greater demands on lands for diverse purposes other than agriculture, especially infrastructural development. That these archaic decisions are dangerous are already seen in manifestations. Food production is already hampered as people avoid farms because of insecurity, plus the impact of the lockdown on COVID-19 pandemic in 2020, coming at the peak of farming season, the effect of which is being felt now.

With no known social safety nets, no clear national strategy for emerging out of the doldrums after the 2020 lockdown, complicated with the insecurity in the countryside – driving the farmers away from farms – and the direct pronouncements from leading officials in government, food price inflation has been on the rise, while the purchasing power of more and more people is on the decline. The recent report from the World Bank has drilled a wide hole in the recent claims of President Buhari – made without any hard core statistical logic to back it up. The World Bank, disclosed that seven million people have actually been pushed further into poverty in 2020 as opposed to President Buhari’s claim on the purported 10.5 million people recently lifted out of poverty. Chief among the causes of Nigeria’s swimming against the Kondratieff’s wave is the situation with oil export. With the major oil importers turning away from Nigeria amid a plummeting of oil prices since the COVID-19 lockdown period, a country without diversified economic base is understandably in trouble as it is now. The wider ramification of Kondratieff’s long wave theory is that Nigeria is not responding well to the changes in the global economies informed by advanced telecommunications industry, improved aviation dynamics, high tech industry boom, global value chain improvement, geographical shifts in supply chain logistics, and the efforts to bridge infrastructure gaps. Nigeria cannot afford to operate in isolation. Its policies and practices need to be based on global best benchmarks. An insulated economy today is a backward economy. And that is what Nigeria’s economy presently is.

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