On Thursday, August 8, 2024, I discussed four country case studies on economic reforms on social media-Singapore, India, China and Britain under various leaders-Lee Kwan Yew in Singapore, multiple Indian leaders, including Indira and Rajiv Ghandi, Manmohan Singh and Narasimha Rao, Deng Xiaoping of China, and Britain’s Margaret Thatcher. The broad theme of my exposition was to suggest, based on the evidence, that the road to successful economic reforms may be long and often painful and to call for leadership dedication and popular endurance as we sustain the journey.

The full text of that post is reproduced hereunder:-

“Let me make some comments on economic reforms. I teach a business environment course that focuses on the economic, political, and social environment of business. These days, we also include legal/regulatory, technology, and global environments as well.

A critical and illuminating part of the course content is country studies and policy comparisons. Four country studies have made an everlasting impact on me over the years- the reforms of Deng Xioping in China from 1978; Lee Kuan Yew in Singapore from 1965, the Indian reforms under various leaders from the 1990s and Margaret Thatcher’s reforms in Britain.

None of these reforms were easy. None lasted just one year. Many of them were accompanied by quite some pain, but in all cases, they were very successful. The success we see today in all these places was the outcome of these processes of reforms being executed with discipline and endurance.

In China, millions had died in famines and the cultural revolution under Mao’s communism, and communism had failed in economic terms, so the Chinese populace had no alternative but to embrace Deng’s reforms which he called “socialist market economy”.

In Singapore, the country looked like a doomed nation. No natural resources, no visible economic potential, and no global strategic importance. Even the leaders of Singapore, including Lee Kuan Yew, assumed the country could not survive on its own economically and sought a federation with Malaysia! Malaysia rejected Singapore regarding it as a liability!!! Only then did Lee Kuan Yew, after weeping, accept the challenge of leading his people to development. And see how, after three decades of hard work, he has succeeded.

In India, the country had been derided as a country with “the Hindu rate of growth” by the West, not more than 2% or so under its socialist economic policies. When Rajiv Ghandi and Narasimha Rao commenced reforms. Ghandi paid with his life. The voters changed from party to party, but whichever party they turned to, India’s elite had arrived at a consensus in favour of the same reforms, MORE OR LESS THE SAME REFORMS WE ARE ATTEMPTING TO CARRY OUT! Indeed, in all four countries I’m discussing, the reforms were very similar to each other and to what we are trying to do!

My last case study is Thatcher’s reforms in the UK, such as privatising the inefficient and loss-making British Airways, British Telecomms, the rail system, and the mines and embracing a competitive market economy. Thatcher’s reforms are still the structural pillars of the British economy until today. Those reforms were painful, and there were protests, but the people and their leader endured, and Britain has been better for it. Do you remember the mine workers’ strikes led by Arthur Scargill?

Reforms are not a cup of tea, and they don’t succeed in 1 or 2 years, especially in our case, where we have allowed the rot to go so deep!!! There are mistakes that may have been made and enhancements that can and should be done, but if we endure and succeed, it will be for our good. Leadership is critical, but if we retreat from the difficult road, we will have suffered for nothing.

OPEYEMI AGBAJE August 8, 2024”

I received tonnes of feedback, understandably, and I must say I appreciate all those who responded in good faith to the post and engaged me in hopefully fruitful conversations for our country’s transformation. Our objective is altruistic and the goal has to be making a worthwhile change in Nigeria’s fortunes. I must say upfront that there was nothing surprising or unexpected in most of the contributions from numerous quarters-many of the comments were opinions I had myself canvassed in public and private conversations with various audiences and stakeholders about how we could enhance current economic reforms and guarantee their success and sustainability.

The major theme that ran through most of the responses was, as is to be expected, around the issues of leadership and corruption. Some may have defined leadership narrowly in the persons of the current and past presidents, while others expressed it as a leadership class, but most commentators called for leadership example and sacrifice. They believed that difficult reforms could not succeed if the populace perceived that senior government officials in the executive, legislature and judiciary were insulated from the pains they were being requested to bear. Many respondents complained about the level of corruption in Nigeria and argued that by comparison, my comparator countries enjoyed sterling leadership as they traversed their economic reforms. Related to the issues of leadership and corruption were vigorous concerns about the cost of governance, which they aver, contradicts the essence and spirit of reforms.

Some feedback focused on specific characteristics of several of these countries, which in their opinion, may have facilitated the success of reforms, for example Chinese authoritarian rule by the Communist Party, which though embracing market reforms in its economy, retained its political dictatorship; or Lee Kwan Yew’s autocratic, but democratic leadership style in Singapore. This again raises the vexed issue of whether difficult economic reforms may be accomplished in democratic settings. On the other hand, both Britain and India were democracies, yet their leaders successfully transformed those countries. Some of my correspondents advocated for rebuilding values and institutions, rebuilding trust in government (which is related to leadership and corruption), complementary political and constitutional reforms in the direction of federalism, and an elite consensus, suggestions with which I identify.

Some concerns were ideological-that the country was pursuing a “neo-liberal” reform strategy inspired by the “Bretton Woods” institutions and queried the track records of similar reforms in other countries and by previous Nigerian leaders. These classes of respondents seek an “alternative” to market-based reforms without, of course, specifying which alternative! For several respondents, I could perceive, as we have seen since last year, that their grievances are anchored in the presidential elections in 2023, whether or not they were explicit about that, and this group remain unhappy about the outcome of the elections, and will rejoice if reforms flounder or fail! There were also responses from scoundrels and hustlers who imagine that everyone is like them, and who assume one must have been induced to engage in such advocacy. That category deserves to be pitied and ignored!

I did enjoy responding to many of these good faith feedback, all of which I consider, valid perspectives. The question I, however, perennially ask myself, and I did ask my conservationists, was, “What implications do you suggest Nigeria draw from these objections? Are the criticisms of reforms and the leadership implementing them designed to suggest that the country is doomed to poverty, underdevelopment and crises? Should we suspend, defer or avoid economic reforms until the ideal conditions are in place?” There is a specific example I want to call attention to that Illustrates why this thinking may be unhelpful or even destructive-when former President Jonathan attempted to remove fuel subsidies in 2012 (at a time when it was a much smaller problem exchange rates were N148/$ and the total cost of those subsidies, inclusive of corruption was N2.3Trillion in 2011!!!), Nigerians rejected the reform because of the same complaints about leadership, corruption and cost of governance! Twelve years later, the country is near bankruptcy and the exchange rate is N1,600/$!!! I must put on record the fact that I was alone amongst many Nigerians, and surprisingly even economists and the policy community in supporting Jonathan’s effort in that regard. My views on policy are neither partisan nor political and irrespective of who is in power, my views on national economic policy have been consistent. My sense is that we must sustain reforms as we continue to seek improvements.

None of the four countries I discussed had saints in power over the relevant period. I regard Lee Kwan Yew, Margaret Thatcher and Deng Xiaoping as transformational leaders, but they were no saints-Yew was vilified in the Western world for years for authoritarianism and the police state; Thatcher was called the “milk snatcher” over social policy, endured crippling strikes including even hunger strikes from mine workers and labour generally, was hated by the media and the left, accused of crony-capitalism in favour of members of her family, and was ultimately upstaged through a revolt within her own party; Deng’s China was full of political intrigue and draconian rulership culminating in the massacre of protesters seeking expanded freedoms in Tiananmen Square! India had high levels of institutionalised corruption, and the Ghandis and their successors were certainly no saints. India’s bureaucracy, the so-called “license Raj” was comparable to Nigeria in terms of corruption; the country (and China) had high levels of poverty; its political system was riotous and volatile.

Beyond these countries, South Korea, Malaysia, Indonesia and Brazil have all progressed in the context of significant challenges with corruption, but over time the issue was progressively assuaged. Indeed, South Korea subsequently jailed some of the leaders who transformed the country for corruption. I say these things not to condone or justify Nigeria’s minuses (I have criticised them on record as much if not more than most Nigerians) but to caution against romanticising these countries’ economic journey and success. While we must advocate, and more importantly, organise, for transformational leadership, eradicating corruption and a more efficient government, we must not delude ourselves into thinking other nations had an easy journey to economic success. I believe that economic reforms are a process, and as economic reforms progress, corruption becomes unsustainable and intolerable.

As for those focused on ideology and prone to an instinctive rejection of “neo-liberal, Bretton Woods reforms”, my only advice is that they offer specific policy recommendations to address Nigeria’s economic challenges. How do you propose to deal with Nigeria’s fuel subsidy conundrum? How will you resolve our foreign currency supply dynamics and manage our exchange rate? How will you achieve the huge investments required regarding our infrastructure and services? How will you raise government revenues and diversify our exports? How will you remedy our people’s poverty, unemployment, illiteracy and misery? Simply saying “neo-liberal” or “Bretton Woods” is not a policy prescription. By the way, China tried an alternative to markets, as did the Soviet Union, North Korea, Tanzania, Cambodia and Vietnam, amongst others. We may examine the evidence in relation to their outcomes! The four countries I discuss, as well as Nigeria, had extensive experience with state ownership and the so-called “mixed economy” before embracing market reforms. I remain also a strong advocate of strong investment in the social sector-public education and health, mass transportation, social safety nets and public services-in effect, a pragmatic adoption of markets to drive the economy, and social investments to empower people.

I find it strange that people would argue, with a straight face, for an alternative to market reforms right after Buhari’s eight years! What do you think Buhari and Emefiele were doing for almost a decade? They were, of course, avoiding market reforms and trying every alternative they could think of. See where that landed us! Before the civilian Buhari, other leaders have tread similar paths-General Obasanjo and his military colleagues implemented “low profile” and “Operation Feed the Nation” once they saw economic problems on the horizon. These were attempts to address the issues of “cost of governance” and domestic agricultural production. Shagari renamed these two policies “austerity measures” and “green revolution”! To manage our by-then precarious FX situation, Shagari did not implement “neo-liberal” approaches but “import licensing”, which became a massively corrupt strategy for allocating scarce foreign currency (just like Emefiele’s discretionary allocations!); Generals Buhari and Idiagbon rather than discuss with our creditors got us to patriotically queue for “essential commodities” and implemented “counter-trade” (a nice name for trade-by-barter!) to avoid markets, but that too was a massive scandal and fraud! The notion that we have not sought or implemented alternatives to market reforms is untrue, and the record of these alternative strategies has been woeful!

In relation to the question of leadership, I hope that Nigerians will vote for the kind of leadership they desire the next time we have an opportunity for democratic elections. Becoming subversive and unpatriotic is not a responsible option! In spite of India’s political volatility, Hindu-Muslim riots, and assassinations of Indira Ghandi and Rajiv Ghandi, the country has not experienced a military coup! Last week, disgruntled Nigerian politicians induced ignorant youths and children to carry Russian flags and openly call for a military intervention!

All said, I think these conversations are good for Nigeria’s development. Let us engage with leadership, the policy environment, economic reforms and governance and let’s raise our voices, in good faith in favour of changes which we desire. My personal commentary on President Tinubu’s reforms, often in public, is consistent. While I agree with the strategic direction, I have concerns about tactics (timing, sequencing, people etc.) and execution. I share the popular concern that signalling from the top must offer an example for the citizenry to follow. I believe social investments to improve education, skills development, empower the poor and vulnerable, and ameliorate the pains of reforms deserve greater attention and urgency, and I support a pragmatic strategy for managing the exchange rate around a target band. I have also advocated stronger and more empathic communication, and a faster and more efficient execution of reform initiatives. May Nigeria succeed.