FROM POVERTY TO
PROSPERITY: THE ROLE OF LABOUR[1]
By
Femi Aborisade
Labour Consultant and
Attorney-At-Law
aborisadefemi@gmail.com
Outline
1.
Definition of concepts:
·
Poverty,
and
·
Prosperity
2.
Why do we have a rich country with
majority of the population poor?
·
Economic
system
·
Political
system
·
Historical
factor
3.
The role of labour in transiting
from poverty to prosperity.
4.
Conclusion
1.
DEFINITION OF CONCEPTS
1.1
Definition of prosperity
1.1.1 Prosperity as wealth
In common
parlance, prosperity denotes material wealth. This is also the impression one
gets from dictionary meanings of the term:
·
Wealth
·
Affluence
·
Opulence
·
Riches
·
Success
·
Assets
·
Fortune
·
Capital
·
Means
In a state
of prolonged economic hardship, pervasive poverty and widespread unemployment,
it is understandable the commonest thing that most people would associate with
prosperity is being financially rich - having enough money with which to attain
their life’s desires and aspirations, such as building houses, feeding and
financing the children’s education, attending to their health, and so on.
1.1.2 PROSPERITY IN A BROADER PERSPECTIVE
However,
scholars have opined that though the term ‘prosperity’ partly includes having
wealth, it is broader than wealth. Rather than simply being a state of having wealth, it actually means a
desirable state of being, or
desirable quality of existence.
A society is thus considered prosperous only if it is organised to ensure
that:
·
each of its members is
able to achieve his or her aspirations, and
·
members can collectively
and genuinely participate in determining the conditions of their existence –
taking fundamental economic and political decisions on matters that affect
them.
1.1.3 THREE INTRINSICALLY INTERCONNECTED DIMENSIONS OF PROSPERITY
It has been
opined by scholars[2]
that three intrinsically
interconnected dimensions are necessary for an individually and collectively prosperous
life, in the sense of ‘emancipation
of being':
·
the biological,
environmental, and material dimension (a
healthy physical life);
·
the cultural dimension (a good life, suggesting or inclusive of
social prosperity); and
·
the political dimension
(a just life, inclusive of
collective participation in decision making).
A state of prosperity thus signifies the 'capacity to lead a fulfilling life on
each of the above levels, conceived as intrinsically complementary.
It is within the broader
understanding of ‘prosperity’ that the GDP is being jettisoned as a measure of
the performance of the economy for the new concept of ‘Beyond GDP’ which combines
heterogeneous dimensions (state of the environment, allocation of resources,
objectifiable quality of life, subjective perception of well-being) as
components of a broader vision of development.
In the
foregoing context, prosperity actually means having an all round wellbeing.
1.2. Definition
and indices of Poverty in Nigeria
There
are many definitions of poverty. The major weakness of many of them is that
they leave out the political factor of collective participation in
decision-making.
However,
there appears to be a consensus that poverty is:
‘a state of long-term deprivation of
well-being, a situation considered inadequate for decent living’[3].
Along this line, poverty has also been defined as an economic condition of
lacking money and other basic necessities such as food, water, shelter,
education and healthcare, to guarantee a decent living.
In short, a lack of prosperity.
The
trend in Relative Poverty in Nigeria, covering various years, is presented
below.
TREND IN RELATIVE POVERTY[4] IN
NIGERIA
|
Year
|
Poverty
incidence (%)
|
Estimated
Population (Million)
|
Population
in poverty (Million)
|
|
1980
|
28.1
|
65
|
18
|
|
1985
|
46.3
|
75
|
35
|
|
1992
|
42.7
|
91.5
|
39
|
|
1996
|
65.6
|
102.3
|
67
|
|
2004
|
54.4
|
126.3
|
69
|
|
2010
|
69.0
|
163
|
112
|
|
2011
|
71.5(NBS
forecast)
|
168
|
120
|
Source: Compiled from Reports of the National
Bureau of Statistics, NBS.
From the Table above, the compelling conclusion that can be
drawn is that the proportion of Nigerians living in poverty has been
increasing, from year to year. From 18 million Nigerians who were living in a state of long-term deprivation of
well-being, a situation considered inadequate for decent living in 1980,
the figure rose to 120m by 2011. The NBS[5]
found that poverty levels have been rising by the year, for all types of
measurement of poverty, whether based on relative poverty, absolute poverty,
subjective poverty or Dollar-per-day[6],
even though the percentage for each type of measurement varies slightly.
1.2.1 Other Indices of Poverty
In spite of the oil wealth, indices of quality of life show
Nigeria is at the bottom of the ladder compared to less resource-rich and war
ravaged countries, as shown below by the measures of IHDI, HDI, and Education Index.
IHDI
The UNDP ranks Nigeria
116th position (out of 134
countries) in the Inequality-adjusted
Human Development Index, IHDI for 2011. In other words, Nigeria is among the last 18 countries in the
world in terms of Inequality Adjusted Human Development.
The IHDI is a measure of the average level of human development of
people in a society after inequality (in terms of access to education, health
and income) is taken into account.
HDI
As far as the 2011 estimates for Human Development
Index (HDI) are concerned, Nigeria is
ranked 156th position out of 187 countries. This means that
Nigeria belongs to the last 31 countries
in the world lagging behind in terms of HDI.
Education
Index
The United Nations ranks Nigeria
143rd position out of 179 countries in the Education Index. This
means that Nigeria belongs to the last
36 countries lagging behind in terms of the level of investment in human
development.
2.
WHY DO WE HAVE A RICH COUNTRY WITH
MAJORITY OF THE POPULATION POOR?
As a
typical rational person is likely to prefer prosperity to poverty, the critical
question, which the topic of our discussion poses is: why are so many people
poor? This question is answered below, in this subsection.
There are
several views on why people are poor. These include variations in:
·
education,
·
inheritance,
·
ambition,
·
talent,
·
health,
·
personal connections,
·
opportunities,
·
luck, and so on.
Though the
above varied factors may no doubt play a role in deciding why an individual is
rich or poor, for the vast majority of poor people, it is more useful to look
deeper at the structure of the society. To this extent, my thesis or argument
is that majority of Nigerians are poor
in spite of a natural resource-rich country because of the nature of:
·
the economy,
·
the political system, and
·
Nigeria’s colonial history.
As a
scholar[7]
has contended, one cannot separate
economics, political science and history. The economic system refers to the
way the resources of a country are organised to produce goods and services;
politics is the control of the economy and history, when accurately and fully recorded,
is the account of the control of the economy by the dominant political forces.
2.1 The
Role of the Economic System in Poverty Creation and Perpetuation
An economic
system may be defined as the way in which societal resources – human, material,
land, and technology – are organised and allocated to produce and distribute
goods and services to meet societal needs.
In order to
understand an economic system, we need to understand the three (3) basic economic questions:
1.
What goods and services should the society produce with its resources?
2.
How should the goods and services be
produced?
3.
For whom should the society produce?
It is thus
the economic system that determines what
to produce, how to produce and distribute
what is produced. In other words, the economic system is the process of taking decisions on what to produce, how to produce and who
gets what (i.e. distribution).
Examples of
economic systems or processes of taking
economic decisions include:
·
The
market system: the market determines
what is produced and who gets what. In other words, individual producers are
allowed to produce goods and services based on the maximum profit they think
they will earn. This is also otherwise called the capitalist system.
·
Mixed-economy: This is a variant of the market
economy. The mixed economy is so-called because, in reality, there is no pure market economy, in which the
market absolutely determines what is produced and who gets what. Thus, the
mixed economy refers to the system in which a role is assigned for the
government within the market-based economic system. In other words, the state
takes certain key economic decisions while the individuals also do.
·
The
planned system: the workers,
collectively, or the state/government predominantly takes the economic decisions.
This is also otherwise called the socialist
system.
Key issues in the choice of economic
system
·
Need v. Greed (Profit): While the goal of production and distribution
in the ideal socialist economy is satisfaction of the needs of ordinary people,
profit consideration dominates the market or capitalist system. Thus, where the
individual investor cannot make desired levels of profit, there will be no
motivation for production.
·
Inclusivity v. Exclusivity: While the socialist economic
system is programmed or designed to take care of the interests
of all working people, the market or capitalist system is programmed to exclude the poor. The individual investor plans to
meet the needs of those who have money or the purchasing power to buy the goods
and services produced. For example, the education entrepreneur or the property
developer plans to meet the education and housing needs only of those who can pay.
·
Exploitative v. Non-exploitative
relations: The
market system is by nature exploitative. It thus tends to breed antagonistic,
war-like conflicts, even though there are areas of cooperation between unions
and employers, as far as industrial relations is concerned.
Nigeria
operates the capitalist or market system. From the identified features of the
capitalist economic system or the market system, the cause of pervasive
poverty, particularly in a typical neo-colonial country, is the market system.
In the market, certain products are
highly valued while others are valueless. The market system accords
priority to producing to meet the needs of moneyed people while the interests
of the have-nots are not important to be taken into reckoning. In the market, it is not one person one
vote, but one Naira one vote. The person with a million Naira has a million
votes. The market system is a social Darwinist system – survival of the fittest: if you have the
means, survive; if not, perish!
Social Darwinism[8] is
an attempt to explain social circumstances of poverty and inequality on the basis
of natural differences in individual ability, talents and willingness to work.
Those who are capable and willing to work rise to the top and prosper; the
indolent ones fall to the bottom and are poor. Hence, Samuel Smiles’ (1986)
‘heaven helps those who help themselves’ and Spencer’s (1967) ‘survival of the
fittest’.
Social Darwinism
maintains that inequalities of wealth, position and political power are
naturally inevitable. Any attempt to alter the natural state of inequality is
an affront against nature itself. Thus, there is no rationale for government
supporting the poor and disadvantaged. As Summer (1884) puts it, ‘the drunkard
in the gutter is just where he ought to be’ (Cited in Heywood, 2003:54).
Social Darwinism relies on the work
of Charles Darwin (1809 – 1882), The Origin of Species (1972), which refers to
the natural world in explaining a process of ‘natural selection’ by which
certain species that are naturally fit survive while others die. But it refers
this analysis from the natural world to the world of human society where it may
not be applicable.
2.2. THE POLITICS OF POVERTY: THE ROLE OF POWER
AND POLITICS IN PERPETUATION OF POVERTY
Recall that
we earlier stated that politics is the means by which the economy is
controlled. In other words, the answers
to the basic economic questions are controlled
by politics. That is why politics has been defined as who gets what, when and how. This definition can help in
appreciating the role of politics in the creation, perpetuation and intensification
of poverty.
There are several
views on the cause of poverty. These include:
·
That
poverty is a natural phenomenon. Just as the fingers are not equal, so also the
existence of poor and rich people is divinely ordained.
·
That
people are poor because they are lazy, and that
·
That
politics creates poverty.
The first
two views are nothing but rationalisation of poverty from the philosophical worldview
of the ruling and exploiting classes in order to disarm the masses from
challenging the political power of the wealthy.
The truth is that the problem of
poverty is a product of political choices or decisions. Thus, the poor are
poor because the rich are rich. The process of enrichment of the rich is the
process for the dispossession of the poor.
Examples:
·
Income Inequality: The resources of the country are
used first to satisfy the greed of the
rulers and the crumbs that remain are used to attend to the need of the
majority. That is why a typical Senator
earns more than two times what the US President earns while the official minimum wage is only N18, 000!
The US President earns only about N60
million per year compared to a Nigerian Senator who earns at least N163 million per year. That is why the
National Assembly has refused to obey a recent court order, which ordered it to
publish budgetary allocations it has received.
·
Privatization:
The rich Nigerians dispossess society of the common patrimony and enrich
themselves in the name of privatization. Privatisation is looting (of common inheritance)
by the ruling class.
·
Social
Services: The rulers go
abroad for medical care and send
their children abroad for education, using public resources, while they refuse to implement constitutional
provisions, which mandate them to provide cost-free education and health care
for the masses.
·
Housing
Demolition: The rich live in mansions and demolish the shanties where the masses live in order
to build houses, which only the rich can afford.
·
Aiding
developers to rob people of their land: The ruling class helps enrich so-called private
developers with land compulsorily acquired from poor people under the Land Use
Act. Many of the so-called private developers lack the capacity to provide
houses. So, they end up selling the land at exorbitant prices to individuals.
Alternatively, they demand initial mortgage deposits, which only people who
have taken questionable government contracts can afford.
·
Bank salvage: While thousands of bank workers
lost their jobs on the basis of bank consolidation and reforms, the bank owners
were helped with huge resources to save their investment and prevent bank
failure. Meanwhile, education, health, housing for the poor, and so on, remain
underfunded. As at 2009 when I religiously tracked the CBN injection of funds
into the banking sector to salvage the banks from collapse, the CBN had
committed not less than N1.82trillion[9].
·
Establishment of AMCON: AMCON stands for Asset Management
Corporation of Nigeria. It was established in 2010 following the promulgation
of its enabling Act. It is a Special
Purpose Vehicle (SPV) through which non-performing loans (loans which the
beneficiaries are no longer repaying) would be absorbed by the CBN. In line
with this objective, according to the CBN Governor, Mallam Sanusi Lamido Sanusi[10],
the CBN has recently acquired the non-performing risk assets of some banks
worth over N1.7 trillion. The AMCON is funded mainly by the CBN
contributing N50 billion annually
into a sinking fund while the banks contribute only 0.3 per cent of their total assets. According to the press, President Jonathan’s Economic Advisers are
among the debtors, owing N1.3 trillion of the debts absorbed by AMCON[11].
The AMCON list of debtors[12],
according to the 17 September circular issued by the CBN comprised 113 companies and 419 individuals. The
companies included Femi Otedola’s Zenon Petroleum and others that were
allegedly involved in the fuel subsidy scam, estimated at US$6.5bn[13].
·
Corruption: According to the IMF[14],
over $700bn had been realized in oil
revenues alone since 1960. Eighty five
per cent (85%) of this sum accrues to only 1% of the population.
·
Also, Ribadu[15]
asserts that ‘Between 1960 and 1999,
Nigerian officials had stolen or wasted more than $440billion. That is six times the Marshall Plan…’ - the total
amount that was used to rebuild the whole of Western Europe after the massive
destruction produced by the 2nd World War. In spite of the oil wealth, there is
an alarming incidence of poverty, which has turned the country into host to 6%
of the core chronically poor in the world[16].
The APRM Report on Nigeria asserts that the country is host to the third
largest concentration of poor people in the world after China and India and is
among the top 20 countries in the world with the widest gap between the rich
and the poor.
2.3. THE
ROLE OF NIGERIA’S COLONIAL HISTORY IN POVERTY PERPETUATION
The colonial experience of Nigeria has meant the inheritance of an
economic system built on extractive institutions that coerce the masses to
produce wealth for dictators (colonial, local military and civilian rulers) and
their cohorts (local and foreign) who are nurtured by a corrupt incentive
mechanism to maintain and promote the system. This system has been entrenched and
is being sustained by legislative, political and judicial structures and
inducement devices. It is this system that has retarded socio-economic
development. To this extent, corruption is just a symptom of the decadent and
unjust system and not the cause of underdevelopment and poverty. It is
important to have this understanding in order not to misplace energies in the
struggle to emancipate ourselves.
IMPLICATIONS:
What are the implications of the inherited system?
These issues are discussed below in this subsection.
Mercantilism[17]
Mercantilism is a
system of political economy, which aims at restraining imports and promoting
exports so as to achieve a favourable balance of trade (in international trade)
and generate employment in the domestic economy. This system dominated
Western European economic thought, policies and practices between the 16th
and 18th centuries. While the policy worked in the interest of the
colonising countries, it undermined the productive capacities of the colonised
countries. Colonies were discouraged against production of manufactured goods. They were to engage in primary production
of cash crops and mineral extraction for
export and depend on importation of manufactured goods. That was the
division of labour at the level of international trade. From the standpoint of
developing countries, mercantilism is an economic structure that perpetrates unequal terms of trade, as costly
manufactured goods are to be exchanged for cheap primary raw materials. Mercantilism
is thus a protectionist economic system, which protects the economies of the
industrial countries against those of the developing economies by a combination
of economic, financial, legislative and political pressures.
Though there is the tendency to transfer capital to the
economy that offers the best conducive atmosphere for profitable investment
today, the mercantilist economic system still largely characterises economic
and trade relationships between the industrial countries and the economies of the
former colonial countries till today. Though the phenomenon of Nigeria
producing crude oil and depending on importation of petroleum products is
largely a product of the corruption and failure of the internal ruling class,
the reality of that economic relationship is a typical example of the way
mercantilism works.
UNEQUAL AND DECLINING TERMS OF TRADE
The
economic relationship between developing and industrial countries is
characterised by unequal terms of trade, which continue to worsen.
The UNCTAD[18]
has noted that:
There has been a long-term downward trend in real
nonfuel commodity prices since 1960 ... The commodity prices recession of the
1980s was more severe, and considerably more prolonged, than that of the Great
Depression of the 1930s .
Findings
by Christian Aid[19]
have also confirmed the assertion by UNCTAD:
the prices Third World
countries receive for many of their traditional exports, from coffee and cocoa to
rice, sugar, and cotton, continue to
decline. The relative value of their exports has declined even more—for
example, in 1975 a new tractor cost the
equivalent of 8 metric tons of African coffee, but by 1990 the same tractor
cost 40 metric tons.
Even
World Bank[20]
has confirmed the trend of falling commodity prices:
Between 1980 and 1986 the real prices of primary
commodities fell sharply.
The effect of the declining terms of trade
could be better appreciated when we consider the findings by the United Nations Food and Agricultural Organisation, FAO[21].
This body estimated that if commodity prices had maintained the same real value
as in 1980, the Global South would be earning an additional $112bn in annual
export revenues, which was double the then level of their aid receipts.
Causes of worsening terms of trade
But the worsening terms of trade did
not just arise naturally; the causes are due, more to consciously determined
policies and conditions, than chance occurrence. The causes could be explained
as follows:
·
The
economy of a typical African economy is more susceptible to the vagaries of world price changes and other external
shocks than more diversified economies[22].
·
the World Bank’s encouragement of all
primary commodity producers to pay off their debts by increasing their exports”[23]
From the publication of the World Bank,[24]
the following factors can also be identified:
·
Slower growth in industrial
countries and corresponding depressed demand.
·
shifts in technology in the industrial
countries aimed at reducing reliance on, and
demand for industrial raw materials.
·
Growing subsidies and trade
protectionist policies in the industrial countries, as provided, for example,
by the EC's Common Agricultural Policy.
·
Past investment in
infrastructure and new techniques, and subsequent output expansion in
developing countries in response to the high prices of the early 1970s.
·
Domestic policies adopted by
developing countries in response to directions dictated by the core industrial
countries.
EFFECTS OF UNEQUAL TERMS OF TRADE
Rising Debt Stock
Nigeria’s
external debt profile has again been on a gradual rise. Before the exit from
the Paris Club debt as at end of December 2004, the external debt stock was
about $35.94bn. After the uneconomic and slavish payment of over $12bn in
2005/2006, the external debt stock dropped to $3.54bn. As at April 2012, it had
risen to $5.9bn while the total debt stock, external and internal amounted to
$44bn[25].
Though the current debt stock is about 20 per cent of GDP and is generally not
considered a problem, because the general recommendation is that debt stock
should be less than 60 per cent of GDP. However, it is important to note that the
debt stock is rising gradually again and may sooner than later reach disturbing
proportions. It should also be appreciated that much of the existing and new
loans being incurred are from multilateral sources – the World Bank,
African Development Bank, International Fund for Agricultural Development, and
so on. Though these are termed ‘soft loans’ with certain concessional
terms, including no interest charges, repayment grace period of 10 years and
long repayment of between 20 and 40 years, they carry a service charge of 0.75%
per annum. The critical implication of this nature of loan is that the
future of the coming generation is being mortgaged and enslaved. The debts are
being incurred, stolen and enjoyed by the current ruling class but the burden
of repayment is to be borne by future generations.
Increasing interest rates
The
reasons for the rising debt stock include:
·
Unequal
terms of trade.
·
Rising
interest rates.
·
Imposition
of penalties for failure to repay loans
on time. On a continental basis, UNCTAD[26]
calculated that between 1970 and 2002 sub-Saharan Africa received $294 billion
in loans, paid back $268 billion in debt service, but was still left with debts
of some $210 billion. In the case of Nigeria, the original value of Nigeria’s
external debt in 1985 was $18bn. This
increased to $35.9bn as at December 2004. But the cumulative debt service
payment during the same period was $36.6bn[27].
Growth of incredible inequality both
within Africa and between Africa and the industrial world.
Povey,[28]
has pointed out, with graphic data, the results of unequal terms of trade with
the attendant shocks arising from the vagaries of the world economy, within the
context of neoliberalism:
Example of inequality among
Africans: Whilst over two thirds of Africans exist on less
than $2 a day[29]
, other Africans are amongst the richest people in the world. Aliko Dangote of Nigeria is richer than
everyone in Britain. Nicky Oppenheimer
and Johann Rupert of South Africa are richer than all but two people in Britain[30].
Example of inequality between
sub-Saharan African countries and Europe: In 1820, the average European worker earned about three
times what the average African
earned. Today, the average European worker earns around twenty times what the average African earns[31].
Export-oriented
production: As the
explanation of mercantilist economic arrangement shows, the periphery country is programmed to produce
for export to earn foreign currencies with which to fund importation of
manufactured goods rather than producing much of what would be consumed
domestically. The country is thus made to depend on importing from the external
world to meet domestic consumption. A significant portion of foreign currencies
earned in international trade is thus spent on funding importation. Labour should campaign for a re-direction of
economic policies towards wage-led, domestic-driven growth, rather
than the traditional export-oriented
production.
IMPLEMENTATION OF IMPERIALIST
DICTATED ECONOMIC POLICIES
Economic Globalisation:
Economic globalization has been
defined as a dynamic that is bound up with the pattern of
European capitalist development, which demands, with threats of sanctions that:
…every set of social
arrangements must establish its position in relation to the capitalist West… it
must relativize itself. It must be said
that in increasing sectors of the World this relativization process involves a
positive preference for Western and capitalist possibilities[32]
Any surprise that in 2002, the US urged that market system
should be embraced world-wide:
The
lessons of history are clear: market economies, not command-and-control economies
with heavy hand of government are the best ways to promote prosperity and
reduce poverty. Policies that further
strengthen market incentives and market institutions are relevant for all
economies –industrialized countries, emerging markets, and the developing
world[33]
(emphasis mine).
But in case of resistance or
reluctance to adopt pro-business policies anywhere in the world, then the US
imperialism is prepared to use force:
While the
United States will constantly strive to enlist the support of the international
community, we will not hesitate to act alone, if necessary… It is time to reaffirm the essential role of American military
strength. We must build and maintain our defenses beyond challenge. Our
military’s highest priority is to defend the United States. To do so
effectively, our military must ... deter threats against U.S. interests,
allies, and friends; and decisively
defeat any adversary if deterrence fails[34] (emphasis mine).
STRUCTURAL ADJUSTMENT PROGRAM (SAP)
SAP is an
element of economic globalisation. The introduction of SAP in 1986
fundamentally altered the economic structure of Nigeria as well as the
character of development plans. There was a transformation from state-centrism
to the private sector being seen as the engine of economic growth.
Prior to 1986, there existed about
1,500 public enterprises in Nigeria. Swanson
and Worlde-Semait[35]
established that about 600 enterprises and 900 smaller ones were operating at
the Federal and State/Local government levels, in the 1980s, respectively[36].
All that has changed with SAP and privatisation.
The major components of SAP (which have been
termed neoliberalism) included:
- reduced government spending by removing subsidies
on public goods or privatising or commercialising their supplies.
- trade liberalisation, removing import controls and
restrictions on foreign investment
- privatisation of state enterprises
- devaluation of the currency
- flexible labour regulation regime by reducing legal
protection, and real value of minimum wages.
The effects
of SAP have been accessed on a global basis. The conclusion is that it has
failed woefully. Permit me to quote extensively from the work of Povey[37]:
In 1989, even the World Bank[38]
was forced to admit that “overall Africans are as poor today as they were 30
years ago” (World Bank 1989: 1).
Between 1980 and 1987 the real income per capita fell by about a quarter
in Sub-Saharan Africa.
(These realities had implications for purchasing
power of the citizens and the prospects for survival of companies operating
even in the private sector).
Povey went further:
... the results were grim. Economic growth
declined from over 3% in 1985-90 to less than half of this figure for 1991-1995
(Economic Commission for Africa 2012).
Even the World Bank itself found the results disappointing. A 1992 study found that:
World Bank adjustment lending has not
significantly affected economic growth and has contributed to a statistically
significant drop in investment ratio (Elbadawi, Ghura and Uwujaren: 5)
In a study covering 220 reform programs
sponsored by the World Bank, more than a third were judged to have failed by
the World Bank’s own Operations and Evaluation Department (Dollar and Svensson,
1998, p. 14). As the United Nations
Economic Commission for Africa and the African Union concluded:
SAPs exacerbated the crisis of the state in
Africa… The limited state capacity at
their birth was weakened as the public sector and public bureaucracy became
major targets for state budget cuts, often inspired by SAPs. The paradox of
SAPs is that, while the state was expected to lead the process of economic
reforms, stabilization and transformation, its capacity was dismembered, and it
became unable to pursue the reform measures effectively. SAPs frequently held
back economic growth and social progress, negating the construction of
developmental States (UNECA and AU 2011: 102/03).
......
Annual growth rates fell from
a respectable 4 percent in 1970-79 to 1.7 per cent in 1980-1989 and only 0.4
per cent in 1990-1994 (Capps 2005). As a
Nigerian economist described developments:
The socioeconomic conditions in most
African counties deteriorated sharply in the 1980s and per capita income fell
at the rate of 2.2% pre annum in Sub-Saharan Africa (Iyoha 1997: 21). Since the per capita income of Africans was
lower at the end of the decade than it was at its beginning, the decade of the
1980s is widely regarded as Africa’s “lost decade” of development
opportunities. (Iyoha 2002: 6)
Trade Liberalisation:
Trade
liberalisation is an element of SAP. I’m focusing on it particularly because of
its special impact of the textile industry. Trade liberalisation has affected
several industrial sectors in Nigeria negatively. For instance, in its golden
age, 1970s-1980s, the textile industry had about 250 factories involving about
800,000 direct jobs and about 1,750,000 indirect jobs. Today there are less
than 30 textile factories employing only tens of thousands instead of the
previous hundreds of thousands[39].
One of the key reasons partly responsible for the collapse of the Nigerian
textile industry was WTO’s Agreement on Textiles and Clothing (ATC), which
brought the textile industry into full compliance with the General Agreement on
Tariffs and Trade (GATT) by which all quota restrictions were removed by
January 2005. The removal of quota restrictions made it possible for Chinese
companies to penetrate the US and the Nigerian markets for textile products.
4.0.
THE ROLE OF LABOUR IN TRANSITING
FROM POVERTY TO PROSPERITY
However,
does it mean that the masses are helpless and that there is nothing we can do
to change the grim situation we have described?
No, a lot
can be done and achieved. Just as politics creates poverty, so also, politics
is the driver of change. Development is politics. Politics is the driver of
development. Politics is the means to bring about development and change. Government
policies are not only determined by the ruling class, experiences continue to
confirm that governments and their policies are also influenced by public
opinion and mass action from below.
Examples:
·
Reduction in the price of petrol
from N140/litre to N97/litre in January 2012: the reduction was effected, not out
of concern for the welfare of the poor, but out of fear that there might be a
military take-over of power if the nation-wide strike had continued.
·
The
setting up of the Farouk Lawan House of
Reps Panel on fuel subsidy scam ($6.5bn) and the limited prosecution of a
few of those indicted.
·
Recall of sacked medical doctors by
the Lagos state government on
the basis of indefinite collective strike action by the doctors and mass
demonstrations carried out in support of the striking doctors by pro-labour
civil society organisations.
·
THE N100bn COTTON, TEXTILE AND
GARMENT REVIVAL FUND[40]:
The Textile
intervention Fund was part of the N150bn industrial Intervention Fund. The
intervention Fund should also be seen as an example of the benefits of mass
agitation. Though it may not have brought about the desired revival in the
industry, it shows the possibility of how organisations of the poor could
influence policies and bring about changes.
The
challenges are to:
·
Understand that the policies of the National Economic Empowerment and
Development Strategy (NEEDS, 2003), developed under President Obasanjo, the
New Partnership for Africa’s Development (NEPAD), ‘Vision 20:2020’, the Yar’Adua’s ‘7-point Agenda and Jonathan’s ‘Transformation Agenda’ are all built on the same failed SAP with its class agenda: promotion of
the private, at the expense of public good. They need to be resisted.
·
Organise: each segment of the poor strata
must organise. Workers must build strong unions. Students must build student
unions. Artisans must organise. Traders must establish traders associations.
·
Institutionalise rights: in the neo-liberal age that we live
in, there are challenges to the right to
unionise and to give constitutional backing to other fundamental
rights, including socio-economic rights. For example, whereas the South
African Constitution makes socio-economic rights justiciable as part of the
bill of rights, the Nigerian constitution dichotomises between civil and
political rights and socio-economic rights, and the latter are not justiciable.
The Nigerian labour movement must fight to make socio-economic rights
justiciable. When rights are given constitutional backing, it strengthens the
capacity of the civil society, including trade unions to resist.
·
Build alliances: politics is a game of numbers.
There is strength in numbers. Alliances could be built with other unions who
face similar challenges.
·
Make claims or demands on
government: take
collective mass action, on the basis of individually-initiated actions, and
jointly, on the basis of alliances with other organisations that share common
deprivations or concerns. Mass actions are usually viable when called around
popular issues that the members can easily find relevant to their day-to-day
lives.
·
Build socialist labour parties based
on the mass of workers and the poor for
the purpose of electoral contestation
and ultimate seizure of political power.
Though pressure mounting by the civil society, including trade unions, often
brings about policy changes based on shifts in balance of power, ultimate
seizure of power by the workers, in an alliance with other marginalised groups,
is the basis for sustained protection of the interests of the masses. The
unprecedented degree of social conflicts and insecurity in Nigeria today means
nothing but the inability of the capitalist system to take society forward. The
pervasive and excruciating poverty in Nigeria today shows there is a vacuum
which only a socialist labour
party can fill, based on a programme of eliminating economic inequality and
making the majority of human beings in the society - the poor - the ultimate
beneficiaries of any government policy. Such a party will not be enslaved to
maintaining the existing social order; it will campaign for system change based
on the masses stamping their feet on the sand of history and demanding
fundamental changes.
4.0. Conclusion
The purpose of government should be
the protection of the poor and the vulnerable members of the society through
redistribution of income, wealth and power from the corrupt and rich elite to
the poor masses. The rich ought to be taxed to pay for free public services –
education, health, water, and so on – for the poor. Beyond the protection of
the poor and vulnerable strata in the society, there is no justification for
the existence of the social institution called ‘Government’. This protective
function of government is in the nature of a trust, a contract. As long as this obligation is fulfilled by
government, whatever law or policy made by government is binding. However, the
moment government fails to protect the wellbeing of ordinary people, the people
have the right to oppose the government and its policies. Such policies
automatically lose validity, worthy of being observed only in the breach while
the government itself loses legitimacy.
The masses must
collectively take their fate into their hands and demand changes! A change,
from poverty to prosperity, is not only desirable; it has become a necessity!!
I thank you all for your attention.
Femi Aborisade
17 October
2012
[1] Being paper delivered on 17 October
2012 at the 24th Annual National Education Conference of the
National Union of Textile Garment and Tailoring Workers of Nigeria (NUTGTWN) in
conjunction with the Nigeria Textile Garment and Tailoring Employers
Association (NTGTEA)) on the theme ‘The role of labour for peace and industrial
development in Nigeria’ held on 16 to 18 October 2012 at Leisure Spring Hotels,
KM 5, Iwo/Ibadan Road, Osogbo, the State of Osun.
[3] B. E. Aigbokhan (2008). ‘Growth,
Inequality and Poverty in Nigeria’. Addis Ababa: Economic Commission for
Africa. (ACGS/MPAMS Discussion Paper No. 3).
[4] The NBS defines ‘Relative Poverty’
as the level of living standards of the majority in a given society.
[5]NBS (2012). The Nigeria Poverty
Profile 2010 Report. Press Briefing by the Statistician-General of the
Federation, Chief Executive Officer of the National Bureau of Statistics, Dr.
Yemi Kale, at the Conference Room, 5th Floor, NBS headquarters,
Central Business District, Abuja, on Monday, 13 February 2012 (Available online
at http://resourcedat.com/resources/The-Nigeria-Poverty-Profile1.pdf as at 16 May 2012.
[6] NBS defines ‘Absolute Poverty’ as
the ‘minimal requirements necessary to afford minimal standards of food,
clothing, healthcare and shelter’. ‘Subjective Poverty’ refers to the
proportion of the population who consider themselves to be poor based on
‘self-assessment and sentiments’. ‘Dollar-per-day’ refers to the World Bank’s
Purchasing Power Parity (PPP) index, which defines poverty as the proportion of
those living on less than US$1 per day poverty line. According to the NBS, the
current dollar rate is US$1.5.
[7] J.W. Smith, The World’s
Wasted Wealth 2 (1994). Available online at http://www.globalissues.org/issue/1/trade-economy-related-issues
Retrieved on 11/10/12.
[8] Discussed in Aborisade, F. (2006).
Research Report on socio-economic rights development and Nigeria’s
commercialisation and privatisation policy: a descriptive appraisal. (Report
submitted to CCS, School of Development Studies, University of Kwazulu-Natal,
Durban, South Africa).
[9] Evidence: According to Olubu (2009: 17 & 36) the CBN had
lent over N400 billion to the banks,
as at May 2009 (See National Daily, 18-22 May: 17 & 36). The loans were advanced from the CBN’s
Expanded Discount Window (EDW). The EDW was created by the CBN to prevent bank
failures under the weight of the global economic recession. Under the EDW,
banks can borrow for up to 360 days. Before the crisis, they could only borrow
over night. Previously, overnight borrowing by the banks attracted 14.75
percent. Under the EDW, interest rate dropped to 17 percent per annum. Earlier
in the year, the Nigerian Compass (6
January 2009:1& 5), had reported that the CBN had salvaged the banks from
going under by not less than N800billion,
‘without following due process in order not to send the wrong signal to the
troubled financial services system’. The third reported injection was the
pumping of N420 billion into five of
the banks – Intercontinental Bank, AfriBank, Finbank, Oceanic Bank and Union
Bank (The Guardian, 15 August 2009:
1 & 49), to salvage them from
collapse. According to the Governor of the CBN, this facility would be for a
period of between five and seven years. (The
Guardian, 29 August 2009: 1 &50). The CBN Governor later clarified that
‘much of that money will never come back because the bulk of the money is in
the stock market’ (The Nation, 2
September 2009: 1). There was also the fourth injection of about N200bn into the banks, after the August
N420bn. Altogether, as at the fourth
injection, the CBN pumped over N1.82
trillion into the banks to salvage their
collapse. The sum of N1.82 trillion
injected to save the banks as at 2009 amounts to 54% of the N3.4 trillion 2009 Federal Budget. If the Federal
Government had committed the N1.82 trillion pumped into the banks as a salvage
measure into any social service for the welfare of the poor, radical changes of
revolutionary proportions would have been recorded in such sector.
[11] Saharareporters internet post of 21
September 2012.
[12]
Allafrica.com/stories/201210050236.html (retrieved on 13 October 2012).
[13] Sahara Reporters’ internet post of
21 September 2012.
[14]
Cited in M. Watts (2009). ‘Crude
Politics: Life and Death on the Nigerian oil Fields,’ (Working Paper No.
25). Washington DC: Institute of International Studies, University of
California, Berkeley, USA, available online at
<oldweb.geog.berkeley.edu/ProjectsResources/ND%20Website/Nig...> accessed
on 22 May 2012.
[15] ‘Capital Loss and Corruption: The Example of Nigeria: Testimony before
the House Financial Services Committee, 19 May 2009, available online at www.house.gov/apps/list/hearing/financialsvcs.../ribadu_testimony.pdf
accessed on 22 May 2012.
[16] African Peer Review Mechanism (APRM), 2008, paragraph 427 p.142.
[18] UNCTAD (2002) Least
Developed Countries Report 2002: Escaping the Poverty Trap, New York and
Geneva: United Nations, p. 138.
http://www.unctad.org/en/docs/ldc2002_en.pdf (18
November 2009) (cited in Povey, 2012, p. 4).
[19] Christian Aid (2003) The Trading Game: How Trade Work,
Oxford: Oxfam, p. 22. (cited in Povey, 2012).
[20] World Bank (1988) World Development Report 1988: Public
Finance in Development, Oxford: Oxford University Press, p. 24.
[21] FAO
(2005) The State of Agricultural
Commodity Markets 2004, Rome: UN Food and Agricultural Organisation.
[22] T. Mkandawire & C. C. Soludo (eds.). (1999). Our Continent, Our Future: African
perspectives on structural adjustment, Dakar: CODESRIA.
[23] M. B. Brown (1995). Africa’s Choices: after thirty years of the
World Bank, London: Penguin Books, p. 79.
[24] World Bank (1988) World Development Report 1988: Public
Finance in Development, Oxford:
Oxford University Press, p. 24.
[26] UNCTAD (2004), ibid.
[27] O. A. Ogunlana (A deputy director
of the Central Bank of Nigeria, CBN) www.g24.org/TGM/ongu0905.pdf (retrieved on 14/10/12).
[28] D. Povey (2012). The economic
history of sub-Saharan Africa since independence (A forthcoming publication).
World Bank (2012) Global Economic Prospects January 2012 -
Sub-Saharan Africa Region, Washington DC: World Bank
[30] D. Povey, (2012), op.cit.
[31] D. Povey (2012), id.
[32] Waters,
1995:3-4, cited in Aborisade,
F., (2002). Globalization
and the Nigerian Labour Movement: A Critical Introduction. Ibadan:
Centre for Labour Studies (CLS) and Movement Against Privatization (MAP).
[33] US National Security Strategy,
2002, p. 17, available online at http://merln.ndu.edu/whitepapers/USnss2002.pdf accessed on 23 May 2012.
[34] Ibid., pp. 6 & 32.
[35] Swanson, D. and Worlde-Semait T. (1989).
Africa’s PEs Sector and Evidence of Reforms. World Bank Technical Paper
No. 95.
[36] Similar findings were made by (UNCTAD
(2009). Investment Policy Review: Nigeria. New York and Geneva: UN. Available
online at http://archive.unctad.org/en/docs/diaes/diaepcb2008_en.pdf (at p. 3) and accessed on 20 May 2012.
[37] D. Povey (2012), op. Cit.
[38] World Bank (1989) Sub-Saharan Africa: from crisis to sustainable growth, Washington
DC: World Bank
[39]
Sundaytrust.com.ng/index.php?...intervention-fund... and
nants.org/wp-content/uploads/2012/02/The-Comatose-Nigerian-Te... (retrieved on
13 October 2012).