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Two
decades ago the power equation was made up of powerful retired
generals, politicians and traditional rulers. Several blue chip
companies had at least one retired general on their boards. It was a
prudent strategy validated by the vagaries of military rule. Having the
most influential politicians on a company’s board was an insurance
policy. The private sector was buying much needed protection from the
military. Retired generals such as Shehu Yar’Adua, TY Danjuma, Mohammed
Magoro and Wushishi were among the soldier-tycoons that bestrode the
boardrooms of corporate
Nigeria. After military rule reached its apogee under General Sani Abacha,
Nigeria returned to democratic rule under President Obasanjo.
Obasanjo’s
retirement of all politically involved officers from the military
neutralized otherwise dangerous cliques within the armed forces. The
purge implemented by the then Defence Minister, TY Danjuma helped to
bring the military under control by rooting out a fifth column loyal to
some retired soldier-politicians. This was important because decades of
political involvement had imbued some military officers with unhealthy
ambitions and dubious allegiances. This done, Obasanjo set about his
reform program which majored heavily on privatization and
liberalization. The Nigerian economy was supine, crushed by the costs
of maintaining costly and inept public monopolies, many of which were
truly beyond salvage. The solution was to privatize.
Clearly
Obasanjo’s reforms were founded on the philosophy of trickle-down
economics. In a nutshell, rather than attempt to empower many and fail,
the Obasanjo government sought to empower a few and succeed. The
empowered few would then empower the many others. The promise of free
market capitalism, it was thought, depended after all on a band of
super-capitalists who would transform the economy by creating wealth.
This is the notion behind government’s enthusiastic support of
Transcorp. As far as this idea is concerned, Obasanjo has succeeded.
The aristocrats of today’s
Nigeria
are no longer the retired generals of yore; they are the
super-capitalists like Aliko Dangote, Femi Otedola, Jim Ovia, Michael
Adenuga, Tony Elumelu among others. Obasanjo’s parting gift to
Nigeria
is a new moneyed class that employs thousands. Power has changed hands
in the most unexpected of ways. The chieftains of corporate
Nigeria
constitute the new oligarchy. As important supporters of the ruling
Peoples Democratic Party (PDP), they are also among the most
influential power brokers presently.
That
power corrupts and absolute power corrupts absolutely is not a truth
limited to the realms of politics alone. It is equally valid in the
realms of business. The new oligarchs like all power brokers are
susceptible to the temptations of power. This is why a note of warning
must be sounded now. It is my conviction that privatization and
liberalization are both necessary. Only a climate of competition can
stimulate the sort of impetus for double-digit growth that we need.
Free market capitalism is meant to provide exactly that sort of
climate. However, the inbuilt paradox of capitalism is that it can by
itself lead to ultra-capitalism and create a situation in which the
free market ceases to be free. This is what happens when a clique of
super-capitalists are positioned to control the wealth and the economy
of a nation. Privatization was and is right because inept monopolies
are a drain on our economy. Unlike eight years ago when our concern was
failed public monopolies, 2007 finds us wondering if public monopolies
have not been replaced by private monopolies. A public monopoly is not
bad because it is ‘public’; it is bad because it is a monopoly. A
monopoly of any kind is a bad idea precisely because it stifles
competition which is the very purpose of free market capitalism. As we
consider the corporate aristocrats of today, we must ask if we are not
inadvertently paving way for an ultra-capitalist dictatorship. It is
said in classical economics that whoever controls salt and sugar
controls the economy of a nation. Dangote’s control of these two
commodities has long been a fact of our economy.
The
recently announced proposed recapitalization of stock-broking firms to
the tune of 1 billion naira will place the stock-broking sector firmly
in the orbit of the banking industry. This creates a situation in which
banks, the biggest players on the stock exchange, would in effect,
become regulators of their own transactions. The potential for insider
trading and all kinds of unethical transactions is clear and a
financial monopoly that places the wealth of the nation in the hands of
a few is being created. The same clique has its tentacles in oil and
gas, telecommunications, banking and every plum sector of the economy.
The
massive contributions of super-capitalists like Dangote, Otedola and
others to the economy must be applauded. They create the much needed
jobs and wealth for the society. The rise of the super-capitalists was
also a catalyst for the resurrection of the middle class after its
extinction under military rule. What is of concern is the huge
potential for abuse of economic power. Like democracy, the free market
capitalist system works best where there are checks and balances in
place. The spectre that we must fear is that of an oligarchy that
controls not just policy but politics. These super-capitalists already
exercise a measure of influence over government policy. The problem of
fuel supply and the state of our refineries might have been resolved,
for instance, if it were not for highly connected business interests
that make their fortunes from the import and sales of petroleum
products. In 2003, Dangote was the biggest single donor to the PDP
while this year Otedola was the chair of the Yar’Adua campaign team. It
seems that we are not far from the day when the aristocrats of
corporate
Nigeria
can influence the choice of candidates for elective positions at
various levels and exercise even more control over the policies of the
state. This is the spectre of privatized governance. In this regard, we
can learn from the experiences of other nations. In the
US, corporate interests and big business were backers of the ill-fated
US led war on
Iraq.
Plum contracts for the reconstruction of
Iraq
were granted to Halliburton, a company of whose board, American Vice
president Dick Cheney was once a member. More relevantly, the promise
of free market reform for
Russia
after the collapse of communism in the nineties did not materialize
because the state-owned monopolies were simply sold off to a cabal of
corrupt businessmen. In
Russia
today, a corrupt oligarchy with ties to organized crime runs the
economy. It was to avoid the emergence of a corporate monopoly that the
US government pursued anti-trust charges against Microsoft some years back.
These
instances demonstrate the dark side of capitalism, which we must guard
against here. The challenge for the government is to realize that free
market capitalism is great so long as the market remains free. That
freedom means that everyone can get a shot at prosperity and small and
medium scale enterprises do not have to worry about being muscled out
by capitalist goliaths. Corporate monopolies and oligarchs tend to
limit the freedom of the free market. The government must therefore
balance free enterprise capitalism with the public good. The government
must remain a repository of public trust and not the domain of big
business. In so doing, we would then be able to achieve the
democratization of prosperity.
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Authors 
Posted by Robot| 22.06.2007 07:50