Ending Nigeria’s robber-baron era

The recent convictions at law of former governors Joshua Dariye, Jolly Nyame and Orji Uzor Kalu for various offences relating to the reprehensible mismanagement of public funds during their tenures and the consequent forfeiture of their ill-gotten assets may well be the beginning of the long walk to sanity, probity, and accountability in governance; it may well signify the beginning of the end for an emerging class of robber-barons who may be defined as persons who abuse their offices in government to establish phony corporate bodies using cronies or close associates even as they remain the un-seen “beneficial owners” and un-obtrusive barons of industry or of the commanding heights of the economy.

Many discerning people are wont to worry about Nigeria’s burgeoning robber–baron situation or of the nation’s murky business environment. The rising profile of crony capitalists or of tycoons who are promoted by the government’s hand–in–gloves chumminess and by official invidiousness is worrisome. From year to year, the worth of business men and women in crony industries is rising. This scenario, although a worldwide phenomenon, is most patently observable in the so-called emerging economies.

As commodity and property prices are reaching the rooftop, so are the value, for instance, of telecoms spectrum, doled out by officials, of licenses to electricity generation and distribution companies, of oil block and oil pipeline licenses etc. By this process alone, emergency billionaires have been magically created or conjured. Implicit state guarantees or exemptions from tariffs or waivers on taxes and import duty have allowed favored businesses to grow without firm roots. Such business’ operational days are however numbered as they soon fizzle out when they fall out of official favor or grace.

A fickle commodity situation, a backlash from an informed, insightful and vigorous middle class, policy rejig from a possible reforming political regime culminating in the opening up of the economy to vigorous competition, etc. are the Achilles heels of crony capitalism. From string-pulling or button-pressing to bribery, the shades or varieties of cronyism in business are infinite. Even though legal support can be found for its jurisprudence, much of it is unfair or immoral even as national fair dealing or trust in the state is undermined and as fair competition and true entrepreneurs are guillotined. It is clear that the kind of growth engendered by crony capitalism is ephemeral and does not vindicate the efforts of true or sincere entrepreneurs. It, in fact, denies the effervescence and originality of imaginative or enlightened start-ups Understandably, crony capitalism continues to flourish even in a pervasive situation of stunted growth. In spite of protestations to the contrary, the government has proven itself lacking the political will to halt the debilitating strides towards ultimate cronyism in corporate ownership and governance.

Public anger at unbridled inequality and corruption is sufficient reason for confronting the bugbear even as there is a social or moral requirement for government to seize the moment. For reasons that are not hard to fathom, the government has found it hard to call to order the vested interests in this miasma. An efficient and rules-governed court system, a body of fair and unwavering regulators, and an end to illicit political funding are the prerequisites for attaining the objective. All these are arguably not achievable in the tenure of one regime but they need to be kick-started for succeeding governments to perfect. There are situations when public resources find their way into private hands.

Government should be acutely conscious of how to track them or deal with such situations. Our privatization mismanagement has obviously created Nigeria’s nose-in-the-sky or irreverent oligarchy and hundreds of insuperable cronies. Many countries are in the throes of opening up their oil monopolies. Mexico, Saudi Arabia, and many developing countries from Brazil to India to China have reached advanced stages of privatizing their state-controlled firms to raise cash and improve efficiency. However unless such envisaged sales are fair and transparent, a new generation of cronies will emerge. To stem the tide of the deleterious effect of the activities of crony capitalists, the government should make it harder to stash crony cash abroad. Though capital flows worldwide have made this terrestrial globe richer, they have unfortunately allowed cronies to hide in tax havens.

Publicised registers of “beneficial ownership” – lifting the veil masking the human characters behind the shell and trust companies – will make it more difficult for cronies to hide. State-owned banks, by whatever name called, must be managed to make them tow the path of probity, accountability, and rectitude. In situations where such banks dole out large sums of money in lending to enrich properly-connected moguls, “bad or irrecoverable” debts have been the feature of their operating results score card. Under the salutary desideratum to protect depositors’ funds in failing banks, government panics and begins a programme of propping up the banks rather than establish a basis for periodic overhauling of the way they are run. Cronyism, like corruption, is adaptive; it has many lives. It may well find a new frontier in technology. As profits are extra huge or monumental and monopolies arise off-handedly and with ease, “rent-seeking” or crony capitalism naturally emerges.

Government, therefore, ought to push vigorously to encourage competition and transparency and not seek, as it is being suggested by not–totally-disinterested “non-participant” observers, for government to micro-manage technology outfits. The bullish activities of America’s robber-barons in the 19th century provoked a massive reaction that led to the so-called Progressive era. At the turn of the 20th century, politicians pushed for and ensured the passage into law of anti-trust propositions. Corruption panicked and retreated. America has since become richer, stronger and more politically stable for it. The Nigerian economy is faced with a similar situation. The choice is our leaders’.

The political arena today is filled with people whose emergence and activities are akin to the trajectory of crony capitalists or robber-barons we have discussed above. The political system is organized or managed in such a way that the people who sit atop it are in a position to build for themselves personal empires of cronies and of largesse which they dole out selectively or to those who do their bidding willy-nilly. Those who find themselves at the wrong end of the stick are side-lined, ignored or afflicted. The struggle to get into government has become so severe and intense that only the bullish can survive its blitzkrieg.

Once in government, the politicians are able to call the shots – hold on to the reins of government, allocate resources, opportunities, and amenities partially or exclusively to their cronies and constituency, and generally exercise power to the detriment or peril of their adversaries or opponents. The electoral process is sabotaged just to keep themselves securely in power even as the judicial system is blackmailed to pronounce as proper and un-assailable the results of patently-flawed or compromised elections. Comfortably ensconced in power, the adjudged winners are “licensed” to do as it would favour their further entrenchment.

Campaign promises are no moment so long as the populace is kept in check through sloganeering regarding a reformist ante or a transformation prognosis which ire and fury the opposition must not be allowed to douse. The opposition must be kept permanently away so the gains of a promised forlorn turn-around may become realisable at some future – no matter how indeterminate.

At elections which results are pre-determined, there is no come-uppance for niggardly, poor or non-performance of “mandate” as even a government that has failed to achieve its manifesto or keep avowed promises made in the full glare of the public is “returned” to power in rude pomp and unabashed revelry. Truly a reform of the electoral process including an enabling law that is corrective of all the pitfalls of our past experiences and that is contemporaneous with modernity or civilised conduct and practice is not negotiable and should by now be underway for presentation to the National Assembly from the Executive as a matter of priority.

Rotimi-John, a lawyer and public affairs commentator

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