Wale Edun: Driving Nigeria to destruction

Minister of Finance, Nigeria

 There is no way to say this politely but that is what Wale Edun is doing – driving Nigeria to destruction.

There  are three root causes to Nigeria’s destruction.

  1. Nigeria was one of the  testing grounds for neo-liberal policies introduced by the IMF. These policies involved the financialisation of the economy and the subservience of politics to the rites of the capital markets. These techniques now perfected have been applied to the US itself and the UK. Many Nigerians were familiar with hospital staff and university teachers on regular strikes and were surprised to see these now arising in the UK.  These neo-liberal  policies lead to the hollowing out of the economy and the impoverishment of the mass of the population.
  2. There is in Nigeria a fundamental  loss of any understanding of policy and its implications- that is the basic elements of rulership. There used to be generally an understanding that power was far more valuable than money for any true politician.

There is of course one instance of the Roman Emperorship being bought outright by a bidder, Didius Julianus, whose lack of appropriate skill and shows of cowardice led to his being assassinated a few months later. (Leigh-Howarth 2022)
Great leaders previously could eschew wealth given they had great power. Now actors want power to acquire wealth. Power is close to rulership and rulership brings the people together with their leaders. Western institutions in their quest for control have sought to denude the African world of politics of anyone who seems too ‘committed’. As in the US , this system allows actors to say whatever they like to get elected as long as once in office they obey the dictates of those truly in power. Whereas in the US, for any legislation to pass some funding promises must be attached in Nigeria this is taken to the limit. Japan offered  as a gift a multi-million pound piece of medical equipment. The officers at the port of entry demanded a contribution to allow such expensive equipment to enter the country. The Japanese made it clear they would not make any contribution for a gift and vowed never to make gifts to Nigeria again. The port officers could not care less. Important legislation was needed to implement a concessionary arrangement with South Korea. Again, given the situation South Korea was not going to make any additional contribution. Nothing has happened. During the era of structural adjustment all genuine businesses were faced with destruction. Many owners committed suicide. Only the most venal survived and prospered. These lessons from structural adjustment times have been overlearned. These effects of massive trauma, like the trauma in Russia,  hang over the whole society. Merely cancelling the policy of structural adjustment and apologising does not heal the trauma inflicted on Nigerian society (Chelwa 2016).

  1. One of the lessons over learnt from structural adjustment is that people only do things for money. At the level of policy, this has led to a complete bankruptcy of thought. There is zero understanding of business motivation. This is compounded by the complete failure to comprehend the difference between income and profit. A simple example will suffice. A former Central Bank Governor was sent to London with the intention to help promote the Nigerian film industry.  His idea was that the Nigerian government was willing to provide funds to help. Madness. No real filmmaker would touch this. Knowing Nigerian politicians the filmmaker would expect that they would visit him in the evening and make demands for a slice of the pie. But this madness starts from the politician’s belief that the only factor involved is money. In reality cutting costs, helping improve quality and providing public goods would be the proper role of government policy. But cutting costs, improving quality, and providing high-quality public goods for the film industry does not offer means of graft. The training in film in Nigeria is appalling, the local equipment environment is appalling. Bringing the film schools and professional training up to international standards and making the latest equipment available would reduce every filmmaker’s costs and increase the quality of her films. But, as I said, there is no money in that for the politicians. Government policy can alter market behaviour and investment behaviour without spending a sous. It is government policy that dominates the economy but the keys to changing it are not financial so are of no interest to the politicians.


Let us look at farm policy in a previous regime. They offered a good sum of money to some researchers to develop a policy around food storage to reduce the immense amount of agricultural product lost to wastage. However, the people who won the contract were immediately visited by the politicians requesting that 60% of the funding be handed to them straight away. The remaining 40% was not sufficient to carry out the project. The politicians knew this and no demand for a final product was ever made.

Let us look at tax policy. Given the state of the Nigerian economy the most urgent issue is to increase exports. The strongest method to achieve this is to make exports tax-free. This is a tried and tested policy going back to Hong Kong and Singapore. This was made clear to Wale Edun but he showed no interest. There is no money in a policy that does not require government expenditure. In his draft tax policy, I could see that EVERY POLICY involved the distribution of government funds. This would make me laugh if I was not crying so much.

Tax-free exports do not involve any loss of taxation revenue. First of all, the increased exports did not exist before so there is no loss of tax revenue but a huge increase in foreign exchange for the country. Secondly, as the enterprises expand, they increase employment, and these new employees are not tax-free but pay tax, so there is a related increase in tax revenue. Then there is a multiplier effect and so on. Rather than save the country, Wale Edun continues this game of self-destruction. He adopts approaches that do not work, but he continues with them. Like all neo-liberals, failure is an invitation to try harder.

Some people will say that speaking out so bluntly is not desirable as it will make it difficult for the government to ever employ you. THIS IS VERY IMPORTANT. The way Nigeria works is that once appointed and given honours you are then applauded. You are told you are ‘good to go’ and don’t spoil anything and please sign these papers. Your role is not to upset the applecart but to enjoy your fiefdom and your day in the sun. One reformer after another has been gently and sometimes not so gently castrated.

So Wale Edun now mixes with the US and international neo-liberal elite, on first-name terms with the World Bank elite, and waxes salubriously in his new environment.  All his policy formulations have the flavour of standard neo-liberal economic policy while enabling great looting. He states:

‘So what we have to look to, for instance, is the $10tn in sovereign wealth funding that is out there, as well as private capital that is also in the trillions, and the green financing that is available. So we are on the path to attract those funds to invest [in order] to increase productivity, grow the economy, create jobs, and reduce poverty in Nigeria.’ (Everington 2023)

This is all pure self-delusion. There is not a single policy word in his statements. Why should anyone invest? What is Nigeria’s economic strategy other than braindead phrases such as ‘macro-economic stabilisation’ which sounds very learned if you know nothing of economics? Macroeconomic stabilisation is often a euphemism for IMF policies. What are our short-term goals? What are our medium-term goals?

  But let us be clear it is not strictly the looting that is ruining Nigeria but the failure to apply appropriate policies and often a complete lack of policies. President Xi has said that corruption in China is the greatest threat to the regime. In Xi’s evaluation corruption in China is very great but is tolerated by the people because of the delivery of economic well-being. In this case the corruption in China does not stand in the way of economic development.

This, too, is important. In China, the form of corruption is a means to taking from the future profit. Whereas the trauma of Nigeria is that the corrupt officials and friends want their return today. ‘Now, now, now’ is a popular Nigerian phrase. If they had demanded percentages of future profits and allowed enterprises to make profits this might have been tolerable. But this reveals another deep wound in the Nigerian psyche. In the 1970s and early 1980s Nigeria was awash with enterprises that were investing in the future. Some people put all their hopes into the growth of the capital value of their enterprises. This was the future for their families and descendants. Then the US cooperated with Saudi Arabia to suddenly collapse the price of oil to derail the Russian economy. Nigeria was collateral damage.  All those who had invested in the future faced financial doom. All those who focussed on government contracts, on short-term returns, survived. Both economic development and real wealth are based on capital values. The focus on short-term returns and immediate cash contradicts the requirements for growing capital values.

Turning Nigeria’s economy around requires an understanding of trauma, facilitating a way to give confidence to invest in future capital values. There is a need for human empathy and an understanding of global geo-politics to navigate the Nigerian economy through rough seas. At present, the Nigerian elite can see directly the hopelessness of their stewardship. They know too well their inadequacies such that Godwin Emefiele, as Governor of the Central Bank of Nigeria, told a group of outside investors that there was no hope for Nigeria. If there were ever such a thing as a capital offence for a central bank governor that would be it.  In their eyes the ship is lost so get what you can before you leave. There is a phrase from the 1970’s ‘Will the last person to leave please turn off the lights’ which sums up their attitude. For these empty vessels, anyone who claims to have a way out must be just another carpet bagger with a new scam.

Wale Edun states: ‘When people see that their funds are being wasted, you lose the public trust.’ I could not put it any better.

REFERENCES:

Chelwa, Grieve. 2016. “Is It Too Late Now to Say Sorry?” Africa Is a Country. May 29, 2016. https://africasacountry.com/2016/05/is-it-too-late-to-say-sorry-imf-edition.

Everington, John. 2023. “Wale Edun: Macroeconomic Reform in Nigeria ‘Not Always a Straight Line.’” The Banker, November 20, 2023. https://www.thebanker.com/Wale-Edun-macroeconomic-reform-in-Nigeria-not-always-a-straight-line-1700474754.

Leigh-Howarth, Jake. 2022. “Didius Julianus, the Man Who Bought the Roman Empire.” Text. Ancient Origins Reconstructing the Story of Humanity’s Past. Ancient Origins. June 28, 2022. https://www.ancient-origins.net/history-famous-people/didius-julianus-0016956.