Politics and economic efficiency, squaring the circle, By Uddin Ifeanyi

The truth is simple: We cannot modernise the Nigerian state until we dispense with spendthrift governments. This is as much a statement about our governments’ preference for pharaonic projects (steel mills, refineries, roads that lead to nowhere, etc.) as it is about our ability as a people to walk back ideas that once looked good on paper and in left-wing discussion circles (import substitution industrialisation, for example) only to turn damp squibs when the tyre hits the tarmac. If it, then, is a discussion about the efficiency of the public sector, is it also an invitation to look at the mix of government spending?

With recurrent spending a disproportionately high component of public expenditure for as long as I can remember, you might be forgiven for thinking that government, as regulator, needs all of that labour power to manage a large and growing private sector. Not so. The economy’s infrastructure deficit (one consequence of low capital outlay and remiss implementation) is an impediment to the country’s growth and development, and currently calls for far higher levels of spending on capital projects. Along with government borrowing, a large public sector in this circumstance is a tax on private enterprise.

The Babangida administration’s formulation for what the economy’s growth engine should be — the private sector and not the public one — is the closest we have come as an economy to describing what has to be done to drive up domestic growth rates. It is also, in this sense, the most educated on the hurdles that an economy dominated by small scale, subsistence enterprises would need to navigate, going forward. We may not, however, have raised questions about the public sector’s ability to properly husband a thriving private sector.

Yet even the Babangida administration understood its task largely in terms of boosting small- and medium-scale enterprises. Forgetting that these never trigger the scale that can support manufacturing growth and the transition of labour from subsistence, rain-fed agricultural practices to large manufacturing industries. Wags argue that our policymakers’ inability to accept the market, as an instrument of development, is the bane of the economy. To allow markets across the economy, where entry and exit is as free as possible to both suppliers and consumers, will undoubtedly ginger both innovation and economic growth. Unfortunately, this requires a political elite that competes through development rather than vote-buying.

An even more important requirement is a public bureaucracy that is able to compel anti-trust compliance, rule against monopolistic and price-gouging practices, and act in the interest of the welfare of domestic consumers. This, some argue, is the one sphere in which the public bureaucracy, as presently constituted is most incompetent. Nor may we ignore the possibility that the public bureaucracy is not half as effete as it comes across, but that instead, a variant of state capture makes it impossible for the bureaucracy to act in the interest of competition and the public.

In 2014, the Report of the Presidential Committee on Restructuring and Rationalisation of Federal Government Parastatals, Commissions and Agencies (chaired by Stephen Oronsaye) took a look at the proliferation of federal agencies, their overlapping mandates, duplication of institutions and the resulting escalation in the cost of governance, and advised that the country rationalise its governance structures, eliminate redundancies and improve service delivery without creating new institutions to perform functions already assigned to existing ones.

Occam’s Razor, right? Essentially, William of Ockham, a 14^th‑century English thinker, argued that when faced with competing explanations, the one that demands of us the fewest assumptions should be the one we run with. Often summarised as “entities should not be multiplied beyond what is necessary,” it is a useful conceptual test for the efficiency of the organisation of the Nigerian state. This way of conceptualising ideas, processes, or things ought not to distract from the fact that the efficiency of government is not a function of the number of agencies it does away with, but how much government saves from reorganisations along this line, how much better it performs, and whether those gains are sustained.

All of these invite thinkers on how best to tinker with Nigeria’s outcomes to make sense of the constitution’s requirement that ministerial appointments must comply with the federal character principle and stipulation that the president must appoint at least one minister who is an indigene of each of Nigeria’s 36 states, against the background of the current government’s 47 ministers.

In the end, the inability of successive Nigerian governments to run fiscally disciplined shops might owe to residues from our internalisation of the politics of the Cold War. Non-aligned, pro-independence movements on the continent, and nationalistic, it often found itself on opposite sides of the United States. However, the same way political considerations trump economic ones all the time, in terms of results, the politics of Africa’s independence struggles have proven more performative than efficient.

Uddin Ifeanyi, a journalist manqué and retired civil servant, can be reached @IfeanyiUddin.