Economic Summits and Developmental State

Kayode Komolafe With the 2027 general elections in view, perhaps no political party or candidate would deny the urgency of the theme of the 32nd Nigerian Economic Summit: “Growth That Works: Delivering Jobs, Productivity and Shared Prosperity.” The differences, if any, would probably arise over the strategies and tactics required to achieve these central economic objectives. At the risk of sounding repetitive on this page, the Nigerian Economic Summit Group (NESG), an eminent think tank and ad-vocacy forum, deserves lavish commendation. It has sustained for over three decades, an important platform for public-private sector dialogue on the Nigerian economy. Indeed, the NESG remains one of the enduring examples of how sections of the Nigerian elite can forge a consensus around the imperative of harvesting ideas for national development. In a sense, the theme of the 32nd Summit of NESG is a derivative of the economic objectives already enshrined in the Chapter II of the 1999 Constitution of the Federal Republic of Nigeria. Paradoxically, this is hardly acknowledged by our economic experts and pundits. Some of the participants at the summit which ended yesterday might even contest this assertion. Specifically, Section 16 of the constitution provides a foundation for the management of the economy in the interest of the wel-fare, prosperity and socio-economic justice especially for the people. Inexplicably, in more than a quarter of a century of experimentation with liberal democracy, political parties and candidates have hardly drawn sufficient inspiration from this constitutional provision in formulating their manifestos, programmes and development strategies. However, whenever electoral disputes arise, or controversies emerge over intergovernmental relations, politicians and their lawyers are quick to invoke the constitution as the fundamental law of the land. Yet remarkably little attention is paid to the fact that the constitution is not merely a charter of formal political freedoms. It also embodies a vision of socio-economic justice. Indeed, the constitution provides a broad framework for economic management. The Fundamental Objectives and Directive Principles of State Policy, contained in Chapter II, are particularly relevant in this regard. The constitution has as an objective an economy managed in such a manner as to secure the maximum welfare, free-dom and happiness of every citizen based on social justice and equality of status and opportunity. It also stipulates the state to direct its policy towards ensuring the planned and balanced economic development of the country. In particular, Chapter II of the Constitution puts the matter in Section 16 like this: “(1) The State shall, within the context of the ideals and objectives for which provisions are made in this Constitution. “(a) harness the resources of the nation and promote national prosperity and an efficient, a dynamic and self-reliant economy. “(b) control the national economy in suck manner as to secure the maximum welfare, freedom and happiness of every citizen based on social justice and equality of status and opportunity. “(c) without prejudice to its right to operate or participate in areas of the economy, other than the major sectors of the economy, manage and operate the major sectors of the economy. “(d) without prejudice to the right of any person to participate in areas of the economy within the major sector of the economy, protect the right of every citizen to engage in any economic activities outside the major sectors of the economy.” In the same Section 16, the Constitution also stipulates as follows: “(2) The State shall direct its policy towards ensuring: “(a) the promotion of a planned and balanced economic development. “(b) that the material resources of the nation are harnessed and distributed as best as possible to serve the common good. “(c) that the economic system is not operated in such a manner as to permit the concentration of wealth or the means of produc-tion and exchange in the hands of few individuals or of a group; an “(d) that suitable and adequate shelter, suitable and adequate food, reasonable national minimum living wage, old age care and pensions, and unemployment, sick benefits and welfare of the disable are provided for all citizens.” These are not empty constitutional declarations. They represent a conception of the responsibility of the state for economic development and social progress. As for the question of justiciability, specific laws have been subsequently made to make as-pects of Chapter II enforceable in areas of access to primary healthcare, basic education and social welfare. So, Chapter II is not dormant. In essence, the constitutional provisions offer a solid basis for the emergence of a developmental state in Nigeria. Think tanks such as the NESG should devote greater intellectual and policy attention to this constitutional question.. Perhaps the relative neglect of this constitutional dimension of economic management can be explained by the dominance of neoliberal ideas in the Nigerian policy arena over the last few decades. Under this ideological influence, the assumption has often been that development would follow almost automatically once the role of the state was sufficiently diminished and market forces were allowed to operate with minimal interference. Planning was consequently treated as an obsolete idea, while the state was increasingly conceived primarily as a provider of “an enabling environment for private enterprise.” The underlying illusion is that the market, left substantially to its own devices, would deliver the structural transformation necessary for national development. Yet, the limitations of this neoliberal orthodoxy have become increasingly evident, not only in neo-colonial states, but also in advanced capitalist economies. Across the world, governments are rediscovering the importance of industrial policy, strategic public investment, economic planning and purposeful state intervention in shaping development outcomes. The debate is no longer simply about whether the state should play a role in economic development. The more pertinent questions concern the nature, quality, capacity and strategic direction of that role. This changing global ideological climate should provide an opportunity for a more fundamental interrogation of the philo-sophical assumptions underlying economic policy in Nigeria. One striking weakness of the Nigerian political economy is the relative absence of clearly articulated schools of economic thought in the formulation of public policy. Elsewhere, competing development strategies are often rooted in identifiable philosophical underpinnings, whether liberal, conservative, Keynesian, social democratic, developmentalist or otherwise. The influence of economists such as Friedrich Hay-ek and Milton Friedman on the neoliberal turn in Western economic policy is a familiar example of the relationship between economic thought and political choices. There is a story that at any time you would likely find a copy of Hayek’s book in Mar-garet Thatcher’s handbag as she studiously demolished the British welfare state. Equally, the new British prime minister, Andy Burnham, who wants to repair the cumulative socio-economic damage done to the political economy of the UK since the days of Thatcherism, is also advancing from a clear ideological vantage. Similarly, the postwar experience of several East Asian economies demonstrates the importance of strategic state capacity, in-dustrial policy and long-term developmental planning. In Nigeria, however, economic policies are too often presented as technical prescriptions detached from their philosophical and ideological foundations. Reforms are announced, defended or criticised without sufficient interrogation of the economic theories, assumptions and historical experiences informing them. Consequently, public debate frequently revolves around isolated policy instruments rather than competing conceptions of development. This huge intellectual deficit should concern organisations such as the NESG. To achieve the much-discussed elite consensus necessary for national transformation, Nigeria needs a more rigorous debate about the character of its political economy and the role of the state in development. Such a consensus need not imply unanimity on every economic policy. Nor should it eliminate legitimate political differences. Rather, it should establish what may be described as the irreducible minimum conditions for national development. These would include a shared commitment to economic diversification, productive employment, industrialisation, infrastruc-ture, education, healthcare, technological advancement and the reduction of poverty and inequality. The constitutional basis for such a consensus already exists. But politicians and experts alike have strangely ignored this reali-ty. Section 16 of the Constitution should, in this respect, become something of a battle cry for development. Its provisions should inform the manifestos and programmes of political parties, irrespective of their political differences. Ordinarily, this should not be a Herculean task, especially given the limited ideological differentiation among the political par-ties in Nigeria. What is lacking is not necessarily agreement on the desirability of development. Virtually every political actor professes a commitment to growth, employment generation and poverty reduction. What is missing is a sufficiently serious engagement with the economic ideas, institutional arrangements and strategic choices necessary to translate these aspirations into reality. If the constitutional objectives became the common foundation of party programmes, political competition could then be ele-vated to a more rigorous level. Parties and candidates would be challenged to explain their preferred strategies, policy in-struments, institutional reforms and implementation mechanisms for achieving broadly agreed developmental goals. The debate would move beyond rhetorical promises to the comparative merits of alternative development pathways. For example, what should be the relationship between public investment and private capital in industrialisation? How should the state promote domestic productive capacity? What institutional mechanisms are required to coordinate economic transformation? How should economic growth be linked deliberately to employment creation and social inclusion? These are questions that cannot be answered adequately by the ritual invocation of “an enabling environment for the private sector.” Certainly, in Nigeria’s context a vibrant private sector is indispensable to economic development. Private investment, entre-preneurship, innovation and enterprise are essential components of any successful development strategy. But the historical experience of development does not support the proposition that private enterprise, operating without strategic public coor-dination, will necessarily deliver structural transformation. A developmental state is not synonymous with an overbearing state or an indiscriminate expansion of government bureaucra-cy. Nor does it necessarily entail hostility to markets or private capital. Rather, it is a state equipped with a nationalist vision, institutional capacity, policy coherence, developmental vision and po-litical commitment to mobilise public and private resources towards clearly defined national objectives. Such a state does not merely react to market outcomes. It consciously shapes the conditions under which productive invest-ment, technological learning, industrial upgrading and social development can occur. It is precisely this strategic capacity that Nigeria must build if the economy is to make the developmental leap that has re-mained elusive for decades. However, the next stage of this dialogue should go beyond the familiar repertoire of policy prescriptions. It should be enriched by a conscious effort to locate the provenance of the economic ideas informing policy proposals. The philosophical foundations of competing approaches to development should be made explicit and subjected to rigorous de-bate. This would deepen the intellectual quality of economic policymaking and help to move political discourse beyond the superfi-cial contest of personalities, slogans and promises. More importantly, it would enable Nigerians to evaluate the development strategies of political parties and candidates based on coherent economic visions rather than disconnected policy announcements. The challenge is, therefore, not simply to persuade politicians to endorse the worthy objectives of growth, jobs, productivity and shared prosperity. No politician would openly reject those objectives. Ultimately, Nigeria’s developmental challenge cannot be resolved merely by improving the environment in which market forces operate. It requires a purposeful, capable and accountable state working in productive partnership with the private sector. Such a state could be described as developmental. All told, it is time the idea of a developmental state was squarely placed on the agenda of the nation’s s political economy.