January 30, 2015

hISTORY eNDS EVERYWHERE:

Only capitalism can save Nigeria : Deeply divided and full of potential, this country could be headed for a boom - or a coup (Tim Stanley, 31 January 2015, The Spectator)

While the vast majority of the country is dirt poor and visibly malnourished, a few get rich out of exploiting contacts and demanding kickbacks. That's apparent in the army. There the elite officers live like kings, sending their children to English public schools. A junior officer, meanwhile, makes around £350 a month, or less, to fight fanatics. Support is growing for Buhari and his promise to clean things up. Whoever loses, they'll contest the result in courts and the streets. These are conditions that classically support a military coup.

In short, Nigeria has to be delivered from its own government. Happily, that's starting to happen. One rare economic achievement has been the privatisation of the telecommunications industry -- its success is obvious in the fact that everyone in Abuja has a mobile phone and millions are on Facebook. Now the government has sold off its power supply, and it's done so with the help of the UK.

We usually think of international development as charity: Bono laying wells in the desert. But in Nigeria, the Department for International Development has been far more flexible and savvy. For example, it's persuaded the northern city of Karno to reduce the number of local taxes from 200 to 17. The Nigeria Infrastructure Advisory Facility programme has also guided the largest privatisation in African history in the power sector. As the government moves from being a supplier of power to a regulator, so the investment switches from taxes that are misappropriated and misspent to private money that -- by dint of being someone's personal fortune -- is far more likely to be well managed. There is little discipline in a Nigerian bureaucracy rife with corruption. But there is discipline in the marketplace, where competition leads to ruthless efficiency, and failure to bankruptcy.

The frustrating thing is that British business isn't exploiting the opportunities it has opened up. Nigerians don't understand why the UK government helps to liberate their economy, yet it's the Americans and Chinese who offer the investment. Sometimes, perhaps, the Brits are a little too nice for their own good. We are encouraging the growth of solar energy in the north through programmes like Solar Nigeria -- a brilliant idea because one thing they have no shortage of is sunshine. But as someone complained to me, the British tend to sell the idea as an environmental thing and most Nigerians couldn't care less about rescuing the polar bear. They would jump at the project if they were convinced that it would make them money.

Posted by at January 30, 2015 3:27 PM
  

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