By Seun Kolade
The fundamental problem with the government’s plan is that it is based on a transfer of primary responsibility for reconstruction to an external agency. It is a curious and questionable plan that invites the lending organisation to lend and to spend…but it is the government’s primary responsibility to come up with a plan and to execute it.
In his recent visit to the United States where he met with US President Barack Obama, President Buhari confirmed that the Nigerian government has sought for a World Bank loan to the tune of $2.1 billion to rebuild the North-East region. The World Bank will, he said “spend the $2.1 billion dollars through its International Development Agency, which gives low interest loans to governments”. He went on to add that the World Bank was “eager to move in quickly” and “give out the loans”.
This development raises a lot of questions.
First, let’s get quickly get this out of the way. There is nothing inherently wrong with sourcing for loans to undertake capital or reconstruction projects. That is what any responsible nation of the world should do, especially in the wake of natural disasters or man-made destructions. That is what the countries of Europe did in the aftermath of the Second World War. In the case of Nigeria, the horrific tales of mindless destruction unleashed by the Boko Haram terrorists is well known throughout the world. The rampaging Boko Haram terrorists have laid villages waste and instigated the displacement of millions in North-East Nigeria. According to one report by the Internal Displacement Monitoring Centre, the Boko Haram terror is now responsible for internal displacement of about 3.3 million people. This is certainly a region that requires urgent attention in terms of reconstruction.
…the truth is that the history of World Bank’s interventions in developing countries has often been fraught with controversies and questions relating to effectiveness and judicious management of funds. Critiques of AIDS have argued at length that these interventions usually drive nations to greater debts with little to show for it. AID recipient nations are typically left in a state of aggravated poverty, and with a habit forming culture of dependency.
The fundamental problem with the government’s plan is that it is based on a transfer of primary responsibility for reconstruction to an external agency. It is a curious and questionable plan that invites the lending organisation to lend and to spend. This is the thing: the Nigerian government has, or should have, detailed information about its needs with regard to the reconstruction projects. There is nothing wrong with seeking some external expertise and support, but it is the government’s primary responsibility to come up with a plan and to execute it. It can call on the expertise of nations, agencies and individuals with more experience on post-conflict or post-disaster reconstruction, but it must not abdicate the responsibility to lead on the project.
Now, it is quite interesting to read that the World Bank was “eager to move in quickly” and “give out the loans”. This eagerness is, of course, portrayed in the sense of the organisation’s willingness to intervene with a sense of urgency on what is truly a humanitarian tragedy. However, the truth is that the history of World Bank’s interventions in developing countries has often been fraught with controversies and questions relating to effectiveness and judicious management of funds. Critiques of AIDS have argued at length that these interventions usually drive nations to greater debts with little to show for it. AID recipient nations are typically left in a state of aggravated poverty, and with a habit forming culture of dependency. This scenario has played out over and again in the countries of sub-Saharan Africa, and the root causes have been explored in depth by Zambian author, Dambisa Moyo in her Dead Aid: Why AID Is Not Working and How There Is Another Way For Africa.
There is a sense in which cheap things are costly and dangerous, and nowhere is this truer than trading off control of national economic policy for low interest loans and grants.
The idea that the alternative to refusal of World Bank loans is to starve and perish is lazy and pedestrian. It is important and necessary to mobilise funds for capital and other essential projects, but the primary goal of all capital projects should be to empower people and strengthen the conditions to generate more capital. How can a nation do that if it surrenders the control for the plan and policy to make development happen? There is a sense in which cheap things are costly and dangerous, and nowhere is this truer than trading off control of national economic policy for low interest loans and grants. There are other alternatives to raising capital other than “low” interest loans and grants. Raising bonds is one example. It may appear more expensive on the face of it, but certainly more effective. Like a young adult leaving home to rent or buy his own property, this is part of a nation’s growing up. It has got to be done.
…the logic of what I call “perpetual national infancy”, propounded by some, suggests that Nigeria should take the loan and let the World Bank lead the process because it neither has the expertise to implement it, nor the institutional structure and pedigree to execute such projects with required transparency and accountability. Such argument is shallow and simplistic.
Capital projects in a reconstruction, as well as other, context(s) offer the opportunity to drive the overarching long term agenda for economic growth and development. It is an opportunity to engage local labour, including many of those have been displaced by conflict. It is an opportunity to mobilise and develop local expertise, augmented and complimented by expatriate experience where necessary. It is the opportunity to stimulate and develop local industries. It is not the time, as is often the case with international AID organisations, to employ overpaid consultants who have little or no knowledge about local conditions and realities. It is not the occasion to get hooked on exorbitant imported equipment and materials for which viable alternatives exist, actually and potentially, in local industries.
Of course, the logic of what I call “perpetual national infancy”, propounded by some, suggests that Nigeria should take the loan and let the World Bank lead the process because it neither has the expertise to implement it, nor the institutional structure and pedigree to execute such projects with required transparency and accountability. Such argument is shallow and simplistic. It is a bit like saying a young adult should not own a property because s/he does not have the experience of paying bills to manage a house. In fact, this argument is not just simplistic, it is also sinister, and inimical as it is to the fundamental idea of growth and development. As it is for individuals, so it is for nations. As the saying goes, “a fool at forty is a fool forever”. Fifty five years after independence, Nigeria should be past the stage of infancy.
It’s time to grow up, Nigeria.
Seun Kolade is a Postdoctoral Research Fellow at the Centre for African Entrepreneurship and Leadership, University of Wolverhampton, UK.
PT