The fall of the Berlin Wall in 1989, subsequent re-unification of the two Germanys in 1990, dissolution of the Warsaw Pact and collapse of the Soviet Union in 1991 signalled the triumph of capitalism over communism. It was a long battle. What started in the 18th century as an ideological war between adherents of Adams Smith’s The Wealth of Nations, 1776, and Karl Marx’s Communist Manifesto, 1848, eventually crystallised into political economic blocs, which found expression in governments all over the world, and how they defined their roles in business for the most part of the 20th century. By the end of World War II in 1945, the two leading Allied powers, communist Soviet Union and capitalist United States, occupied defeated Germany along their spheres of influence, which roughly corresponded to the east and west of the city of Berlin.
The political form and economic shape of Germany were decided by the victorious powers. However, with both powers being poles apart ideologically, no consensus was reached about the future of post-Hitler Germany. The division of Germany was inevitable. From the east of Berlin emerged a Soviet Union-backed German Democratic Republic (East Germany) and from the west, a United States-backed Federal Republic of Germany (West Germany). The Cold War had begun. Beginning from 1961, a separating wall was constructed across Berlin. In less than four decades, in the same city where it all began, communism succumbed to capitalism. The Cold War was over. The world has moved from a bipolar power bloc to a unipolar capitalist one ably championed by the United States, unchallenged. All the 15 former Soviet republics, Russia inclusive, have abandoned communism and embraced capitalism.
A resurgent neoliberal economic thinking now pervades the entire world economic order. “Government has no business in business” was proclaimed in triumph. This meant that the public sector should hands off the means of production for the private sector to take charge. This line of economic thought was amplified by Washington-based international finance corporations and their allied multinational conglomerates, commonly referred to as ‘foreign investors’ and echoed by neoliberal economic pundits in a manner that resonated throughout the developing countries of Southeast Asia, South America and Africa. By 1999, Nigeria caught the bug because democracy spreads with capitalism. The “government has no business in business” mantra was the economic and ideological basis of the Peoples Denocratic Party-led federal government in its 16-year rule. And it was on that fallacy that the faulty foundation for Nigeria’s economic growth and development was firmly laid.
Nigeria embraced that concept without reservations and, as history has shown, an excessive free market economy creates a cycle of boom, bubble and burst. The Great Depression of 1929 and 1988 and the global recession of 2008 were as a result of extreme neoliberal economic practices. Nigeria’s current economic crisis is a cumulative result of factors whose foundation is the extreme neoliberal economic policies of the past and present administrations. Regrettably, the current administration of President Bola Ahmed Tinubu has followed the same unproductive path of its predecessors because of its inability to think out of the box on the economy.
The reason for the existence of a modern state should be more economic than political. Successful nations are in reality profitable business ventures that are competing with other countries in the race for global resources. Sadly, Nigeria exists more for political than economic reasons. As with all things politics, Nigeria is a huge resource wasting away. The primary responsibility of government is to ensure not just the physical but also the fiscal and monetary security of lives and properties. Therefore, the concept of “government has no business in business” is flawed and should be rescinded, going forward. Government has business in business because the only business of government is business, and any government not in business has no business in government. Government cannot abdicate its responsibility as the main driver of the means of production to private entities and expect not to be trapped in the doldrums of economic underdevelopment.
All over the world, from China to America, Europe, the Middle East and Southeast Asia, governments have business in business directly or indirectly. And the starting point for government’s presence in business is its ability to run an efficient public service along ethical, moral and patriotic lines in order to achieve quality service delivery to the people and their private businesses. The private sector is a product of the public sector. The policies that create, monitor and regulate the private sector are initiated and implemented by the public sector. And policy decisions must be guided by economic common sense, rather than political expediency, in order to achieve a productive and export-competitive economy. Any government that insists that it has no business in business will end up with a corrupt and inefficient public sector whose policy decisions will be dictated by the expediency of identity politics of patronage-sharing, which will stunt growth and impede the development of the private sector, as is the case with Nigeria.
Beyond an efficient public sector, governments world over invest in profitable enterprises that are export-competitive in order to grow the wealth of the nation through externally generated revenue. This is in addition to heavy investments in critical infrastructure that are vital to making their economies productive and competitive. And to secure an advantageous share of externally generated revenues, business-oriented governments explore every available diplomatic avenue to negotiate favourable trade deals that will allow more exports out of their countries into the global market. In reality, contrary to the entrenched narrative that the private sector is the main driver of the economy, it is actually government that is the main driver of the economy of any rich and prosperous nation anywhere in the world.
Without government investments in critical economic infrastructure such as power, energy, iron and steel, it would mean the economy is built on quicksand. The over-reliance on the private sector for the means of production has led Nigeria deeper into poverty and debt. The private sector is supposed to be driven by invention and innovation that seek to improve upon what the public sector provides and not state capture of public assets by corporate undertakers. The public sector must be good for the private sector to be better. With a moribund public sector, the private sector is unchallenged and becomes a monstrous oligarchy, which adds little or no value to economic development. This is why privatisation failed. A private sector, which thrives on government assets acquisition, by acting as proxies for government officials, inevitably creates a weak and unproductive economy.
The resort to excessive borrowing by successive administrations and efforts to sell off some national asset to help government raise money to spend its way out of economic problems is unpatriotic and unwise. The way out of Nigeria’s economic quagmire is to adopt the philosophy of “government has business in business.”
Rather than engage in endless borrowing and attempts to sell national assets to fund governments inefficiencies and corruption, government should invest in profitable ventures that can generate revenues for the Nigerian state. Any government that cannot do business has no business in government.