In defence of neoliberal economics, By Uddin Ifeanyi

You wouldn’t know from listening to the debate where the words are used that at heart, “neoliberal economics” is all about increasing the supply response of the private sector in any economy. yes already. It consequently contradicted the smaller state, but its opponents often used the word as one of the epithets directed at its unscrupulous enemies. In this story, neoliberal economists of any kind from “cradle-snatchers” to “old vampires fight against everything good for the younger generation”. As expected, because associations in developing and frontier economies face the problem of balance of payments neoliberal economic ideas with the concept of “austerity”. Consider the current situation in Nigeria, for example. It is impossible to think of a reform platform devised by the incoming government whose central planks do not include spending cuts or higher taxes – perhaps both.

Even before including the debt burden left behind by the Buhari government in the conversation on how to fix the economy, most experts have concluded that the public sector, at least at the federal level, is complicated because it has become unproductive. The ratio of employment in the public sector to the size of the economy, or, for that matter, to the population it must serve may not be higher than the norm elsewhere. But the duplication of public agencies that bloats us hurts government balance sheets, while limiting domestic efficiency. This is the driving idea behind the “Presidential Committee on the Restructuring and Rationalization of Parastatals, Commissions and Agencies of the Federal Government”, according to its leader Steve Oronsaye, established in 2011 by the Goodluck Jonathan administration.

Now, add the circa N77 trillion public debt to be inherited by the next government, increase the possibility that the federal government’s debt servicing costs this year may exceed revenue, and the discussion on the prospect of economic reforms easily expands some sales. government-owned companies, to balance the government’s books; deregulation of more economic sectors, to reduce business costs; and fiscal discipline (you don’t have to follow Milton Friedman to understand why the practice of government throwing hands over fists is not necessarily a good thing in the Nigerian example).

If one can understand the resistance to this portmanteau solution to our current economic problems – most of the discomfort that arises from immediate implementation, while the profits increase in the longer term – what is difficult to say is the argument that Nigeria’s current woes. The result of that recipe (the core solution of the neoliberal economic playbook) forms the core of our country’s organization. And this is not only because this will insult Mr. Muhammadu Buhari, whose 8 years in government was built around prioritizing the provision of government goods / services from provision by the private sector that is hated (at worst) and the struggle to get (at best). ). Arguably, many of the Buhari government’s economic failures are due to its desire to chart a path different from that provided by neo-liberal economics. In the monetary policy space, for example, it has paid attention to irritation with orthodox thinking and embracing new – if intellectually wonky – heterodoxy. Again, instead of building railways and rolling stock whose tickets are then priced below cost, common sense (and neoliberal economics) would suggest eliminating the risk of private sector participation in the sector, and creating a regulatory regime that then protects consumer welfare. It’s no surprise that one of the biggest investments in this economy to date – the one that sparked the GSM revolution – has no government money involved.

But what makes efforts to blame Nigeria’s problems on neoliberal economics almost impossible, more so is the fact that no Nigerian government has historically been willing to implement neoliberal policies. Even Ibrahim Babangida’s much-talked about (if not much-maligned) structural adjustment program (SAP) was forced by the poor economic conditions that had arrived, then, at the same cul-de-sac as the economy had reached. today. In the end, the Babangida administration’s “home-grown” variant of SAP reforms is of the orphaned variety – lacking in relevance to the original reform agenda and relevance to wider economic requirements. However, what our economic history has taught us is that when global economic conditions lead to higher oil prices (and the now infamous “accretion” of export earnings to the nation’s gross external reserves), our governments almost always abandon their reform agenda.

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