How the Private Sector is Increasingly Causing Non-inclusive and Unsustainable Economic Growth in the Nation

hhhhhThe immersion of our economy in the ocean of abjection has necessitated the review of our economic systems which is coming on the heels of a new government. Unsurprisingly, this shouldn’t feel or sound  more or less of an economy or a political  déjà vu, bearing in mind  the  common inherent pitfalls anyone is bound fall into when attempting to  discreetly single-out  the elemental concepts of one system (economic) from the other (government).  How do I mean? For example, a concept like capitalism refer adherently to economic systems while another  like fascism or communism  may refer to a type  government system, and at the same time a type of economic system.

However, reminding ourselves that the economic style adopted of a nation is often a function of the presiding government ruling pattern, one might begin to ask useful and thoughtful questions like; what economy system is our new military-turned-civilian president or government adopting? What government style is he running?  Questions in this light ought to diligently prick our interest and ginger our effort as compatriots in searching for answers. Moreover, for those who can read between the lines of the government actions, especially on the LCD screen of the economy, they might begin to find their bearing with these questions by a token of the ingenuity put in this article paint a clearer picture or decipher the writings on the wall.

However, what is of more quintessence is if whatever strategy adopted by the government style would indeed lift the nation up from of the economy wreckage that have be-fated it by virtue of corruption and other ineffective or failed strategies it has imbibed as a culture in time past.

A socioeconomic concept which is now a very wide reference point of call and action in development policy discourse across the world is said to truly and wholly describe what is foundationally responsible for the evident and inherent economy trauma of nations of the African continent, particularly. The concept, ‘Non Inclusive Growth’ was unequivocally and eloquently confirmed and reiterated by the president-elect of African Development Bank and immediate past former minister of Agriculture and Rural Development of Nigeria as mother of our economy overturn.

The concept, simply described as a development strategy that inherently discourages equitable opportunities or bolsters inequitable opportunities in its process of economic growth. In other words, the gains of the economic growth is not evenly shared or doesn’t spread round all for economic participants or stakeholder in either  every section or sector of society, nation, region or continent.

Consequentially, our continent and the nation in particular are a fatal victim of non-inclusive growth regrettably caused majorly by corruption. However corruption alone is not be blamed as other ill-socioeconomic vices like ;mismanagement, lack of transparency, social and economic insecurity, marginalization of females and youth, high-cost of doing business, inaccessible and unaffordable financing, infrastructural deficit, energy or power  deficit, unemployment, whacky implemented   policies, marginalization of rural development, general economic instability and lopsidedness, jointly    championed  our continent’s  economy , the highest of  the world’s poverty.

On another note, the fatality was amplified by the same input that is ordinarily believed to play a sedative role in the economy mishap and haplessness. This of course may be the general reason the deadly pest that is voraciously sucking   the blood and taking out the life from the body of our economy for its own increment (however selfish and philanthropic )but at the detriment of public either get noticed, corrected or exposed all the while.

As expected, to the surprise or dismay or many; the private sector which is generally dubbed as an all-embracing solution in advancing developing economy, like ours, over the series of setbacks that have ensnared and chocked it shouldn’t appear a saint or innocent if one is to plead the case of our ill-fated economy in the courtroom of ‘Inclusive and Sustainable Economic growth’.

The sector which has been eloquently and actively described  numerous times by international and  indigenous economy academics and leaders like Nigeria’s  Minister of Industry, Trade and Investment in person of Mr. Olusegun Aganga as the engine of growth and a key driver of the nation’s economy might have to be reexamined following the economic pointers that has successfully  thrown caution to the winds  of the new government to painstakingly re-determine the prioritized  role of the sector as a major driver in the positioning or repositioning of the nation and continent for inclusive and sustainable economic growth.

This has hitherto re-laid the bricks of the historical and unending argument of conflicting or controversial economy systems and theories even as they can be more and more confusing with government systems. In a bit to straighten out our take from the argument which been aggravated by urbanization among other socio-economic phenomena, we might ask the question; ‘which economic or government system establishes the most favorable atmosphere or condition for inclusive and sustainable economic growth?’

Generally, it is agreed that elemental concepts of economic or government systems like capitalism, Socialism, Communism, and Fascism of economic or government systems are not always mutually exclusive. Thus it may be safe to say that all nations of the world exhibit to some degree, ‘mixed economy’ as they combine more than one of economic concept or system.

While some of the economic or government systems might have either gone into extinction (as in the case of communism), or might be existent at a bare-minima level , or might be anticipated for a return or resurrection (as Karl Marx predicted communism will eventually take over the economic system of the world), the critical understanding of the underlying factors that methodologically constitute the   establishment of any kind of economic system has continually helped the present world  find its bearing in the wake of the elusive economic changes and environmental changes, like global warming, that have saturated the globe.

Irrespective of the clearly and unclearly defined difference or similarities of the systems-capitalism, Socialism, Communism, Fascism and mixed system- they are on the overall, determined on the Libra scale of who between the sectors (public and private) takes the upper hand in a nations overall mechanism of production, distribution, and consumption of goods and services to meet people’s needs and ever growing wants. In other words, who between the private and public sector takes the lead role in determining and providing what is produced, how goods are produced, for whom it is produced and how much is produced in a nation as they are the four cardinal determinant of a nation’s GDP.

This bugs down to determining which of the two ultimate scenarios creates the most favorable atmosphere or condition for inclusive and sustainable economic growth. Either scenario one;  where the public sector takes the upper hand of the nation’s economy system or  Scenario two;  where private sector takes the upper hand in nation’s economy system.

Nigeria a case study: The refraining of President Muhammadu from selling the Nigeria’s refineries on the basis that it might place the economy in the hands of the private sector and lay it open for possible exploitation which may rain down hardship to poor Nigerian may be socio-economically justified. It was clearly spelt out in the presidential memo that privatization of our major economic outlet (oil in this case) is a move that would eventually go down the line as giving the private upper-hand in the economy which would lead to non-inclusive socio-economic growth as there will increase in unemployment and cost of living and other economy dangerous conditions.

Likewise, the imperative call to recover another of the country’s major economic sector, power, from the hand of the private sector it was managed by for over the last 16 months might be graced by President Muhammadu positive response. On one hand, it is held that the reason behind this call of action is merely owed to fact that the aim of privatizing the sector had not been met because the projection before the sector was privatized was that by the end of 2014, the country would have been generating over 10,000MW but we are still struggling to generate 4,000 megawatts of electricity. On the other hand, it is gathered that the decision is equally very much in light of the president’s strategy and effort to secure inclusive socio-economic and sustainable growth via the upholding of public sector over the private.

In the same vein, the most recent development of President Buhari ordering a probe on the sale of NITEL to private investors in 2014 by previous administration is ringing the same bell his of economic or government system   very loud and clear for the umpteenth time. Accordingly, the President is very much interested in knowing if Nigeria was short-changed by virtues and vices of privatisation. In corollary, very much recently, there has been fresh dust raised on how Nigeria Airways was sold.

As this point, the question as to whose administration (pattern of economic or government) would indeed pilot aright the path of our nation unto inclusive and sustainable economic growth should be resounding in the minds of the compatriots. In an effort to give a head-on tackle to this puzzle, we might have to go back to books.

Rose of privatisation driven government; privatisations has a number of advantages that one cannot undermined as it grows economic exponentially.  It recorded that in the years 1000–1820 world economy grew six-fold, in years 1820–1998 world economy grew 50-fold on the fertilizing platform of a privatization driven government or economic system. Equally, private sector driven government provides; opportunity for people to realize dreams by encouraging positive traits like hard-work and creativity and   reproaching  negative traits such as laziness and complacency that affect the economy. It also provides   choice to customers and valuable goods and services. However, a few bad eggs bearable by privation overrules its golden eggs.

Thorns of privatisation driven government; Albeit a lot has been said on the role of private sector in growth to economy, much less have be said and on what makes the condition right to harvest and harness the growth that would eventually sincere development of our nation. That is, as the private sector is exponentially capable of growing an economy, it’s equally cable of catalytically destroying of an economy. As such, the fragility and extreme-bound (good or bad) in which privatization increasingly portends a nation at the slightest economy turn or twist either caused nationally or internationally is one of many factor that counterbalances its benefits to an economy. In other words, privatisation unavoidably leaves a country’s economy to skate on a thin ice. That is, any nation who can safely skate on thin ice at length may indeed go far with privatization. However, in a socioeconomic and environmental global warming age or condition of the universe, the chances are even slimmer for a nations to skate due to higher risk of breakage or melting of ice.

Advanced economy like USA, Japan, Australia or Singapore have been able to manage privatization to bring out the best in it, even though their economy is highly susceptible to any economical vector or disease. Notably, these developed countries or economies are featured as highly vulnerable and powerhouses of economic downwardness, depression, recession and crunch that spread like wide fire across the globe upon their ignition.

Comparatively,  our economy do not share the same caliber of testimony with the advanced economies  when it comes to privatization because of a lot of factors that are foundationally missing or present the Africa and Nigeria in particular-the giant of Africa. Resultantly, we have been on receiving side of privatization   because we have been more of victim of private sector than a victor due to the inherent or prevailing socioeconomic and environmental conditions that have turned the table against our inclusive and sustainable economic growth.

Corruption seat at the helms of some inherent or prevailing conditions or factors that have made Africa more of a victim of privatisation than a victor. In a carrot-stick-like approach, it is held on of side that a predominantly privatized economy usually do not have large black markets (a haven for corruption), while it is held on the other side that privatisation over-driven government increasingly leads to or boost business lobbying with government. The art and act of business lobbying with government is the kitchen-house for corruption.  This is the slaughter room where a nations shortchanged in the event that the whole righteous essence and intent of privatization goes derailed. Corruptions is now been disguised under privatisation in the developing economy. A huge number of sector in the nation that have been privatized have been fraught with irregularities and saturated with fraud. Private sectors are now both active and passive aide for corruption when cross-examined with public sector.

In a corruption free nation and where the private sector is performing up to expectation, there is not many things wrong with government making the most money.  Bearing in mind that a corruption-free movement minimises wastes to barest via prudent management, there is a lot potential under to centrally-planned economy to have shared-property or a narrowed  gap between common person and wealthy-equitability-  which are major ingredients  for inclusive and sustainable economic growth. After all, public sector or government in the nation is saddled with the major responsibility of creating employment and empowering its citizen – reducing economic fragility.

Underperforming of the economy:  there’s been a grave underperformance of the private sector in the country as it aim and expectations have not been met even at the barest minimal.  In a country where private is been allured, massaged or panel-beaten to take the upper hand of the economy, it’s naturally expected they take the lead role in employment and empowerment of the population, particularly, women and youth. But this is just not the case with Nigeria and the African continent at large. The unemployment rate of the nation is rapidly on the increase which has caused Privatization thought meant to be more of curse than a blessing to our economy.

In comparison with advanced economy like America, the private sector has been commendably responsibility for increase in employment rate and empowerment of the population, particularly, women and youth. The likes of Google and Facebook among the host of others have employed and empowered thousands of nationals and internationals. The reverse is the case with private sectors as only the public sector have been able to recruit labor substantially.

For instance, although the 2014 Nigeria Immigration Recruitment exercise ended up as tragedy because of overcrowding, impatience and stampede at the venue that lead to the death of over 18 persons , the sector received over 6.5m Nigerian applicants from all 36 states of Nigeria (including the FCT) for the 4000 vacant positions in the Nigeria Immigration Service. In the same way, ministries or public sectors in the country are not just the highest recruiters both at once and from time to time. Just recently, President Muhammadu Buhari unveiled Federal Government’s plans to recruit 10,000 policemen 2 years after the last recruitment by the Nigeria Police Force.

Equally privatization has ushered in a costly socioeconomic and physical environment which has energetically stirred up a non-inclusive and unsustainable economic growth as majority of population cannot afford good standard of living and source of livelihood. This is culminated in the huge shortfall in the projection, per phase or time, before and after the sectors of the nation are privatized.

The private sector have been delinquent and deficient in both its corporate and non-corporate responsibilities to the nation’s economy. For example, the rate of illiteracy has soared high in the country because of the increasing number of private universities (unaffordable by majority of the population) that are taking over the public higher institutions.

Equally, on the general, the private sector have been inefficient and ineffective in organization of production, distribution, and consumption of goods and services to meet people’s needs and ever growing wants. Thus, instead of advancing and leveraging the economic sectors, they are rather retrogressing and diminishing the nation.

Under-ageing of the economy: Analytically, the methodology at conception and during nurturing stage of privatization in our nation and continent is erred. How do I mean? For privatization to bless any nation it must come after (or at a stage-in-progress) the public sector have parented and paced the nation’s economy very successfully and sustainably. In other words, for timber to replace an iron rod it the place of construction, it has been a well-seasoned one.

Proverbially, a father hands over his estates to his son only when the son have been adequately parented and have come of age to manage the earned or created wealth of the father successfully. In the event when the father choses to hands over his estate to his son who is underage and do have the right moral and technical-know-how to sustain the wealth, we know from all likelihood that outcome is going catastrophic like the story of the prodigal son.

In the same light, when the motherly responsibilities of the public sector is given to the underage daughter of the private sector, this is more or less an abuse to the economy. More pathetical is the wrong inducing of the underage daughter to economically give birth or outperform her capacity which is even worsening to the economy.

Therefore, in an economic system like Africa, where the private sector (a driver wealth accumulation and inequality) is increasingly taking over public sector (a driver for even-growth or shared-prosperity) with the underlying condition that  private sector is unable to deliver on the right moral and technical-know-how to sustain the wealth of the nation either because it has been poorly parented by the public sector  or due to its own negligence, the economy is dead- bound to drown in  the oceans of hardship and instability.

Private sector, especially in its primitive stage as in Nigeria and Africa is incapable of bearing the yoke to redeem nation’s economy without a backlash or major side effect. Most recession or depression prone economy are fundamentally caused by this foundational mistake they make of putting the cart before the horse or situation best described in Nigeria as   ‘water don pass garri’. The substitution or mismatching of one sector’s maturity for the other has been reason for the often economy capsize know with our nation as the private sector needs to be thoroughly bred before it is given a broad room in the space of economy.

At this pre-nurtured stage of the private sector, it is dangerous for them for obvious and hidden reason, to carry the major part of the economy load. This of course, will lead to musculoskeletal disorders or defect under the ‘ergonomics of the economy’. In other words, private sector can play useful role in raising the bar of economy nationally and internationally but cannot doggedly play a critical role in holistically bringing the nation out of the seemingly bottomless economic ditch she has found herself. That is, the private sector at the growing age can play tangible role in accounting for marginal profit and not the major profit of the economy.  They are more or less the icing on the cake but not the major constituent of the economic cake itself.

The public sector has the strength to go through broad-base economic exercise that thoroughly and originally contribute to building the physique and features of our economy development, the private sector might rather go through easy way of having a body implant or use of steroids which is ultimately backlashing by nature. As such, nationally or continentally, private sector can be sad to be at the lava stage therefore making their capacities for solution short-termed or quickly outlived as they do not stand the test of time. Hence they should be allowed to develop properly until they can fly like the butterfly.

Developed economies of the world by virtue of privatization, like America, are successful at it because the trees of the public sector have grown successfully enough to bear its fruits as the private sector that are equally doing well or out doing the parent, public sector.  They didn’t put the prince before the king while the king is still very much alive and of vigor. The prince of the economy must wait for its own to time to be king of the economy, if a nation is to have an inclusive and sustainable economic growth. An untutored and indiscipline youthfulness, when given some power of control, may wreck the entire destiny of a generation.

However, some justifiable exception might be in the case the where private sector fill in the uncovered or unmade-up gaps of the public sector but they are not to occupy the whole or major outlets of the economy. At times when the public sector go frail or are economically shorthanded, the private sector (though at the not fully grown stage) can actively stand- in for them in the economy. Other times, it could be in be case where public wants to retire some sectors at the true interest of the economy. there could be many more justifiable socio-economic conditions.

Under-diversification of the economy: Private sector have perfected the state-of-art of under-diversifying our economy which has increasingly lead to a non-inclusive and unsustainable economic growth of the nation and continent at large.  The diligent positioning, of the private sector in the nation to assume the credibility of turning around and resuscitating the nation’s public major economic outlet like oil refineries, and power sector is equally backlashing.

It is disappointing that the Private sector rather than focusing on delivering its prioritized duty of diversifying the nation’s economy, actively results to and relies on   appropriating the inadequacies of the government or public sector as its first call of action or duty. Increasingly, Private sector are focused on trying to poach the shoes of public sector in an effort  earn relevancy  and contribute  to the economy, rather than  brace up actions, assemble an economic strategy that would articulate divestment economic policy and urgently retrace the footsteps of the nation from the economic pit that lies ahead of it.

In Contrast, privatisation in advanced economies have diligently diversified their economy with technology while developing economies are merely succeeding at appropriating the achievement or underachievement of the public sector that have been handed-over to them either genuinely or otherwise. As such, it is heinous and deleterious to the nation for private sector to do away with the challenge of fulfilling its first call of diversification of the economy   upon which they rode to economic relevance and earned economic integrity and the scorecard of nation development.

The integrity of privatisation of the economy is borne on originality and not otherwise. They are not recast the existing economy but to build a new one. They are to develop new frontiers of the economy and not necessarily to redress the existing ones. Contrarily, the private sector, rather than charging the public aright and helping them fulfil its role in parenting adequately, aid the public sector in covering its wounds at the entire detriment of the nation. This has led to the unavoidable economic downturn predominant in our nation and have caused non-inclusive national development that is anchored on non-diversification or under-diversification of the economy.

The private sector is meant to get out of its comfort-zone and go into the economic wilds to create and develop opportunities that are truly worth diversifying the economy. They ought to bring into life a non-existing economic outlet for the nation’s economy. There a lot of untapped economic outlet that private sector have side-lined rather than embrace, instead they are filling up for the irresponsibility, ineffectiveness and inefficiency   – under diversifying the economy of the nation. They are to make haste in activating various economic outlets that are yet to be harnessed or discovered as under-diversifying of the economy have bolstered the crippling of foreign and domestic investments and continued slide in the money and capital markets of the economy.

Generally, these factors; corruption, underperforming the economy, under-ageing of the economy  and under-diversifying of the economy among other inherent factors have greatly contributed to the fragility, vulnerability, volatility polarity and instability of the economy that have unfortunately resulted in the negative effects and anomaly of short-changing the nation and the welfare of the people .Hence, defeating the most important purpose and whole benefitting essence of privatization as it the said that  fragility of our society, policy and economic condition is on the rise with over 53% of African nations categorized to be in fragile state.

The aforementioned factors demands high technicality which economies like ours cannot adequately and readily provide. These high technicalities jointly contribute in  making the cost of running economy high that the  nation or content  cannot continually meet on demand basis, therefore to leading to  non-inclusive and unsustainable economic growth. Today in the developing nations, privatization have plague the nation with various  ill-socioeconomic vices like ;mismanagement, lack of transparency, social and economic insecurity, marginalization of females and youth, high-cost of doing business, inaccessible and unaffordable financing, infrastructural deficit, energy or power  deficit, unemployment, whacky implemented   policies, marginalization of rural development, general economic instability and lopsidedness, that have cumulatively championed  our continent’s  economy , the highest of  the world’s poverty.

In corollary, private sector are succeeding truncating the economy as privatisation is said to be upwardly responsible and contributing to the hounding of labourers or worker for inflated concessions, allocations, jobs and other socioeconomic malpractices that are making the nation fertile for heavy financial sleazes, especially when considering the absence of appropriated and articulated clear-cut economic policy for the inclusive and sustainable economic growth. In other words, at the Policy level, ought to be increasingly unacceptable, notwithstanding the reasons being adduced, for private sector to lopsidedly oversee the economy the erratic ways it is known with –taking over all the nation’s major economic outlet without adding or giving back value for the people and the nation.

Though the nation ought to be receiving the dividends and enjoying the gains of privatisation, she is been stung by it as a socio-economic bee. Instead of contributing to the steadiness of the economy, they create for discontinuity because when the government is not working diligently and righteously, revenues wouldn’t be used to create infrastructures that ordinarily bring about share prosperity and equitability in the nation.

Thus, a good measure of things have to be put in place in our economy so that private sector hither to privatisation can deliver rightly on its promise of inclusive and sustainable economic growth. In truth, if the sector is well managed in the hands of well informed and experience economy surgeon, it can amount to exponential growth of the economy. It can change of position from the economic behind that we are to the front line.

As a reminder, a centrally planned and governed economy can stir sustainable –effective economy as it marries a low cost of living and high standard of living which go a far distance in creating share-prosperity and equitability driven infrastructures.  Though Competition (private sector) brings out the best in people, it equally brings about the exploitation of people which is phenomena in this part of the world. However, cooperation (public sector) is the best way for people to coexist, that is live sustainably (socioeconomically and environmentally) as centralise system of economy create opportunity for citizens to explore non-economically-productive pursuits.

Conclusively, the question as to which one of government or economic system is most favourable for inclusive and sustainable economic growth is a question of shadows. The real question ought to be asked is the underlying conditions that is prevailing in either cases- the public sector having the upper hand of the economy or the private sector. As such, rather than be political or socio-economical antagonist by wrongly   taking advantage of move of President to reclaim public sector, we as compatriots should know better that feasibility and viability criteria for any government or economy system to optimise inclusive and sustainable economic growth remains checkable under microscopic lens of; corruption, under-diversification of the economy, under-aging of the economy and underperforming of the economy among other factors. Perhaps, we may also correspond much better with the one economy –one account system of the new president.


Leave a comment

No comments yet.

Comments RSS TrackBack Identifier URI

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s