the political economy of nigeria and the search for elite

The Political Economy of Nigeria and the Search for Elite Consensus

Olufemi AwoyemiSeptember 4th, 2021

We have allowed the bearers of bad news

become the pallbearers of our

happiness.

We have for too long focused on the plant

instead of the soil and must now realize

the uncomfortable truth - that we cannot

build a thriving economy without a

thriving society.

My task today is to make that case.

The process of political and economic development of the countryhas been held back by a myriad of factors. In a multi-ethnic statesuch as Nigeria, the notions of cultural separatism and internalcolonialism comes to the top, and they tend to become apparentin the government’s decisions on when, where and who getsaccess to resources and other socio-economic infrastructures insociety.

Over time, we have found it convenient to locate the origin of ourpolitical culture in the colonialists’ divide-and-conquer policieschampioned by Britain through its indirect rule strategy whichencouraged ethnic sentiments among Nigerians; by nurturing ourdifferences rather than our similarities.

Adp:Kalu, K. (1996)

The key question I hope a look at political economy will helpus appreciate is:• To what extent is this legacy from the colonial state a compelling

variable for explaining Nigeria’s underdevelopment in the 21st

century?

• Given what seems to be the leaderships’ general lack of regard forconventions and legacies, to what extent has these realities limitedour ability to build an elite consensus to get Nigeria moving?

• Pay attention to matters arising from the SPPG Solution Discourse 2titled "Competitiveness requires a firm focus on economicfundamentals; politics merely gets in the way".

Adp:Kalu, K. (1996)

Lesson Outline: Five things I wish to achieve

Present my Understanding of Political Economy (theory and conceptual clarifications);

Review Nigeria within the Context of Political Economy;

Discuss the Role of Elite Consensus in framing the Nigerian Economy;

Offer thoughts and recommendations on Political Economy and Elite Consensus in Nigeria; and

Respond to commentaries as best as I can.

01

Political Economy: Understanding the Concept…

Political economy emerged when Adam

Smith, David Hume and François Quesnay

refused to explain the distribution of wealth

and power in terms of God’s Will but

instead, appealing to political, economic,

technological, natural, and social

factors and the complex interactions

between them.

Political Economy… focuses on

how power is distributed;

how power is contested;

how resources are distributed;

the implications of power and resource distribution for

development outcomes;

formal structures that reveal the underlying:▪ interests that enable or frustrate change; ▪ incentives that enable or frustrate change; and▪ Institutions (rules, regulations etc) that enable or frustrate change.

Credit: Prof Dung Pam Sha PhD (2021) ‘

Political Economy Analysis enables us to:

Ask “why is the situation like this”?

How can the situation be changed or why haschange not happened?’

Who are the winners and losers of policy?

Design and implement programs which aremore likely to achieve results.

Study a country, a sector and a problemwithin a country.

Political Economy… use

Source: APC (2019)Source: Pam Sha (2021)

What is Political Economy, in essence?

Different groups in an economy have different beliefs as to how theireconomy should be developed; hence, political economy is thatcomplex field that analyzes structures, institutions and actors and howthey shape policy and overall development of nations.

Political economy is concerned with the interaction of political andeconomic processes in a society: the distribution of power and wealthbetween different groups and individuals, and the processes thatcreate, sustain and transform these relationships over time.

Simply put, Political economy is the creation of a balance between thestate and the market forces in a country.

Source: CFI and Pam Sha (2021)

..Speaking directly to matters arising from the SPPG Solution

Discourse 2 on:

"Competitiveness requires a firm focus on economic

fundamentals; politics merely gets in the way".

If your Political Culture and Institution(s)

isn’t premised on Accountability,

Performance Management and Rule of

Law…. It does not matter what your

economic fundamentals, resources,

prospects are… the country is

compromised ab initio.

"Competitiveness requires a firm focus on economic

fundamentals; politics merely gets in the way".

For developed nations (away from the factor base level)….. International political

economy studies has shown that Politics

and Economics are often, always in

harmony.

Example – France, USA, China

.

Political Economics sets the tone

for a sovereign’s

competitiveness; rejecting the

narrowness of economic

fundamentals and deploying an

interdisciplinary approach to the

problem of economic growth,

placing it in its socio-cultural and

political context.

Components of Political Economy

Political Economics is split into two sections:Classical Political Economy studies the works of philosophers such asMachiavelli, Adam Smith, and Karl Marx; whose thoughts flourished, primarily in

Britain, in the late 18th and early-to-mid 19th century. Adam Smith's The Wealth of

Nations (1776) is usually considered to mark the beginning of classical economics,

whose central idea is that free markets are self-regulating.

Modern Political Economy studies the work of modern philosophers,economists, and political scientists such as John Maynard Keynes, MiltonFreidman, and Friedrich Hayek. It is premised on the relationship that forms

between a nation's population and its government when public policy is

enacted. It is, therefore, the study of the result of the interaction between politics

and the economy.

Components of Political Economy

The study of political economy is influenced by game theory, as it involves different groupscompeting for finite resources and power that assess which policies will provide the mostbeneficial results. It also relates to the capability of the economy to achieve the desired results. Thestudy of political economy focuses on 3 major areas:1. Interdisciplinary StudyPE focuses on economics, sociology and political science to understand how economic systems, political institutions, and the environment affect and influence each other. The 3 areas in interdisciplinary study include economic models of political processes, the international political economy and how it affects international relations, and resource allocation in different economic systems.

2. New Political EconomyThe new political economy area treats economic policies as a belief or action that must be further discussed rather than as a framework that needs to be analyzed. It unites the ideologies of classical economics and new advances in the field of politics and economics. The approach dismisses old ideals about agencies and the interest of states and markets and aims to encourage political debates about societal wants and needs.

3. International Political EconomyInternational political economy study, also known as global political economy, analyzes the relationship between economics andinternational relations. It uses ideas from economics, sociology, and political science; and focuses on how states and institutions useglobal economic interactions to shape political systems.

Source: CFI (2021)

Political Economy Behaviour

Political economists are very interested ingains and losses incurred with theimplementation of a certain policy.

It gives them an idea as to which groupssupport the policy and which groups don’t.They also examine how individualsincrease their utility by participating inpolitical activity.

Capital and labour are used to influencepolitical processes and generate policyoutcomes with the most benefit.

Source: @CFI (2021)


The political behavior in an economy is shaped by:1. InterestsThey include the interest of individuals and groups who are able to use their powerto influence policy. Individuals in government tend to promote their own economicand political interests that will help them retain power while People outside thegovernment are often more concerned with the outcome of the economic policiesimplemented.

2. IdeasIdeas are considered an important influence on policy, in addition to economic andpolitical interests. It is assumed that individuals are self-seeking and rational andthat they are unable to assess the outcomes of all the choices available to them.

Source: @CFI (2021)


2. Ideas (contd’)Ideology allows an individual to decide what they should do in order to remainconsistent with their basic values and beliefs. Incorporating ideology into economicmodels allows some political action to be guided by factors other than self-interest.Some people want to enter politics simply because they want to make a change in theworld. If the political economy does not allow this, then the system shortchangesitself.

3. InstitutionsThere are political rules that include the Constitution and define how leaders arechosen and how a new policy can be implemented. Institutions help structureincentives facing individuals and groups within the economy.

Source: @CFI (2021)

Political Economy Theory

The modern PEtheories are split intothe followingideologies, namely:

• Liberal Political Economy (individualism, private enterprise,

profits, less state; less welfare etc)

• Neoliberal Political Economy (less state, privatization, private

sector; bail outs etc)

• Marxist Political Economy (class exploitation; class inequality;

state planning; social protection; classless society)

• Institutional Political Economy (rules and regulations, values,

etc affect political and economic outcomes and development)

• Feminist Political Economy (Society is class-based; state

institutions perpetrate inequality, gender inequality policy and

programming – more than half of the population left out; elite

women favoured)

Credit: Prof Dung Pam Sha PhD (2021) ‘

Free Market Economy

Free Market economy is an economic system which allows individualsto pursue their own economic interests and trade in a competitivemarket.It results into a fair price for goods and services.

It is associated with free enterprises, liberalism, capitalism, laissezfaire…

There is currently no pure market economy.

Examples of economies that practice near market economy are UnitedStates, Great Britain, Japan…

Command Economy

Command economy is an economic system where the governmentowns and operates the factors of production.

It is associated with socialism and communism…

Also, no nation currently practice pure command economy.

Examples of economies that practice near command economy areCuba, China, Laos…

Economic Systems in Reality

In reality, there are no pure markets and no command economies...For instance - in the United States and Great Britain, which areknown for market economy, government are still involved in socialsecurity, minimum wages, regulatory policies, and other areas.In China, despite the tendency towards command economy withstrict control of factors of production by the government, someprivate ownership of enterprises is allowed.Nonetheless, it would be misleading to say that US and China aremixed economies.This is because the definition of each has been moderated by the levelof/significance of government involvement.

Mixed Economy

Mixed economy is an economic system that combine the featuresof both market economy and command economy.

A mixed economic system protects private property and allows alevel of economic freedom in the use of capital, but also allowsgovernments to interfere (in varying degrees) in economicactivities.

Nigeria and many countries of the world, practice mixed

economy!

“The broad liberal objective is a

balanced and flexible mixed

economy… seeking to occupy that

middle ground between capitalism

and socialism whose viability has so

long been denied by both capitalists

and socialists.”

~Arthur M Schlesinger Jr

...has mixed economy

been viable for Nigeria

or is the problem

located elsewhere?

02

Nigerian Political Economy: The state of play…

Political Economy in Nigeria…access to power is everything

Both the government and private sector are involved in economicactivities, but…

Nigeria’s Scorecard as a mixed economy…

Source: Proshare (Sept 4, 2021)Source: @Chamberwwoh (2021)


Source: Nweke (2021)

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The public budget captures sovereign gameplan and is very critical in

achieving the goals & objectives of national development plans.✓ Government policies, programmes and projects in national plans are

implemented through the budget.

✓ Strong plan-budget linkage and sustainable funding of the projects

and programmes are necessary to achieve Plan goals and objectives.

Indeed, the public budget is very important in ensuring a well-functioning society and a competitive economy.Through the budget, the government provides public goods/servicesand a conducive business environment.

Source: Akabueze, Ben (2021)

Nigeria: The Political Economy Gameplay…


Source: APC (2019)

The government’s budget is a moral document; you can tell who andwhat a country values by examining its budget.Current FGN’s policy priorities include:✓ Ensuring national security;

✓ Investment in critical infrastructure;

✓ Investment in human capital development; and

✓ Promoting inclusive economic growth.

Considering current budgeting and programmes realities in Nigeria, it isimportant that we look at the challenges and steps being taken to addressthem by government; and hopefully showcase how the Political Economyhas played out; thus far.

35

Nigeria: The Political Economy Gameplan…


Budgets under the current Administration have been anchored on the

Nigeria Vision 20-2020, and the following:✓ Strategic Implementation Plan (SIP) - 2016;

✓ Economic Recovery and Growth Plan (ERGP) 2017-20; and

✓ Nigeria Economic Sustainability Plan (NESP).

The 2022 budget will be based on the Medium Term Development plan2021-25 currently being finalized.Budgets of MDAs are prepared using strategic planning approach, withProjects/Programmes linked to government policies and overarchingstrategic priorities in the development plans.

36

Nigeria: The Plan – Budget Linkage (1)…


Government Policy

Thrusts & Priorities

Sector’s Results

Framework

Sector’s Projects

Projects Scoring

& Prioritisation

Selected

Projects

• Objectives

• Programmes

• Outcomes

• Outcome

Indicators

• Baselines

• Outcome

Targets

Govt’s

Priority

ProgramsScoring

Criteria

Development

Plan

Prioritisation

& Selection

Process

ZBB

Policy

Strategy

Budget

This schema shows that the FGN budget is policy-based.

Nigeria: The Plan – Budget Linkage (2)…

Despite efforts, budget objectives have been very difficult toachieve.The infrastructure required to translate opportunities in theNigerian economy to economic value is in deficit.The poor development outcomes are traceable to severalbudgeting and financing challenges, including:▪ Inadequate revenues (leading to Rising deficit & debt levels);▪ Unclear delineation of respective constitutional roles of the

Executive and legislative arms of government in the budgetprocess; and

▪ Inclusion of too many projects in the budget, including somethat are not properly conceptualized, designed and costed, aswell as projects relating to matters that are theresponsibilities of state and local governments.

3838


Nigeria: Challenges (1)…

The indicators shown underNigeria’s Scorecard as amixed economy speaks tothis…

Other budgeting and financing challenges include:✓ Absence of an organic budget law, with clear timelines for presentation and passage of the

annual budget;

✓ Growing personnel and pension costs, accounting for unsustainable proportion of federalrevenues (>80%) and expenditure (>30%);

✓ Too numerous federal Parastatals, Agencies and Commissions (some withduplicated/overlapping mandates) drawing on the budget; some of these should also be self-sustaining;

✓ Weak performance management framework for Government owned enterprises/ revenue generating agencies;

✓ Input-oriented budgeting system rather than performance based budgeting;

✓ Weak project appraisal and selection by MDAs;

✓ Absence of a cadre of professional Budget Officers in the Federal Service; and

✓ Systemic corruption and abuse in the budget process.

3939



The biggest challenge I see however, is that of a PublicService no longer fit for purpose.

Efforts to change/reform at both the federal and statelevels has met with significant resistance frompowerful actors in the political economy.

To fix Nigeria, one of the most critical areas to be mendedis its broken public service. The public service mustreimagine and reengineer its role in supporting a growth-oriented private sector.

This will be a topic for another day, lest I digress.

4040


Presidential Directive:

▪Ensuring automatic deduction at source

of past due operating surplus

remittances from GOEs

▪Ongoing Presidential Revenue

Monitoring & Reconciliation Committee

▪ Integrated Revenue Monitoring

System (IRMS) to ease revenue

recognition

▪ E-Customs approved by FEC and

ITAS under post implementation

review

▪ TSA implementation adjudged by

the World Bank as the best in Africa

Has specific provisions that help

● Promote growth with the exemption of

small businesses from certain tax

obligations

● 50% on Cost-Revenue ratio for GOEs

● Expand focus on digital businesses

▪ Ongoing verification exercise with

IPPIS

▪ Implementation of service-based

electricity tariffs

▪ Introduction of Tax Expenditure

Statement in 2021-2023 MTEF to

dimension the cost of tax waivers

Initiatives to enhance Nigeria’s fiscal stability focused

on 4 areas:

▪ Sustainability in revenue generation

▪ Enhancing existing & creating new revenue

streams

▪ Cohesion in the revenue ecosystem

▪ Cost optimization and liquidity enhancement

Strategic

Revenue Growth

Initiatives (SRGI)

Passing the

Finance Act

Of 2020

Plugging

Fiscal

Drainers

Leveraging

technology and

Automation

Independent

revenue

monitoring

SOURCE: Federal Ministry of Finance, Budget and National Planning , BOF

41

Efforts to Improve Budget Financing…


My goal today is not to

debate on the economic

system as to which is

better…

..but to present evidence

on the political economy

of Nigeria leading to

these economic

outcomes!

On the political front…

The military handed power over to a civilian administration on 29

May 1999 with the inauguration of President Olusegun Obasanjo and36 civilian state governors.

Thus, Nigeria had direct military rule only for 29 of its 60 years as anindependent country.

But the re-emergence/regurgitation of old hands/retired generals inthe political space implies near total exit of populist politicians andpolitical parties of deep ideological expression from the partisanpolitical terrain.

On the political front…(2) cont.’

Nigeria has not been able to measure up to the basictenets of democracy and the tenets of federalism (orevolve one that works).

The major political parties (the ruling and the mainopposition) are constantly bedeviled by intra-partycrises and inter-party “trolls”. The differences betweenthem may just be in their names.

The crises are fueled by lack of party consensus, lack ofrespect for party constitution, party indiscipline,absence of an ideological philosophy and self-interests,among others.

On the economic front… this is the gap

Economic front… 1

After over six decades of achieving independence from thecolonial masters, Nigeria is still battling with the most basic needsfor human development… despite the endowment of resources.The Federal Government, State and Local Governments of

Nigeria as well as other sectors of the economy depend largely onthe oil sector… Nigeria remains an oil-centred economy.Yet, Nigeria’s oil wealth has not provided the needed stimulus for

growth. On the contrary, it has fueled political instability.The oil sector does not even provide stimulus for growth in the

other sectors of the economy… A paradox

Economic front… 2

It is convenient to say that the main feature of thecontemporary Nigerian political economy is centred aroundthe exploitation and marketing of oil.Nigeria political economy continue to suffer from poor

economic linkages between resource and non-resourcesectors.Nigeria’s undoing since the oil boom era has been its heavy

reliance upon oil and failure to diversify its revenue sources.Hence, Nigeria as a country has demonstrated contentment

with its status as a rentier state.

Economic front… 3

Earnings from oil provided the FGN with the financial resourcesto embark upon some developmental projects, but also paved theway for the rent-seekers to amass wealth.These rents make state offices attractive to elites wherein elites

compete among themselves for control... Knowing that using oilwealth to initiate development would be inimical to theirinterests… the outcome is elites disunity.

Yet, oil is not sustainable as fluctuation in international oil priceshave negative impact on the economy andOil dependence have also contributed to political instability and

collapse of true federalism in Nigeria.

Economic front… 4

Several attempts have been made to adjust and reverse this roleby the post colonial state and the elites that control and operate it.Few have success stories; others have stories of failures.Oil rents and their distribution have contributed largely to the

failure of Nigerian political economy.Researchers and analysts had observed that countries that

depend heavily on oil rents tend to perform poorly in politics andeconomics.But in Nigeria, the problem is compounded by ethnic diversity,

economic disparity, self-interest, and elite disharmony.

Nigerian Political Economy…

In an ideal state, development with resources flows through 5 non-linear stages:

1.Agenda-setting/problem identification2.Policy analysis and formulation3.Policy adoption/decision making4.Policy implementation5.Policy monitoring and evaluation

In a real setting, as it is in Nigeria, resource development have noflow… it is rather handicapped by deeply ingrained systemic barriers,overdependency on oil, diversity of voices, needs and interests,bureaucratic processes, constitutional arrangements, corruption, fiscalcrises and a myriad of issues.

Tackling Nigerian political economy challenge will have to go beyondthe economic system… Mixed economy is only successful when there ispolitical will to drive it.Everything in Nigeria is politics and rent-seeking; particularly, themanagement of the economy.Yet, the management of the economy is anchored on the politicalleaders and the political leaders are driven by politics (of ethnicity andclass) and self- interests.The political influencers (other elites) have themselves created aframework for corruption and rent-seeking where decisions andsuggestions are made in a bid to further reinforce a system of sustainedcorruption.

Nigerian Political Economy…

Governance, Leadership, Ethics: How To Build A Thriving Economy….

“…the Nigerian governance system was not

designed for an ethical leadership or

integrity based economic governance

that can thrive – one that holds its operating

parts accountable for the pursuit of excellence,

offers rewards and incentives for conduct and

has consequences for breach of the social

contract between the state and citizens.”

Source: Awoyemi, O (2019)

“Pain is Inevitable but

Suffering is Optional?”

..for the birds of hope are everywhere, listen to them sing..

What is the WAYOUT?

I found one – Elite Consensus

03

Nigerian Economy:The Search for Elite Consensus…

Where the state is perceived as serving the

particularistic interests of one group,

economic well-being is compromised and it

loses its legitimacy and people resort to other

levels of solidarity – religious, ethnic and

sectional – in search of security and well-

being...

“At this stage, history teaches us that it is the

preserve/responsibility of the few with

dispensation of wealth and privilege to set a

new course… “the Elite”

Understanding the Elite –State nexus…

Source: Olaopa, T. (2021)

In a paper on “How does Government work inNigeria”, Olaopa (2021) posits that whereas Governmentconstitutes the single most important element that drivesgovernance in the dynamics of running the business of thestate, the focus of scholars had always been on the origin,nature, legal/institutional frameworks and the politics ofthe state and government.

But with the contributions of implementationresearch to this conversation since the ‘70s, and muchmore significantly in the ‘80s, scholarly attention on therelationship between government and its public policyresponsibilities have increased

Governments and the People…


But more specifically, and since the ‘80s when thedemocratic wave started sweeping across the worldwith a redoubled wave for a range of reasons includingthe collapse of communism in the old USSR, thedemocratic imperative and attendant goodgovernance agenda and emphases have shifted thefocus more sharply on why there is a distinctdisjuncture between development vision, strategy,policy objectives and then development outcomes asquality of life and dividends of democracy

How Govt Functions…


In this conversation, the role of the state, its definition andredefinitions is also circumscribed by the relationshipbetween the state and the market.

Here neo-classical and institutional economics as well as thenotion of the developmental state, new public management,have done a lot in restructuring the circumference of the stateand in determining how government ought to functionin the aftermath of the different conceptual rethinking of statefunction.

This dynamic has iterated the role of the state such that itnow reads thus:

The provider of enabling framework for growth of the economy;

The institutional mechanism to empower the private sector as the engine of growth of the economy through its fiscal, monetary, investment, and trade policies;

The regulator that establishes the rule of the game and ensures that private gains are compatible with national social objectives;

The frontier shifter, that takes on high risks and high capital investments that may not be profitable at first for private gain; and

The burden bearer who assumes a welfare role through redistribution of wealth and social protection of citizens against vagaries of nature and the market.

61


How Govt Functions…contd


The State really, is an abstract concept, that must be understood relativeto such related concepts as society, nation and government.

To simplify such an abstract concept as the state, it is best to outline itsdefining characteristics namely, definite territory, definite population,sovereignty, functional government, unique basic objectives andfunctions, unique method and political system and loyalty andnationalism.

State therefore refers to a community of people occupying a definiteterritory, bound by a common law, having an organized government,and enjoying independence from external control; making it a sovereignentity, and by that fact, capable of entering into international relationswith other states in the globe.

The question therefore becomes “how can we focus the government designed to run the state to build capable institutions that are

going to deliver economic well-being?”

In a deeply divided nation-state, the absence of a National Consensusremains a fundamental issue in the country’s political and economic life.The existence of a multiplicity of ethnic, religious, linguistic and culturalidentities however, on its own; is not problematic until these identities aremobilised to shape political consciousness and actions.More often than not, it is the ELITE that give political meanings to theseidentities in their competition for power, resources and construction ofpolitical patronage; thus elevating it to a powerful force within ourpolitical economy and making it a determinant factor in shaping powerand politics in Nigeria.Thus, the most problematic limitation to development lies in the contextof co-existence of many nations/nationalities within a nation-state.

6363

Nigeria: Consensus Building Imperative…

Adapted: Egwu, S. (2021)

The absence of national and cultural homogeneity in a nation with sub-nationals at different levels of socio-economic development; has left us with a political

system that emphasizes existing differences; with actors inventing new forms of identities to discourage the

construction of across ethnic and cross-cultural ties.

“Rather than grow the nation, we have grown the base of “conflict entrepreneurs” who politicize existing

differences, and promote the convergence of livelihood pressures, poor governance, demographic pressures and

increasing marginalization of greater sections of the society.”

Adapted: Egwu, S. (2021)

The Divide in the Economy…

There are two classes of people in any nation:

One group are men with formal authority and power whosedecision in diverse ways and varying degrees, have an influence onthe activities of the society – the governing class.

The other group are men with limited (or non-existent)institutional power and whose way of life is of considerableinterest - the common people.

Source: Alberoni (2007)

An interwoven interests of the leaders of the military, corporate,religious, traditional and political elements of society; or asmall, cohesive and closely-knit minority who draw their power andinfluence from specialized knowledge and skill to control commandingpositions in the society.

The Elites are persons who, by virtue of their strategic locations inlarge or otherwise pivotal organisations and movements in the society,can shape the ideological and philosophical directions of theirsocieties.

In simple terms, Elites are a sub-set of the population who have thecapacity to influence political outcomes.

Source: Egwu, S. (2021) and Ojukwu & Shopeju (2010)

Who are the Elites?

The Elite Theory

The Elites engage in or encourage an adversarial and divisivepolitics to mask their quest for power and resources as that oftheir ethno-religious constituencies.The question therefore is: who are the elites? The notion ofelite and elite theories were popularised by mainstreamwestern sociology in the 1950s and 1960s following the worksof C. Wright Mills (The Power Elite; 1953), Robert Mitchels(The Iron Law of Oligarchy) and, subsequently, GaetanoMosca and Vilfredo Pareto.

Source: Egwu, S. (2021)

Elite theory envisions society as divided between the mass of peopleand a ruling minority, where the political power–the power to takeand impose decisions valid to the whole society always belongs to thelatter.

Well popularised from the 1950s, elite theory is ideologicallyconservative and challenges the whole idea of pluralist democracy wellcanvassed by writers like Robert Dahl.

It appears from all the tendencies within elite theory that it seeks todeal with the question of who governs in the society andexercises power despite the prevalence of democratic theories at thetime.


Why the Elites Matter (1) conceptual clarifications

It therefore not surprising the idea of the elite is often inter-changeably used with the idea of the ruling or the governing class.The idea therefore converges on the role of the political elite andspecifically those who make decisions and influence public policy.Elite theory also challenges the Marxist theory of class and conflict(explicit in Pareto and Mosca); only envisages circulation of elites andenvisages the rule of the elite only (Mitchels).It suggests further that given the reality of persistence and circulationof elites, genuine democratic systems are impossible because ofexistence of self-interested elites who will outwit and manipulate themass.



The 20th century American economist, Joseph Schumpeter redefineddemocracy as nothing more than electoral competitionbetween elites vying for popular authoritarian rule.

Elite theory of ethnicity posits that the elites are the main interestbearers in the use of the ethnic card, and, therefore, it is a part of thetechnology of power they deploy in competition with other elites.

In framing the conversation around the political economy and itscompetitiveness, it is more useful to focus on the role of the African,nay Nigerian political/ruling elite rather than the elite in general.



Issues with the Nigerian Elites (1)…

The African political elites are different from their East Asiancounterparts given their development trajectory and the pivotal roleplayed by the Asian political elites in catalyzing economic growthand broad-based development. The African political elite inheritedpower from the colonialists, but supplanted foreign interests withtheir class interests (see Fanon’s lamentation).

In the Nigerian context, responding to colonial politics of divide andrule and the regionalisation/ethnicisation of politics, they failed tobuild cross-ethnic and cross-regional political parties in the strugglefor independence.



The elites in Nigeria have morphed into a “Cabal”: A non-rule-basedarrangement where the non-state elites inform and influence theruling elites.

Nigeria’s deeply divided society operates a ‘tripodal’ ethnic structureupon which ever other thing is organized.

Of the over 400 ethnic groups (Otite, 1990), the 3 defined as ethnicmajorities constitute 57.8% of the national population, while 11 ofthe largest ethnic minorities put together constitute 27.9% of thepopulation, according to the 1963 census.



The ‘tripodal’ ethnic structure ensures that each of the threemajority ethnic groups constitutes a pole in the competitionfor political & economic resources and a source of instability.

Consequently, the ethnic minorities are forced to form abewildering array of alliances around each of the threedominant ethnicities.

The ethnic, regional, and religious cleavages in Nigeriansociety are made more problematic by systematic andoverlapping patterns of inequalities that correspond to thecleavages.



The interplay between this tripodal ethnic structure andadministrative divisions and communal identities has led to eightmajor cleavages in Nigeria. For example:• 1) the cleavages between the three majority groups;• 2) between the three majority ethnic groups on the one hand and the

350-odd minority ethnic groups on the other;• 3) between the north and south (and the sub-regions);• 4) between the 36 states of the federation and the six zones – three in

the north and three in the south; and• 5) between different religious affiliations.

These cleavages overlap.



These inequalities are caused by a complex range of factors, includinghistory, geography, cultural orientation, religious affiliation, naturalresource endowments, current government policies, and past colonialpolicies.For instance, structurally embedded pattern of educational inequalitiesfrom the colonial period have been reproduced in the inequalities inmanpower and human capital development across the country. It was

reported that the northern zones with 53% of the population had only 10% of engineers, 15% ofprofessors, 10% of architects, 25% of lawyers, 8% of bank executives, and less than 2% of insurancepractitioners (Adamu 2003).

While factors like motivation, cultural disposition and geographicalopportunities explain economic inequalities; poor implementation canreinforce.


Nigerian Elites…

The Search for Elite Consensus… Positive, First 11

My belief is that if few (elites) in Nigeria have the power to controlthe course of Nigerian political economy, the direction of change islikely to depend on the route set by these elites.

The consensus among scholars and analyst is that an agreementbetween the elites is needed and long overdue for the developmentof Nigeria – agree on power, allow competence to drive governance.

For the elite consensus to bring development, it must be positive,protect the commonwealth, align with good governance, and iscentered around creating greater wealth for the nation.

The Search for Elite Consensus… a caution

The slow pace of development in Nigeria cannot be necessarily attributed

to the lack of elite consensus.There are elements of implicit elite consensus in Nigeria.The consensus is, however, based on negative, rent-seeking, corrupt, andanti-development extractions.For instance, the 1951 Macpherson’s Constitution was based on eliteconsensus. However, the regional elites were suspicious of each other.They had no trust in each other.According to Prof. S. Egwu, elite politics and construction of politicalpatronage through ethno-religious networks and politicisation ofIdentities largely shapes political consciousness and actions in Nigeria.

The Search for Elite Consensus…

Within the context of political economy in Nigeria,positive elite consensus remain a far cry…The real issues are:▪ Can Nigeria elites ever reach a beneficial consensus?▪ What can motivate the elites into a consensus?▪ Who can persuade them into a consensus?▪ What approach can they adopt to reach a consensus?▪ What should be the direction of the elite consensus?

The Search for Elite Consensus… to get the consent

I believe the elite consensus must precede any nationalconsensus on developmental issues. It narrows the scope of theissues based on the experiences and views of the elites.Such elite consensus must necessarily be advanced by a great

persuader. Some of the options for persuasion are:▪ Offer financial reward;▪ Create incentives (or threats) to the interest of the elites;▪ Use moral suasion; and▪ Increase the decibel of the discourse.

The Search for Elite Consensus…building consensus

Tim Hartnett (2011) proposed 6 principles of building consensuswhich can be applied to the elite consensus…

1. Everyone: All elites are involved.2. Participation: All elites get the opportunity to contribute.3. Agreement: Generate as many agreements as possible and reach a

full agreement.4. Process Oriented: Emphasis on decision making process not results.5. Cooperation: Personal interest suppress for group insights.6. Group relationship: Achieve mutual trust, respect, and group

cohesion.

“Only Elite

Consensus Can Save

Nigeria, Not

Democracy, Not

Military.”

~Tope Fasua

04

Thoughts and Recommendations:This will work…

…Edison's electric light

did not come about

from the continuous improvement of the

candle...

Innovation & Resilience is more about

Re-imagining…... the competitive

advantage

Elite Consensus / Leadership

The Nexus: Thriving Society = Thriving Economy….

…We need to protect our leaders from

themselves; their notions of leadership are in

direct conflict with society’s need for forward-

looking, adaptable and creative mindsets willing

to think the incredible and pursue the uncommon.

This requires an elite consensus on the nation-state, starting from ‘low-hanging fruits’ as simple as upgrading internal government processes and

procedures to allow for efficiency and effectiveness.

How the absence of Elite Consensus on leadership and governance has impacted our economic development:

A Culture of “Like Man, Like State”

A Culture of Militarized Mindset

A Culture of Appeasement

A Culture of Negative Signaling and Fear

Absence of accountability in the LeadershipRecruitment process

Business & Models Have Changed – Governance Must Change

Spotlight on some innovative political economies…success stories across the world… leadership took them there.

Singapore: It adopted Managing Diversity and Multiculturalism

Malaysia: Used Performance Management and Delivery Unit

Georgia: used Business Oriented Service Delivery in the PublicSector - Silence is Consent and One Government..

UK & USA: - Applied Behavioural Science in Public Policy

Rwanda: Created An Investment Enabling EnvironmentSource: Nweke, F. (2021)

1. Resource Control and distribution… 1

Over-centralisation of resources is a major cause of thedysfunctional nature of Nigerian political economy… heavytop is not a good approach in a federal system.The concentration of resources at the center has resulted into

high degree of inequality as well as dependency of state andlocal governments on federal allocations… with little (or non-existence) of internally generated revenues across differentstates.This automatically make states and local governments rentier

states.

Resource Control and Distribution… 2

The political framework instituted to resolve Nigerian political

economy issues has become part of the issues.The 1999 constitution was created by and for the military system.It favours centralization rather than decentralization.It has failed to unite Nigeria. A new social contract is required.▪ Thus, the first point of call to resolve the challenges of the Nigerian

economy is a constitutional review.▪ Nigerian political economy needs to also emphasize revenue

generation rather than revenue distribution.▪ The system needs to favour backward and forward linkages of the

energy (nay oil) sector to the economy.

2. Leadership rReform… Elite Consensus

Nigeria needs to resolve its leadership crisis. I see two optionsopen to do this…i. The emergence of a new crop of leaders distinguished by

managerial sophistication. This will deepen and consolidate thecelebrated positive economic growth leverages to ignite deepstructural transformation. or

ii. An elite consensus with pro-development values, norms, andideology.

If it is easy to get new and sophisticated leaders, it would bebetter. But in the meantime, I will favour an elite consensus.

Why favour elite consensus?

Given the existing political economic structure in Nigeria and howthis has affected resource distribution, as well as the depth ofNigeria’s diversity in ethnicity, religion, education, and wealth, therewill always be heterogeneous ideologies even among new leaders.A viable approach to address these issues would be a national

consensus… to resolve the ethnic and religious divides.However, based on antecedent, national consensus will only be

successful, if it is necessarily preceded by elite consensus.Therefore, initiating (positive) elite consensus would promote

positive outcome for Nigerian political economy like in the spotlightcountries.

Source: Nweke, F. (2021)

Recommendations:

Other areas where elite consensus is needed

Recommendations:

Creating a Government of the Future: Paradigm Shifts

Source: Nweke, F. (2021)

Nigeria must

necessarily

initiate elite

consensus around

values and

ideologies that

promote economic

development.

We are not going to achieve

a quantum leap by

embracing a tunnel vision

….

..we will make mistakes, have false steps but we must recognise that this current state is NOT another crisis… it is a disruptor

in our governance model…

We must dare to RE-IMAGINE!!!

Comment & Response Session 05

References / Acknowledgments

CFI “What is Political Economy” https://corporatefinanceinstitute.com/resources/knowledge/economics/political-economy/ - Retrieved 03/09/21Sha, Dung Pam (2021) ‘The Political Economy of Policy and Programme Implementation in Nigeria’, a paper delivered atNIPSS, Kuru, SEC 43Egwu, Samuel (2021), “The Elite, National Integration and the National Question”, a paper delivered at NIPSS, Kuru, SEC 43Babalola, Dele (2019), “The Political Economy of Federalism in Nigeria” ISBN 978-3-030-05493-9 (eBook)Olaopa, T (2021) “How Does Government Work in Nigeria?”, a paper delivered at NIPSS, Kuru, SEC 43Rustow, D. (1970). Transitions to Democracy: Toward a dynamic model. Comparative Politics, 2(3), 337–363.https://doi.org/10.2307/421307 - Retrieved 02/09/21Hartnett, T. (2011). Consensus-Oriented Decision-Making: The CODM Model for Facilitating Groups to WidespreadAgreement. New Society PublishersFasua, T. (2021) “Nigeria Needs an Elite Consensus” https://www.proshareng.com/news/Nigeria%20Economy/Nigeria-Needs-an-Elite-Consensus---Tope-/58802 - Retrieved 03/09/21Alberoni, F. (2007). The Powerless Elite: Theory and Sociological Research on the Phenomenon of the Stars.https://doi.org/10.4135/9781446269534.n8 - Retrieved 02/09/21Ojukwu, C. C., & Shopeju, J. O. (2010). Elite corruption and the culture of primitive accumulation in 21st century Nigeria.http://www.academicjournals.org/IJPDS - Retrieved 02/09/21Adedamola, A. (2010), Building Elite Consensus In Nigeria http://cpparesearch.org/nu-en-pl/building-elite-consensus-nigeria/ - Retrieved 04/09/21Akinbode, A. (2017). Building Elite Consensus in Nigeria. http://cpparesearch.org/nu-en-pl/building-elite-consensus-nigeria/” – Retrieved 04/09/21Nweke, F. (2021) “The Economics of Policy and Programme Implementation in Nigeria”, a paper delivered at NIPSS, Kuru,SEC 43.

https://corporatefinanceinstitute.com/resources/knowledge/economics/political-economy/

https://doi.org/10.2307/421307

https://www.proshareng.com/news/Nigeria%20Economy/Nigeria-Needs-an-Elite-Consensus---Tope-/58802

https://doi.org/10.4135/9781446269534.n8

http://www.academicjournals.org/IJPDS

http://cpparesearch.org/nu-en-pl/building-elite-consensus-nigeria/

http://cpparesearch.org/nu-en-pl/building-elite-consensus-nigeria/

Thank You

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