https://medium.com/vox-nigeria/i-know-my-people-fc9eaf2bd0e#.oc9guu1tz


Feyi Fawehinmi


Recently I was discussing Nigeria with some friends and I asked them this question — China protected its cement industry and ended up with more than 2,000 cement firms and probably the cheapest cement in the world. Nigeria protected its cement market and ended up with one guy controlling roughly 70% of the market and one of the highest cement prices in the world and the world’s most profitable cement company.
You won't find many economics textbooks or economists talking about culture these days. It is no longer part of mainstream economic thinking because it is such a loaded concept that can get out of hand quickly, especially in the hands of racists with an agenda.
But nothing stops a Nigerian from talking to another Nigerian, honestly, about the role that culture plays in shaping policy outcomes. The x in the question above is culture. It is the elephant in the room.

I Know My People

When you combine government with any type of business in Nigeria, what you get is rent seeking and cronyism, 99% of the time. This is perhaps not unique to Nigeria but the pervasiveness of it is quite something to behold. Government is not there to protect Nigerians from the excesses of businesses by enforcing proper market competition. Far from it. Instead, government is a tool by which one person captures the institutions of state to give them an advantage over their fellow Nigerians.
This plays out in comical ways sometimes. On twitter, I’ve been using the hashtag #CabalAlert to document some of this behaviour. People are forever organising themselves into all sorts of funny groups to obtain government ‘support’ in a way that allows them get rid of their competition, shaft consumers, raise prices and avoid the hard work of innovation. They also always want ‘intervention funds’ from the government, always.

I Know My People

I’ve almost finished reading Ron Chernow’s amazing biography of John D. Rockefeller - ‘Titan’. One thing that caused me a great deal of amusement was how, as Rockefeller built his monopoly of the oil industry to 90%, his kerosene prices continued to fall and fall. He crashed the price of kerosene from 58cents per gallon to 8cents per gallon. I kept asking myself — what kind of yeye monopolist is this one who was crashing prices as he owned almost the entire industry? In 1885, Rockefeller wrote to one of his partners and said ‘Let the good work go on. We must ever remember that we are refining oil for the poor man and he must have it cheap and good’. Please note that this guy was by no means a saint. His company used to bribe politicians and he used some very rough tactics to consolidate his hold on the industry. But he continued to innovate in amazing ways and lower his prices even when he could get away with doing the opposite.
Ask yourself an honest question — if you give a Nigerian 90% of any business in Nigeria, what do you think will happen? The tendency is for Nigerians to take advantage of themselves. This is the cultural elephant in the room. As a consequence, nobody trusts anybody.


I Know My People


I’ve previously used my mother’s experience buying a car from Peugeot Automobile Nigeria (PAN), Kaduna as an example. In the early ’80s, she managed to save up enough money to buy a brand new made in Nigeria 504. It cost around N20,000 at the time. She then handed the money to PAN and was told to wait around a year to have the car delivered. Imagine how that felt for someone who needed a car and had committed all her savings towards it? After much begging and using the influence of a senior Airforce officer who had connections in PAN, she managed to get the car delivered in 6 months.
PAN’s arrogance in those days was unbelievable. They did not give a damn about consumers. They treated you like they were doing you a favour and on a couple of occasions, they even told her to come and collect her money back and stop disturbing their sweet life. They could get away with this kind of behaviour because 504s and 505s were the official cars of government. Every year, the government was guaranteed to buy a certain number of cars so ordinary consumers like my Mum could go hug a transformer. Of course, the moment there was a change in government policy, the company died in no time. Last year, I was in Kaduna and I drove past the PAN factory where she got her car. It looked like one of the Lost Kingdoms in Tomb Raider. It is now a patient in AMCON’s intensive care unit (the treatment is being paid for by Nigerian taxpayers as usual). But when you ask Nigerians, they will tell you that the company failed due to lack of government patronage.


I Know My People


This familiar spirit now has Innoson in its sights. Senator Ben Murray-Bruce, armed with a hit hashtag — #BuyNaijaToGrowTheNaira — has been ‘inspiring’ a previously rudderless multitude on twitter and social media as to how the difference between pap and Quaker Oats is all in the head, among other things. It’s just common sense! Nigerians are lapping it up. The missing ingredient from economic growth was apparently patriotism. Pumped up with adrenaline and the smouldering embers of patriotism in their hearts, the people are going to buy their way out of this economic crisis.


I Know My People


Ideas have consequences, for better or worse. The Senate President, Bukola Saraki, has also jumped on this hashtag and the thing has even found its way to CNN. The Senate has found the ‘solution’ (to a problem that did not really exist), and soon enough, anyone who dares to challenge the wisdom of the hashtag will be branded an unpatriotic apostate.
Meanwhile, the real problems afflicting Nigeria which require hard decisions will remain in their ‘tear rubber’ state. Note that Nigerians will not themselves really buy these products in any significant numbers. Afterall, nothing was stopping them from doing so previously. What people are calling for is for the government to ‘encourage’ these local manufacturers by patronising them. The approach makes zero sense but let’s all play along. For the Senate, it helps them kill two birds with one stone. They want to buy new cars for themselves, something that has angered Nigerians in these difficult times. But by tapping into the red mist of patriotism, they get to buy their Innoson cars while avoiding criticism at the same time.
For Innoson, the new favoured child, it’s also a win win. They can even sell the cars to government at a markup without worrying about feedback. They will simply divert the resources they could have used to serve consumers in a rational manner to serving the government. And a new crony will be born. It is always sweet while it lasts and it is only a matter of time until they start treating their ordinary customers like shit. (FWIW, I wrote this on Innoson 2 years ago).

I Know My People

Nigerians do not want to confront these cultural obstacles in their way. We are special people! Nobody is asking the question as to why identical policies end up very differently in Nigeria. Generations of Nigerians have grown up with these ideas that have never been challenged before. The moment their ideas then get challenged, they get upset. There is no day now that someone does not accuse me of lacking home training on social media.
People believe government to be a magical thing that can be summoned to make deep problems (usually caused by the same government) disappear. The government too knows this and knows the exact buttons to press to divert anger away from themselves. Has there ever been a Nigerian government that did not launch some campaign to promote Nigerian goods? This does not matter. What matters now is feeling good about it all.
This cultural impediment remains unacknowledged not to talk of looking for a solution to it. That Nigerian tendency to use government to further your own interests at the expense of everyone else remains alive and well. It further begets the subculture of everyone forming groups that position them for access to government largesse. This has become the Nigerian dream —to receive a glorious intervention fund from the government. And because it is a successful strategy, it acquires new subscribers everyday. It is culture.

I Know My People

This is why banning imports to support local industries won't work. The industries will remain ‘nascent’ in perpetuity. But everyday you will find a Nigerian calling for this approach as if it is a new idea that has not been tried before. It is based on what the American philosopher, William James, referred to as ‘the will to believe’.
James’ central argument in “The Will to Believe” hinges on the idea that access to the evidence for whether or not certain beliefs are true depends crucially upon first adopting those beliefs without evidence. As an example, James argues that it can be rational to have unsupported faith in one’s own ability to accomplish tasks that require confidence. Importantly, James points out that this is the case even for pursuing scientific inquiry
That is to say, people already believe these things even before they see any evidence. So from there, it is a snowball down a hill — unstoppable.
When oil prices crashed, I retained some hope that the election of a new government with a fresh mandate would spark the zeal to remove some longstanding constraints in the Nigerian economy. This hope was clearly misplaced. Certainly, the Nigerian leadership is not up for any such challenge. They are simply marking time waiting for oil prices to go back up. They cannot provide the leadership required to think Nigeria out of this crisis.
Nigerians themselves are not really up for the challenge either. The media too have gone to hide and are now actively giving a platform to ignorance and nonsense ideas. Everybody is hoping and waiting for oil prices to go back up. The matter of devaluation is now being presented as a ‘choice’. Nigeria will only devalue if it feels like it and not whether the underlying economics of the currency have changed so dramatically that a devaluation is the only logical choice. We now have a fake ‘debate’ going on between pro and anti-devaluation people. Baba Suwe could not write this stuff if he tried.

I Know My People

This is why some of us have been shouting exports as a solution to, not just our foreign exchange issues, but our cultural problems as well. Aside from the fact that Nigeria is really a poor country with a limited market size, one of the consequences of this culture is that it stands in the way of progress and boosting productivity. Because the goal is to get yourself into a position of favour with the government, once that is achieved, the job is done. It is hard to convince someone who has achieved his goal to constantly be improving and raising their standards except when its absolutely necessary. It is far less stressful to remain a local champion and continue to milk your countrymen for every naira you can get.
But when you start exporting, that’s a whole different ballgame. The people who don't live in your country are not compelled by any hashtag to buy your stuff. If you don't constantly improve your products and processes, someone else will take them away from you. The only way to make money from such people is by constantly finding ways to keep them happy. You dont need to do this when you’re serving a local market especially when you have government protection.
These problems are hiding in plain sight. From Mexico rejecting Nigerian hibiscus exports due to fake certification, to the same Mexico rejecting 100 Nigerian containers due to poor packaging, to the EU rejecting Nigerian beans due to excessive pesticide content (because Customs spray them overzealously before they are exported), to Nigerian cashew nuts being rejected because they stay too long in the container. All these problems require solutions and if solved, they boost local productivity and earnings. But they are hard. Hashtags are much easier. If oyinbos will not eat the beans because it has pesticides in it, Nigerians will #BuyNaijaToGrowTheNaira and eat it like that.

I Know My People

When considered properly, the latest campaign to guilt trip people into buying Nigerian is the latest trick conjured up by the country’s leadership, aided and abetted by the people, to dodge anything that is too difficult. The campaign will fizzle out if and when oil goes back to even $70. The ‘debate’ in the Senate will quickly shift to what ‘benchmark’ should be adopted for the budget. The price of oil will be seen as a target, not a limit. If the price of oil is $70, they will do all within their power to set the benchmark at $69.99 so that everything can be consumed and as little as possible invested.
All told, chances are quite high that unborn generations will be battling these same challenges as today and will be coming up with the same ‘solutions’. Go on Nigeria, make me eat my words. I dare you.
The people and their government are now one. Everyone wants to ‘grow’ the naira to make it ‘strong’. When the naira is ‘strong’ it will make imports cheaper so we can happily go back to our old ways of importing champagne and baby food.

I Know My People

The hand of culture is strong with Nigeria. Think of it as what the Bible says in Romans 13:14 (KJV):
14 But put ye on the Lord Jesus Christ, and make not provision for the flesh, to fulfil the lusts thereof
Or if you prefer, what statisticians call Regression to the mean. It is like a constant pull towards the status quo. If you do nothing, you will remain that way. Even if you do something and don't protect that change, you will go back to your old ways. Change is hard but it is absolutely worth doing because the rewards can be spectacular. This is what Nigeria is fighting against Nigeria. It is culture. It is flesh. It is the mean.
President Buhari, armed to the teeth with economic illiteracy, is defending the naira against its ‘murder’. Oshiomole is cheering him on. Newspapers are providing the platform. Ben Bruce and Bukola Saraki are leading a fired up army to grow the naira using the fertiliser of patriotism. Cronyism is returning. It is a time of great opportunity if you know how to position yourself. Some at the Central Bank are praying for this currency foolishness to continue so they can complete their ‘four flats’ with the proceeds of their fx arbitrage. Those who try to use facts and data to back up their arguments are shouted down and drowned out of the debate.
Welcome to the latest crisis Nigeria is going to waste.

I Know My People. This is our culture.




Cc mynd44 lalasticlala

BRILLIANT!!.... yet will remain unsung as the madness continues.