Manufacturing poverty on an industrial scale
June 21, 2021464 views0 comments
By Charles Iyore
The devil is in the detail
President Muhammadu Buhari, has demonstrated the care and bother of the head of state and father of the nation in admitting on the NTA interview, that he is not satisfied with the economy.
The solution, however, is not foreign investors coming to invest here, but husbanding our resources so well, that we become a preferred investment destination and win in the competition for global capital
The president’s dissatisfaction may be more to do with the fact that the outputs are not reflective of the inputs.
Nigeria has been manufacturing poverty on an industrial scale for a long time, and we must be grateful that in expressing his dissatisfaction, he is perhaps ready to resolve the issues. That will require debugging a fourth generation virus that has been morphing in between with various hashtags.
* Every time public officers protect private interest at the expense of public good, they manufacture poverty.
* Every time a public officer makes a critical appointment without considered judgement, of merit and competence, he creates slack in the system, which manufactures poverty.
* Every time an accounting officer, for a ministry department or agency creates a silo, the linkages in governance are broken and the objectives of the organisation are compromised.
These are events that create slacks in the system, compromising public good and betraying the public trust, and they are occurring at all levels of government. They have become an unregulated utility. (egunje)
The manufacturing process
Industrial manufacturing is the process of turning infeed raw materials through sequenced unit operations, into value added products. Bread from flour, petroleum motor spirit from crude, etc.
If the plant manager is dissatisfied or does not get the desired output, then the unit operations managers, are either incompetent or do not understand the instructions of the plant manager. The managers are then said to be corrupted and the debugging begins.
The biggest challenge of debugging is not the recovery or reduction of waste, but in ensuring that the managers are appropriately driven. What is critical therefore, is to fix the mind/driver of the unit operations manager.
The mind of the unit operations manager
Public sector managers have over time become slaves of a scarred past, developed a nervous and suspicious disposition for today, and become incapable of dreaming tomorrow.
For that to change, the plant manager must be clear and unambiguous in his instructions and be strict with measurements and rewards. (equity and justice)
The size and population ratio of our needy, is such that we can safely conclude that the production lines of poverty are at all levels of the administration. Federal, States and Local governments.
Getting the change process started
The vision of the plant manager is critical at this stage, and this he must offer after reviewing the advice available to him. This visioning is why you have concept branding as with Reaganomics, Thatcherism, Glasnost, Perestroika etc.
The first challenge is to re-establish in the minds of the unit operations managers the capacity to dream tomorrow, free themselves of the baggage of yesterday, and be diligent in their efforts today.
That task was started when the president sent his cabinet members back to their constituencies to explain the challenges of the nation during #Endsars.
That same responsibility should now go to councilors, local government chairmen, members of state houses of assembly, members of the federal house of representatives and senators, but this time not just tasked with explanations but also with championing community resilience. Their job description can be so defined as to make it possible to compare like with like. The president should then invite them for dinner, in various groupings, to brief him of progress, every now and again.
So was #Endsars a stumbling block or a stepping stone? Good wake-up call perhaps.
In debugging the manufacturing process to lift 100 million out of poverty, the president needs to review the utilities or common services, required by the unit operations managers at their points, in the manufacturing process.
1. Currency: Why are we unable to use market price discovery mechanisms, to determine non pernicious exchange rates, after 32 years of trial?
2. Skill sets: Why are we unable to train builders to build houses, despite the availability of construction aggregates?
3. What should the common attributes be, for all communities? (Towns and villages in planned settlements)
4. Why is there so much wastage and wide seasonal price variations of agricultural produce? Will a structured logistics blueprint reduce produce wastage and significantly increase the IGR (Internally generated revenues) of states?
5. Will farming communities do better on produce purchase rather than grand fertilizer distribution?
6. Why is the quality of bandit intelligence superior to state intelligence, and farmers as a consequence cannot go back to farming?
7. Can we introduce global brokerage to our import and export processes and reduce capital flight?
8. Can we introduce performance measurement for traditional institutions?
9. Could we introduce a charity commission to monitor NGOs and charity institutions?
10. Why do the asset allocation ratios of individuals in their homes differ from those of public institutions? (Let’s bring-in kitchen economics to public finance)
Why do the markets not work well for all? Rising pension assets, dwindling insurance collections and gaps in infrastructure financing?
There are many other utilities’ attributes which can be addressed in a sequenced order, to achieve common and even growth targets, for all communities across the country.
How did the unit operations get so corrupted?
From the very onset, the preference for divisive sentiments rather than seeking points of co-operation, welled up the wrong references of competition.
The experimentation to correct those distortions led to the adoption of free market economics for national production. Those sets of principles were unfortunately not domesticated appropriately and we threw out the baby with the bath water, in shutting down marketing boards instead of reforming our produce aggregation processes.
The greatest drawback of this failure was the abdication of state responsibility for market oversight, and MDAs (Ministries Departments and Agencies) began to carve out empires for themselves and scramble for budget slices.
The silos that emerged thereafter, is why some have admitted not knowing how the economy runs.
With central coordination weakened and increasing indulgence of the Treasury by the Central Bank, it’s little wonder we are under such a mountain of debt.
The insufficiency created by poor husbanding of resources over six decades of self-rule, cannot be corrected by foreign investors, who on their own, will be wary of local habits.
Rolling it all back
The president will not get satisfaction with economic performance, if the virus remains at play in the MDAs and in the private sector. The virus, over time, has offered many the opportunity to make a killing, and those waiting in the wings to have a go at the treasury want the status quo to remain. Against that background, only a careful wholesale debugging of the unit operations, will reset the system. The president can therefore expect to be kept insular if his handlers are some of those waiting in the wings.
This is why the interviews on Arise and NTA could begin a new era of engagement which the president ought to sustain.
The Production Lines
The production lines are the MDAs not just in their representation in Abuja, but to the extent that they coordinate activities to the local governments, where poverty is manufactured daily.
The products are industrialisation, capacity building and human capital development, reduced infant mortality, a healthy workforce, markets that work well and productive adsorption of the growing youth bulge.
If the president works with the list of distortions above, and calls on the skillsets of Nigerians at home and abroad, he would deliver on the promises of the first inauguration address, in an 18-month policy cycle.
This would be an act of immense courage, and would be an opportunity for the president to press the reset button and begin the process we did not start on the morning of independence in 1960. Instead the elites (military and civilians) have been hard at work setting up complex processes they knew would deliver nothing.
Properly done, the economy will recover, our currency will join the IMF basket of currencies, and Nigeria can become the arrowhead of African economic renaissance. The continent can then slowly start to address her trade imbalances, and begin to set tracks for industrial value addition.
A hundred million or more will be lifted out of poverty, and the economic growth will become inclusive
This is the challenge the president set for himself in 2015, and that should be his tunnel vision.
Charles Iyore is a partner at DNA Capital, and writes from Darenth Kent, England. He can be reached via email at Dioncta@aol.com