BY CHARLES ODION IYORE
Charles Iyore, a partner at DNA Capital, writes from Darenth Kent, England. He can be reached by email at Dioncta@aol.com and +447932945002 (text only)
The attraction of Europe as a destination lies not only in their long history of industrial progress and innovation but more in their determination to build a shared prosperity. The European Union is an example of the strength of regional cooperation that has brought about the birth of a currency – the Euro, which has made Europe more competitive in global international exchanges. That currency has been built on the back of a carefully worked out economic convergence, driven by increased productivity, more efficient asset allocation and an openness in law, job mobility and markets. The new global competition is no longer just about territory for area, but aggregation to building shared prosperities.
The Ukraine war is borne out of a deep desire to share in the prosperity of the European Union. The bold move of Perestroika and Glasnost, aimed at building a region of shared prosperity by Mikhail Gorbachev, has not provided a comparable alternative for her neighbours, or admirers from afar.
Regional pacts and other global aggregations, must take seriously the task of ensuring cohesion at home and building the shared prosperities amongst her member states. The MAGA mantra of Donald Trump, the empire plan of Putin, the disorder in Africa and South East Asia are centripetal forces threatening to take the world apart and a reminder of the warning by Nelson Mandela, that perhaps the new crop of global leaders may not be in the mould of their founding fathers.
High walls and the moat-like protection of seas will not protect regional gains, if actions are only just about dealing with the effects of migration without a concerted effort to deal with their root causes.
It is against that background that we must view the new charter of the President Bola Ahmed Tinubu on taking over the mantle of ECOWAS leadership.
Is the leadership ready, if there is no fiscal consolidation at home?
Can economic convergence come about, if member states remain disorderly with public finances, while neglecting the good of their people?
Can the region (ECOWAS) construct shared prosperity?
Do we understand the intrinsic links between money in circulation to tax rates?
How do we run sustainable governance models?
Can ECOWAS develop large-scale perspectives for ensuring regional cohesion?
These are the conversations and planning meetings that need to follow the declaration to build a region of peace devoid of upheavals, accentuated by military coups.
Nigeria is back! as declared by the new chairman and ready to provide the leadership needed.
There are difficult choices ahead, but the careful sequencing of actions and the ability to make the calls as we motor on, will require the wits of a champion sportsman.
These declarations are a reinforcement of President Tinubu’s position, which he brilliantly espoused at the Chatham House lecture. The passion with which he has continued to push for shared prosperity, which he demonstrated as a sub-regional leader in Nigeria, are the marks of the leadership he wants to pursue. The wisdom of his choice as leader by his colleagues (heads of state), will allow him to design big ticket transactions for a regional market, in excess of 400 million people. So, the key actions for the effective domestic plumbing of the economies will be, productivity, efficient asset allocation, and openness.
Successful regional arrangements have one or more strong kernel countries, the countries where the lattice structure of governance is tightly put together without slacks. If Nigeria is to be that kernel in ECOWAS, then she must address her internal issues of declining productivity, become more efficient in asset allocation, and lead the way for increasing openness in governance, as tools of building resilient communities.
These new leadership challenges call for contributions from all citizens, who through their engagements, guarantee our ability to deliver that leadership.
The short views from effects
• Economic convergence
Without economic convergence, it will be difficult to manage trade and exchange in the subregion, as commodity product price arbitrage will put a crushing burden on the kernel states and lead to border closures, which are antithetical to building a free economic zone. If you overlay on that, the existing inefficiencies of international exchanges, then the outcomes will already have been determined.
• Declining productivity
The inability to efficiently harness our resources (agricultural in particular) within a market framework, means that the level of initial losses from wastage puts most economies at a disadvantage. This is not helped by the reward mechanisms, as the impetus for driving productivity is no longer the local currency but the US dollar. Most currencies are not considered good stores of value, which is blamed by the bankers on declining productivity. The bankers however, have given up on catalysing local production and have settled for the sweet ether of international trade financing. And so, slowly, one after the other, the economies have gone to sleep. (Most production plants have gone silent).
• The long views from causes
The production matrices are weak and the capacity building arrangements for skilled manpower are not fit for the purpose of industrial production. Wide income inequalities mean that the local demand pull for goods and services is weak.
Economic growth against that background is elusive, and many are left out in the cold without a safety net. The idle soon find employment in crime and provide reasons for military adventurers to strike, offering plenty but ill-equipped to deliver anything.
This is the cycle that has to be broken to discourage coups in the sub-region.
• The economic adjustment options
While assembling a strong cabinet at the centre and building a detailed administrative structure from the top is good, the key success factor is the resilience of local communities. This is what ensures the matching approach from the bottom up. At the local level, asset creation can lead to fragmentation, but ownership and management of assets created is often best delivered here. These models could vary from country to country as determined by the activity data generated on idle assets and capital.
Above all, do the regional natives know they are free, and are they prepared to stand-up for their rights?
All the ministries, departments and agencies are the tools to ensure delivery in this format.
We must not fail to plan this time, or we would be condemned to repeat it.
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