On the contest or no contest between accountants and economists

BASHORUN J.K. RANDLE

Bashorun J.K. Randle, a renowned chartered accountant and chairman of J.K. Randle Professional Services, is a former president of the Institute of Chartered Accountants of Nigeria (ICAN); and former chairman, KPMG Nigeria and Africa Region

The contest is not really a case of Chartered Accountants versus Economists because many Chartered Accountants actually trained as economists before becoming Chartered Accountants. Vice-Versa (similarly), many of our leading economists qualified as Chartered Accountants before venturing into economics as their area of specialisation.

Be that as it may, it is an oversimplification to postulate that while Chartered Accountants insist on balancing the books first, it is the economists who are somewhat wary of the scepticism of Chartered Accountants. If they have their way, they would prefer to dazzle us all with econometrics and veer off into the exotic areas of fiscal policy and monetary policy as well as the areas of convergence – or the lack thereof.

What is even more fascinating are the never ending vigorous disputations amongst economists themselves and (versus) accountants  and the rest of us.

Permit me to quote:   Jimi Morgan

“As Africa’s most populous country, largest economy and most notable democracy, Nigeria is a bellwether for the continent. A weakening economy, rising insecurity and violent conflicts threaten progress made in its democratic development. Amid deepening distrust in government and institutions, Nigeria has significant work to do in improving national, state and local security and governance ahead of national and state elections in 2023.

“Nigeria’s federal system gives governors great responsibilities in addressing the issues driving the country’s multiple conflicts, including farmer-herder violence, deepening regional divides, armed banditry and the Boko Haram insurgency. United States Institute of Peace [U.S.I.P] brings together state governors, national policymakers and civic leaders to design and implement inclusive policies that mitigate violence and strengthen community-oriented security. The Institute engages a variety of influential figures, empowers citizens and uses its expertise and convening power to inform Nigeria policy in the United States, the region and around the world. Recent work includes:

“Since 2016, this working group has fostered relationships between citizens, policymakers and national and international figures to ensure that a diverse array of voices impact decision-making processes. These relationships allow the working group to turn expert analysis into tangible, actionable policy advice. For instance, recommendations for addressing the country’s current security and political challenges — informed by a 2021 convening with religious and civic leaders from the National Peace Committee and the Inter-Faith Initiative for Peace — were published in leading Nigerian newspapers. In 2021, amid deepening public mistrust, the working group harnessed its collective experience and relationships to advance high-level dialogue between major civic groups working for peace across the country and the Nigerian government. The working group is regularly invited by state and national policymakers to provide recommendations on a range of issues, from inclusive governance and electoral violence to communal conflicts between pastoralists and farming communities. 

Network of Nigerian Facilitators (NNF)

“The NNF is a group of professional peace mediators trained by USIP to resolve local conflicts through nonviolent means across several states throughout the country. NNF dialogues focus on strengthening community-security sector relationships and mitigating intercommunal, pastoralist-farmer and election-related violence. Since 2019, the NNF has collaborated with state peacebuilding institutions to address conflicts and support local peace processes. In 2021, the NNF helped conduct USIP research to better understand the drivers and dynamics of communal conflicts across Nigeria.

Working with State governments and peacebuilding institutions.

“USIP helps governors and state peacebuilding institutions to establish inclusive, cooperative strategies that prevent and resolve violent conflicts; ensure that policies focus on citizens’ needs; stem the potential for all forms of violence; and allow communities to play meaningful roles in the transition process.

Strengthening local security

“Through USIP’s ongoing Justice and Security Dialogue project, citizens at the local level collectively identify security challenges and organise dialogues that bring together internally displaced communities and police in Northeast Nigeria to develop practical and concrete solutions to address security concerns, build trust and foster accountability.

Informing policy through research

“USIP conducts research on governance and security to better advise Nigerian policymakers in their response to these challenges. A 2020 public opinion survey found new linkages between COVID-19, instability and conflict. These survey findings informed policy discussions with senior U.S. and Nigerian policymakers, including Nigerian [former] President Buhari and state governors. USIP also published research mapping state peacebuilding institutions; assessing election-related violence risks; and outlining pathways to civilian-led governance amid the Boko Haram insurgency in Northeast Nigeria. 

Convening stakeholders

“USIP convenes government officials, partners and civic leaders at its U.S. headquarters and Nigeria country office for candid conversations that foster collaboration and inform policy and programme priorities. USIP hosted discussions in 2020 with the Nigerian ministers of foreign affairs and humanitarian affairs and senior U.S. policymakers. Throughout the pandemic, USIP convened a series of virtual roundtables with Nigerian federal and state policymakers and key stakeholders to examine COVID-19’s impact on security and governance. In 2019, USIP hosted eminent U.S. and Nigerian civic leaders and government officials for a roundtable to explore the state of Nigerian governance 20 years into its democratic transition.”

Expanding the Institute’s Field Work

“In 2020, USIP officially established a country office in Abuja. This accomplishment allows the Institute to continue its impactful operations, broaden its regional scope and sustain its direct action for peace in Nigeria.”

Current situation in Nigeria and possible path to sure and sustainable recovery.

The Nigerian Federal Government has received a plethora of advice, and some threats. Sadly, the majority of counsel, with the greatest of respect, are ideological.

1. i) Economic systems and their proponents are based upon preferred political systems. Adam Smith, through adherents such as David Ricardo represent one school – capitalism and the free market. Karl Marx represents another system  – communism which is the antidote to the ills of capitalism, and which has only a few countries following his original philosophy although that’s been refined. Then there is John Maynard Keynes of the Cambridge School of thought advocating for a government role in the capitalist system. Importantly, Milton Friedman of the Chicago School did advocate for a private sector dominance over as many areas of economic activities as possible. 

2008. ii) In more recent times, these neoclassicals have pushed for free market economics – the private sector running loose with little government intervention. That philosophy almost caused the global economic collapse in 2008. The central bankers and China had to rescue the system. 

iii) Thus, any system is ideological.

With its adherents and practitioners. 

1. iv) The political liberal order is closely aligned to the Milton Friedman school of economics. The Western democracies push their model as the only democracy. And try to compel others to adopt it, name calling or bad mouthing them as autocracies.

Question 1: Which model has brought the greatest benefit to the largest number since WW2? 

Response – The People’s Republic of China (The PRC) with emphasis on “common prosperity”, India and I include the USA.

Question 2: Which system has pushed for prosperity and good quality of life  for as many of its people as possible?

Response – The PRC, the Scandinavian countries. The USA is one of the worst performers of a major economy in wealth disparity. 

Question 3: Which one country or set of countries have performed worst economically compared to their resources, human and otherwise?

Response – The various African countries befuddled between one political system or the other, and the ideology of one economic system or the other. If one takes it from 1960, although one can go back to 1957,  African countries have experienced growth or retrogression; political peace and internal harmony or political upheavals,  conflicts and killings.

1969. v) Let’s home in on Nigeria. The government with greatest comparative achievement in economics, education, health, transportation, communication and quality of living was the Western Region between 1952 and  1969. It encouraged growth of private capital and government participation. It owned embassies in Britain and the USA (which were taken over by the FGN after the Unification Decree of May 1966). It also lent money to the FGN. It paid its civil servants twice that of another region and one and a half times that of the federal government. 

1. vi) The military administration between 1970 to 1979, with a change of guards twice in that period, experienced great economic and other growth.

However,  education, almost always an area of focus by a dear professional colleague, didn’t reach many. The economy also became unequal with the steady increase in the private sector and decline in the public sector. Thus, education for the rich rather than the majority increased in number and scope. (Not sure if even the Western Region achieved a 100% enrollment).

Oh yes, private sector education benefits those with the money. I attended a church school myself, fee paying but not exclusive. And indeed there are many papers on the introduction and impact of  church schools and education in different parts of Africa.

vii) And disparity in wealth became greater. The ‘social warriors’ became the Oyenusi and Anini armed robbers. I hope some readers can recall those characters and the period. 

viii) Let me add. The 5 Year Development Plan of 1970 – 1974 under Chief Awolowo as Federal Finance Commissioner mentioned the government being responsible for the commanding heights of the economy. It was that plan that propelled the economic growth and other achievements from 1970 to 1975 when Chief Awolowo resigned. The approach was no longer followed and the intellectual capacity and discipline could not be replicated by Alhaji Shehu Shagari. Thus, I acknowledge it’s not just about the economic system, it’s also about the persons implementing the systems. Of course, based upon an agreed political or military system.

1. ix) It should be noted that the plan marked the very first attempt to express a social philosophy that should guide the plan.

1. x) In conclusion, the free market economic system favours the few at the expense of the many. It also develops the economy itself at a slower pace than where the government plays a role.

1. xi) There is therefore an umbilical link between economic system and socio-political  philosophy. And since World War 1 when there was a dispute over which economic system should prevail, the German or the British, global powers have advocated for the variant that maximises their benefit.

xii) As a consequence, the philosophies keep evolving. There are several variants I have not mentioned, but let me flag two divergent thinking and practice; (a) the new classical economics with monetarism, and (b) socialism with Chinese characteristics, arguably the most transformative of the lot.

xiii) My observation is that Nigeria under PBAT (President Bola Ahmed Tinubu) has adopted the neo classical approach with monetarism. I could be mistaken. 

xiv) We seem to ignore the fact and reality that there is a new player in town – BRICS consists of:  Brazil; Russia; India; China; South Africa; Egypt; Ethiopia; Iran; and the United Arab Emirates, and new rules are being established.

I apologise for the length of this piece, but we are sharing thoughts and increasing awareness and thus understanding. There are currently three power economies in Africa: Egypt, Nigeria and South Africa. Two are in BRICS+, the other is nowhere, not in G7, not in G20.

1. xv) Having stated all that, there are many foreign interests who need to keep exploiting Africa in order to enjoy their economic prosperity and maintain their political superiority.

xvi) In addition, recent events have eroded their moral   authority because of the differentiated and hypocritical response to global events: 

xvii) *Condemn Russia for killing Ukrainians but support killing by Israel of many more people – tens of thousands of Palestinians, especially women and children;

xviii) *Condemn Russia for invading its neighbour which justifies this on security needs that it doesn’t want an enemy military organisation there,  but justify USA and British invasion of Iraq, separated from them by long distances and the sea;

xix) *Encroachment into African economic activities, e.g. the Uganda-Tanzania  oil pipeline was condemned in the EU Parliament although it will generate revenue to the African owners of the oil and the transit country.

1. xx) If security can be achieved in Nigeria, it’s safe to predict the economy will recover, irrespective of the economic system used.

xxi) Conclusion: Let’s adapt the Lee Kwan Yew mantra – “it’s what works, not economic theories.” 

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