The Case for Economic Planning

During the economic recession of the 1980s the doyen of Nigerian economics Pius Nwabufo Okigbo delivered a lecture at the National Institute for Policy and Strategic Studies, with the title, “Sorcerers, Astrologers and Nigerian Economic Recovery”. Yours sincerely was among the audience during that steamy 1986 summer afternoon in Kuru. It was a brilliant performance. The late economist gave that dramatic title to his erudite lecture to drive home the point about how bereft we are in terms of serious critical thinking about the economy.

Instead of basing economic decision-making on hard-headed analysis, historical knowledge, awareness of institutional dynamics, statistical research and data analytics, most of the time we seem content to hide behind abstract modelling, guesswork, wishful thinking and shots in the dark. What was true of the Nigeria of the eighties is, unfortunately, true of the Nigeria of today.

Some of my gentle readers would recall the famous essay by the Scottish writer Charles MacKay, Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. It is a book on the mass hysteria that can occasionally overtake masses of people in the investment world; when emotions such as fear and greed drive them into magic, prophecy and voodoo instead of rational logical reasoning.

Whilst it may be true that there aren’t that many sorcerers and astrologers anymore in the economics profession, I daresay that there are still some who suffer from profound popular delusions. These delusions are particularly true regarding the underpinning paradigm that shapes the way we think and act regarding economic management. They derive from this false notion that we can easily transpose models that work in Chicago and apply them directly to our situation in Nigeria. While I believe that economics is a universal science, I am also of the persuasion that economics research and analysis must be grounded in the unique conditions that we face on our continent.

The economists of Africa need to imitate what the economists of Japan and those of France and China doing – develop their own paradigms and intellectual-analytical traditions in conformity with their global worldview and world-historic ambitions. At present, we lack originality. Our feelings of inferiority make us to take refuge on imported paradigms and research agendas that have nothing to do with the real human condition on our continent.

The electioneering season is here again. There is much talk about the economy, but no new ideas. None of the pretenders have come up with original solutions to help drive the economy out of the doldrums. The debate on national TV by selected Vice-Presidential candidates was a pitiable display of economic ignorance. None of the candidates offered anything useful or original on the economy. It is a pity that the media conspired to provide opportunity for only some candidates and not others. If there is to be any fairness in the whole thing, opportunity must be offered to other candidates to also present their views to the whole nation. It seems somebody somewhere is afraid of the intellectual acumen of some rivals to the throne, otherwise I do not see the reason or justification for such blatant daylight discrimination that is engendering so much bitterness.

Today I want to make a special plea for restoration of economic planning. A major popular delusion of the last couple of decades is the belief that development planning is bad and that all we need are so-called “rolling plans” and mid-term expenditure frameworks.

The history of planning in Nigeria goes back to colonial times. Before independence, the departing British brought in economists from the World Bank and the United States to assist in designing Nigeria’s first five-year economic development covering the years 1962-68. The distinguished American economist Wolfgang Stolper was one of the architects of our first national plan, about which he wrote with such nostalgia in his posthumous memoirs.

Nigeria has had altogether 4 national plans since independence, the other 3 being: the Second National Development Plan 1970-74; the Third National Development Plan 1975-1980; and the Fourth National Development Plan 1981-85. In addition, there has been the National Economic Empowerment and Development Strategy (NEEDS), which, stricto sensu is not an economic plan but a general overview of economic goals and principles. The same can be said of Vision 2020.

It is generally agreed that the Second National Development Plan was among the most successful. The Second Plan was anchored on the three post-war Rs of Reconciliation, Rehabilitation and Reconstruction. Its architects were Obafemi Awolowo and Professor Adebayo Adedeji, with help of technocrats such as Allison Ayida and Phillip Asiodu who were eminent economists in their own right.

In 1985 the Ibrahim Babangida military administration were persuaded by the Bretton Woods institutions to jettison planning altogether. Many of our so-called economists who bought into the fraud were in no position to know that works such as those by Naomi Caiden and Aaron Wildavsky (Planning and Budgeting in Poor Countries, Transaction publishers, 1980), were really sponsored stratagems to ultimately ridicule planning in developing countries. Western intelligence services have been known to sponsor major research projects and book publications as intellectual weapons in their ideological struggle to wean Africa and other developing countries away from socialist sympathies. An example is Walt W. Rostow’s Stages of Growth: A Non-Communist Manifesto, (Cambridge University Press, 1990). It is part of the tragedy of the intellectual poverty of our intelligentsia that that they would tend to read such works uncritically and quote them as the most valid authorities on Africa’s economic development.

This is not, by any means, to idealise planning. Economic development planning cannot be a panacea to solve all economic ills. But I see it as a discipline and tool for resource and political mobilisation that enables leaders and the nation’s economic managers to focus on and prioritise long-term development policy choices. Planning also helps to minimise the rampant policy inconsistencies and instability that accompanies regime changes. It is also a vehicle for national integration and nation building. This means planning infrastructures and railways in a manner that integrates the country; mobilising all sections of our country to buy into the planning process. It also entails encouraging our people to participate in identifying viable projects that will lift up lives and enhance livelihoods.

Contrary to what many suppose, the emerging countries that have enjoyed accelerated growth and structural transformation in recent decades have precisely been countries that never jettisoned economic planning. These include: China, India, South Korea, Malaysia, Singapore and Indonesia. They have succeeded because they remained resolute despite all forms of pressures from abroad to do away with planning.

What I propose is that we reinstate the tradition of 5-year economic development plans. The responsibility should be given to the Ministry of Planning and Budgeting, working with NISER and with technical support from the African Development Bank and possibly UNDP. Some of our top economists from the universities should also be brought into the project. We would need a good 6 months of serious technical work to develop a model for the economy but to make projections and estimates for the key sectors of the economy.

The planning process should not only focus on social and economic development; we need to bring spatial and regional planning into the equation. About 50 percent of Nigerians now live in bourgeoning urban agglomerations. Urbanisation is accelerating at a very high speed. Unplanned urbanisation is, however, a major factor in social problems such as violent conflict, crime, drugs and prostitution. We therefore must integrate urban-spatial planning to economic development planning in a holistic approach that brings renewal and hope to all.