People & Money

Elite role, purpose and national development

Preserving The Promise of Ibadan

The Economist 2011, defines elites as people who shape the world without anyone noticing. … We can conclude then that what Nigeria has become today is largely a function of elite choices”.

 

The way a society, community or country is, is ultimately a function of the choices of its elites, who hold the power (social and economic) to influence the direction of that society. Development economist, Alisa DiCaprio defines elites as a ‘distinct group of people within society which enjoys privileged status and exercises decisive control over the organization of society’.

They do not necessarily have to be politicians or even hold official titles, or be wealthy. The principal criterium is that they have power and influence over the organisation of society. The Economist 2011, defines elites as people who shape the world without anyone noticing.  The elites are broad. They include members of the political, business, religious, judicial, labour, cultural, bureaucratic (civil service), military, academic/ intelligentsia class, as long as they collectively represent people of power and influence.

Elite power and influence manifest in society as an aggregate of their individual and collective actions and inactions. They exercise a disproportionate influence on society, despite their being minorities. They shape national discourse, even in democracies; determine agenda; and influence economic and political outcomes far disproportionately, given their numbers.

DiCaprio concluded that the control of elites over the productive assets and institutions of society allows them to allocate resources and authority, hence their disproportionate influence. We can conclude then that what Nigeria has become today is largely a function of elite choices.

From our economic growth or otherwise, the pervasiveness of poverty in society, with 133 million multidimensional poor people, a fragile society evidenced by banditry, crime, kidnapping and terrorism, poor social cohesion, and the increasing fragility of the state, Nigeria has moved backward. The youths of today do not have the opportunities of good inclusive education and social mobility that many of us had.  Our parents needed not to be wealthy for us to access good education.

The words of late Pa Alfred Rewane spoken in 1994 that…”yesterday, we yearned for a better tomorrow. But today, we mourn the loss of a glorious yesterday” were true then. They are even more true today as the glorious past seems to be fading farther and farther into memory. We should look around us to see the result of our collective elite choices.

There is a phenomenon of institutional path dependence, according to economists Robinson and Acemoglu,  that should give us serious concern. Social institutions, when they are weak as a result of history and previous elite choices, tend to perpetrate themselves and their kind of elites in a path dependence, with the potential to create a continuous reinforcing negative trajectory in society. It is important to reflect and ponder on how this applies to Nigeria.

When a society takes a negative turn with an accelerated momentum, it will require a major collective action of discerning elites to pull it back on a good course. According to James Robinson of Harvard University, “those in power today chose political institutions in the future and they naturally tend to choose those which reproduce their de jure power. Second, those with power today determine economic institutions which tend to distribute resources in their favour thus reproducing their defacto power. So, once..elites (or group of elites) have the power to determine the choice of institutions, this will tend to persist over time.” 

 

Value-Creating Versus Value-Extracting Elites

A classic example of this kind of potential challenge or path dependence decay, and may it not happen to Nigeria, is Argentina and the historical choices of its elites. In the late 19th century, Argentina was one of the five wealthiest countries in the world. It was richer than all European countries. In the 1930s, Argentina was as wealthy as the United States.

Today, Argentina has more than 30% of its people in poverty, with income per person now estimated to be just 40% of those of the western European countries in a story of wealth-to-poverty now described as the Argentine paradox. How could a country with so much potential to be wealthy fall and become a basket case of economic/currency crises and perennial debt defaults? Argentina moved backward, while the United States moved forward as a result of contrasting elite choices in the two countries.

There are two divergent types of elites, according to Acemoglu and Robinson, the author of the classic book Why Nations Fail and Cassa et al. of the University of St Galen in their 2020 study of elite quality across the world. The two kinds of elites are value-creating and value-extracting elites.

Value-creating elites, in their business and politics, add more value to society than what they take. Value-creating elites grow the slice of the social wealth pie far bigger than the slice of their own pies. Value-extracting elites, in contrast, in their business and politics, take far more from social wealth than the value they create.

Also Read: The Lunch Hour, Olu Akanmu, President, OPay-Nigeria

Value-extracting elites increase their share or slice of social wealth without necessarily growing the social wealth, even when social wealth is stagnant or declining. Value-extracting elites increase their wealth far disproportionately than the social wealth they create. Progressive, inclusive, and increasingly prosperous societies have more value-adding elites on the aggregate.

While these value-creating elites become increasingly wealthy, more people in society are also lifted up. Value-extracting elites, in contrast, create increasing and more extreme social inequalities, expanding social exclusion rather than inclusion, alongside more pervasive poverty, even as they get wealthy. We should soberly classify ourselves collectively on the aggregate: What type of elites have we been in Nigeria?

Afenifere…A commitment to the common good

However, it was not always like this. Our fathers and mothers, the Nigerian elites of 1950s to the 1970s, were truly value-creating elites. The old Afenifere values, which means the “common good and beyond self“ and which drove the politics and elite choices of the South Western region, was about the elites adding far more value to society than they derived from it. And this was replicated in the other regions. We are the evidence, products of huge social investments in public education and the sustained, inclusive prosperity it created over several generations.

The philosophy of the “common good and beyond self” in Yorubaland did not start in the 1950s. Our forefathers and traditional privileged elites also expressed this in the saying, “enikan i je ki ile o fe”, which means “no one should take so much to the detriment of the generality”. Essentially, good elite purpose extrapolating from the wisdom of our fathers is about the elites and the privileged thinking and acting beyond the self, in a manner that is inclusively for the common good.

Also Read: Change and the Nigerian Conservative

From their aphorism, our fathers knew that if one person eats to the detriment of the generality, sooner or later there would not be peace in the land, even for him to enjoy his meal; that is if he survives. It remains applicable today in Nigeria as social exclusion gets to a level we have never seen, with 133 million people, 63% of our population, in multidimensional poverty.

While it may seem rational that individual members of the elite would act in their own narrow interests, freeload on and exploit society, real enlightened elite interest is actually that they are better off when society is collectively better off, and when the elites act responsibly as such. An inclusive society in which prosperity is more widely shared means bigger markets for businesses, higher returns on investments, bigger businesses and more jobs, in a social compact of a mutually reinforcing loop of prosperity between the elites and the people.

The Promise of Ibadan

If there was any city that exemplified inclusiveness and common good at its foundation for its citizens and freeborn, it was the old Ibadan. The traditional military elites, the war generals, the Balogun Ibikunles, Aare Latoosas, Bashorun Ogunmolas, migrant soldiers who were the pioneers of this city, created a republican society where anyone could become the Olubadan if he proved himself, whether in the military or civil line. You could migrate from anywhere in Yorubaland, as a commoner, join one of the armies under the command of the Generals and rise through the rank to become a General yourself or command your own army in the Ibadan war economy of the early 19th century.

As the war economy declined after the Kiriji war, for commerce and trade, the city of Ibadan continued to be a land of promise for diverse migrants in Yorubaland, with the emergence of traditional civil and commercial elites who governed this city in the same republican spirit, in balance with the military elites. The city of Ibadan was like the United States, a land of opportunities with high social mobility where every citizen, every migrant and their descendants could fulfill their GOD-given potential.

That land of promise produced great wealthy elite merchants like Adebisi Idikan, whose parents were itinerant Aso oke cloth weavers and Salami Agbaje, who started from a humble beginning as an artisan tailor, moved into logging and benefitted from the new railroad economy of his time, to become a very successful merchant and an elite.

There was something like “The Promise of Ibadan” at the foundation of this city that drew generations of our fathers and mothers here, to this land of opportunities, where they and their descendants were to fulfill their God-given potentials. The promise of Ibadan has been fulfilled in us, members of elite sociocultural clubs with origins in this city. The big question that should now confront us is how do we will fulfill that promise of Ibadan in the present generation of young people, youths and children.

Sort out security by bringing up all necessary ideas to work with government on this, so that agriculture can thrive maximally and fulfill its traditional potentials in Ibadan and environs. This should also include utilising our elite influence to help forge a broad national elite consensus for a truly decentralised federal security architecture that is so critical to fixing our civil security challenges. You cannot solve the social problem of Ibadan in isolation of the larger problem of Nigeria.

In order to fulfill the promise of Ibadan in the current generation, I will like to make five broad recommendations.

  1. Fix public education, especially at the primary and secondary levels, while encouraging private commercial education for those who can afford it. Government is commended for its progress in this area, with the initiative to tackle the phenomenon of children who are out of school and many more. How can we work with the public and private sectors to accelerate even more progress and improve the quality of public education, which is the foundation of inclusive social mobility? In Osun Development Association, for example, our private research on the state of primary education suggests that the collapse of the old functional Inspectorate Division in public schools that set and enforced standards, is a major reason for the decline of quality in public schools. What specific intervention in policy and advocacy with education stakeholders – government/parents/teachers/proprietors, teachers’ capacity building, research, monitoring and evaluation of standards – could accelerate progress in the quality of public education delivery and make access to good quality education more inclusive?
  2. Enable Public and Private Sector Partnerships for Investments in Vocational and Entrepreneurial Education to ensure that the youths of Ibadan are not only educated but have skills to be employable or to create their own jobs. These include investments in technical colleges, where they would formally learn employable skills in construction; practical automobile and electronics engineering; hotel, chef and restaurant work; the fashion business, and many more. We must ensure we give formal vocational education and certification the prestige it deserves, so that it becomes a more attractive path for more youths, rather than what they discover after unemployment with university education.
  3. Ensure digital technology education for the modern economy is linked to a formal digital ecosystem and geographic clusters of tech entrepreneurs. Ibadan is rarely mentioned in discussions on tech start-ups, yet huge talents abound here in this city. The future growth economy of the world, and it is already here, is digital. Ibadan must not be left out. If there was an Ayeye-Ogunpa-Agbeni valley that produced the Salami Agbajes and Adebisi Idikans from the railroad and commodity produce-buying economy of their time, how would this generation create the new digital equivalent of the old Ayeye-Ogunpa-Agbeni valley to produce the new Salami Agbajes and Adebisi Idiakans of the new digital economy in this same city of promise? Through deliberate private and public partnerships, a digital technology hub evolved around Yaba in Lagos, deliberately close to the University of Lagos, which provides coding students feeders to the hubs and startups. Can we create a deliberate technology start-up hub around Agbowo in public and private partnership, with deliberate linkage to the University of Ibadan, modeling the Yaba digital tech cluster example?
  4. Scale and deepen private sector investments in microcredit to improve access. Access to a loan of N50,000 to N100,000 over a staggered period or cycle might be what most people need to lift them out of poverty. Many elites in Ibadan with good conscience do philanthropy and give out such amounts to fund social causes in their philanthropy foundations. The social impact of these philanthropies would be more sustained and bigger if these funds are put into social impact businesses like microfinance, which empowers people to access their future income today as a microloan, pass on the loan empowerment to others as they pay back, creating a multiplier and sustained effect in social impact.
  5. Sort out security by bringing up all necessary ideas to work with the government on this, so that agriculture can thrive maximally and fulfill its traditional potential in Ibadan and its environs. This should also include utilising our elite influence to help forge a broad national elite consensus for a truly decentralised federal security architecture that is so critical to fixing our civil security challenges. You cannot solve the social problem of Ibadan in isolation from the larger problem of Nigeria.
No one can exempt himself or herself from a generational, collective elite performance. We are collectively responsible for our actions and inactions or apathy. Our inaction or apathy is in itself an action. Hence, no member of the elite, as long as they have some power or influence at an individual level, can exonerate himself or herself from the responsibility for social decay and the imperative of social reforms.
But we must coordinate with others. Lack of coordination for broad collective action for reform is a fundamental reason why some narrow elite sections continue to free ride on society, capture state institutions for their self-interest and foster huge negative externalities in social cost on society.

The elites of old of this ancient city bequeathed unto this generation of elites the promise of Ibadan”. We have a historic duty to ensure that the ‘promise’ does not die with our generation. Let history count us that we kept the promise of Ibadan aglow and passed the torch brighter to the next generation to fulfill their God-given potential and, by extrapolation, do the same for Nigeria. It is a task and a sacred duty that we must not fail.

Olu Akanmu is the President and Co-CEO of OPay Nigeria.

This is the text of the Keynote Address at the Celebration of Excellence Event of the Jericho Businessmen Club, Ibadan on the 10th of December.

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