Lagos, Nigeria. Bill Mundell joined Former Secretary-General of the United Nations, Kofi Annan, Former US President Bill Clinton, Former US Vice President Al Gore, at the 2009 ThisDay Festival of Ideas.
The meeting tackled questions on the challenges facing Nigeria as it moves to consolidate democracy, enthrone sound governance practices and seek the right framework for building infrastructure to ensure and sustain economic growth.
Bill Mundell’s speech:
It is a pleasure to be here, to have a reunion of sorts with a great Nigerian. I am going to talk about some big ideas for Nigeria and the African continent. The unprecedented speed of the global economic meltdown witnessed over the last few months has led to the rush to paint the future bleak and even question the basic tenets of capitalism.
Indeed, when considering the enormity of Nigeria’s infrastructural needs and the headwind it faces in today’s global economy; it’s not hard to paint a pessimistic future about the prospects for Nigeria achieving its infrastructure goals.
I must tell you that I’m not pessimistic. I think that in this economic environment in particular, there are enormous opportunities. I ran the largest international economic forecasting firm for 10 years and let me tell you something, it’s a humbling experience. And I certainly have come to know what I didn’t know and what I can tell you with certainty today is that no one can tell you with certainty the outcome of an unprecedented event.
The comparisons with today’s economic climate with the Great Depression are particularly enough. One has to at least allow for possibility that if things came to a halt more quickly than ever, they could also restart more quickly than ever.
Now I mentioned all these not to go off topic on this panel discus sion but because I think the central issue facing every country in this new economic environment we live in is just how to react to it. And my advice to Nigeria and the broader African continent is almost the exact opposite of my advice to the United States. In America, my biggest fear is that we’ve already panicked in response to the crisis. The $700 billion bailout and trillion-dollar stimulus packages have compounded the problem rather than a solution as it erodes the very confidence which is at the heart of the crisis. And so my advice to America is “stay humble in the face of the unknown and don’t throw out the $14 trillion baby with the bath water”.
My advice for Africa is not to panic. They say that financial crisis is the mother of all inventions and so this is an opportunity- a great opportunity to put your house in order. In a short term, one thing is for sure: Africa can count far less on the kindness of strangers.
The federal government coffers in my country are empty and they’re empty all around the OECD. But this could turn out to be a blessing to Africa. We should remember two things: one that the western world did not get rich through aid or by financing entrepreneurs; and two, that pockets within the West – much aid notwithstanding – failed miserably.
We are now gambling as per riches to the American and Canadian Indian tribes. Before, poverty persisted for decades with alcoholism, obesity and suicide rampant in spite of the transfer of hundreds of billions of dollars to aid d tribes. Areas or countries never prosper where this is the case.
You see , as fundamental as roads and bridges and governance are in increasing sustainable economic growth, creating sustainable economic growth, first and foremost is about getting your financial infrastructure in order. There is no example of any country making it without accessing capital to spend on medium size businesses and start new ones.
I was recently in Mali and reasoned with the Prime Minister out there a few months ago and he was telling me about a great victory about year ago that they won a major grant from a Norwegian Challenge Corporation; one of the better entities passing aid to Africa. And the use of some $400 million of funds was among other things to build a new airport in Bamako. Having just strolled in, and having been incredibly impressed with the airport, I asked Governor Bush, I asked the ‘why’ question: I asked why do you need it? Seems like a perfectly reasonable airport to me and I’ve travelled all around the world and he looked at me perplexed and said you know, it’s about expanding capacity. But I couldn’t help hut think it, about the multiplier effect if that $400 million had been disbursed to the portfolio of their entrepreneurs, who are largely capital starved not only in Mali hut throughout Africa.
Now I want to be clear that I am not picking on the banks here in Nigeria and across Africa for not lending to small and mid-size businesses. Any more than I could support certain factions within the American government that want to dictate what banks lend to their customers.
We’ve seen that song and dance before and it doesn’t end well, but I offer just a short historical example to show how important the point of creating the financial infrastructure is. Scotland didn’t go from being the poorest country in Europe in the 18th century to becoming the richest in a matter of decades without the creation of appropriate financial turning.
Hybrid financial vehicles that translates on the one move, the role of what we would today call micro credits, venture capital and normal bank lending. And let us not certainly forget that the Wild West in the
United States was not out of the help of the established East Coast banks of the time, hut with soft money banks with a combination of what today we will regard as normal banking and venture capital.
The bottom-line is that these types of hybrid financial institutions do not exist in Africa and they are everyday as important to infrastructure as roads and bridges. And as a country rich in talent and resources,
Nigeria shouldn’t have 50 per cent of her population living below the poverty level.