According to President Muhammadu Buhari, “there is no crisis without an accompanying opportunity”. Our current economic crisis has presented an opportunity for people to get richer. It is a paradox actually. To think that everyone should be suffering the setbacks of the current state of our economy but then realise that there a few people-the proverbial 1%- whose accounts will come out of the recessed period refreshed.
It is true that a recession presents the opportunity for people to turn things around and in so doing make a lot of money for themselves. It is usually a few people. For example, Joe Kennedy, already rich -may be apocryphal but the story is that his wealth was amassed by insider trading and market manipulation- by the time the Great Depression hit America. Sir Kennedy took all of his money and ‘diversified’. He invested in real estate, movie business and alcohol.
There was also Paul Getty, founder of Getty Oil created who built his empire by snatching up oil stocks that were already massively depressed, at the cheapest rates. Granted,in 1930, he already had an inheritance of about half a million dollars, Getty built an oil conglomerate to rival J.D Rockefeller right in the nick of the Depression.
The opportunities do not only exist for the already rich. True, there are stories of the lesser known people and families who took advantage of harsh times to build money making empires when most were whining and complaining. But let’s not talk about them here. Here, we want to talk about the 1% that control much of the resources and how they increase their control during the harshest of times.
Obviously the concept of the rich always getting richer is no new thing but how is it possible that at a time when people are losing jobs and spending through their savings faster than they can replenish, certain individuals and entities can have the resources to buy the country out of her troubles. Not for lack of better means of expression but because that is exactly what might soon happen in Nigeria.
Last week, richest man in Nigeria, Aliko Dangote offered advice to the Nigerian government on how it can take the necessary steps for economic progress to be restored within the shortest possible period. His first suggestion was that the government should pursue the path of liquidity by unburdening itself of assets including shares owned in some joint ventures the country has in order to gain some money to stimulate the economy or shore up our depleted reserves.
So if the government sold refineries for example to private investors then it takes much of the financial burden- of fixing and getting them running and ready to fully function- away from it. And icing on the cake? the government is allowed to broker deals that will only pass ownership of the said assets to the investors for an agreed amount of time, after which ownership reverts to the government.
Sounds all good. But who are these private investors that can afford to buy a country’s assets and still have spare change to fix them up. And still be open to returning said assets after a while? Only the ones who already have money as much as Nigeria should have shored up in her external reserves. And that’s how they get even richer.
It certainly doesn’t paint the suggestion, however valid, in a good light. First, no one is going to buy something that has become the seller’s liability at full price. So they will get our national assets at a very good bargain. It already doesn’t sound good but it gets worse.
They fix them up and take control. Not just over their newly acquired ventures but also over the country. Classic case of he who pays the piper. It doesn’t take much analysis to see that eventually, the few who can manage to snag an asset or two will then be the controlling 1%. In Nigeria’s case, it’s the existing 1% and they just extend their reach and control.
And if the TUC, NLC and all the other opponents of the move to sell government assets lose this battle, the rich will still get richer by other means. In fact, they already are. Think about the exchange rate when they shored up their foreign currency reserves and how much each rich-foreign-currency-owning rich man has. Just by having money stored up somewhere. The worse hit the Naira gets, the better for them.
Definitely a great time to be rich in Nigeria.
We can join the rich.