ABUJA: Capital of Nigeria or Northern Nigeria? (2)

LET’S COMPROMISE AND MEET “IN THE MIDDLE” TACTICS/TRICK

The choice of Abuja as the new capital of Nigeria reminds me of one of several manipulations in negotiations called “Let’s compromise and meet in the middle.” This is how it works:

Imagine a very rich seller asking for $200,000 for his house, whose market price was between $185,000 and $195,000. The buyer was also well aware of the market price of the house but unfortunately, his reserved price i.e. the maximum price he could afford to pay for the price was just $170,000. However, the buyer instead of asking the seller for a discount with a promise to pay the balance later, decided to be unreasonable and asked the seller to sell the house for him for $100,000. The seller, of course expressed his surprise and refused flatly to sell his house for that price. The buyer, instead of offering a reasonable price, decided to do a “price manipulation.” After doing some head scratching, he asked the seller to let him have the house for $105,000. The seller again refused. The buyer then increased his price to $110,000. The seller pointed out to the buyer that he was not being reasonable with his offer because the market price for his house was $195,000.

The buyer realising that he was not making any headway, decided to play a trick on the seller. He told the buyer “Okay Mr. S, let’s reach a compromise. Let’s meet in the middle. Let’s add our two prices ($110,000+$195,000) together and divide it by 2.” The seller got hold of his calculator, did the calculation and arrived at $152,500 which was $17,500 less than the buyer’s reserved price of $170,000 but was still $42,500 far short of the seller’s selling price of $195,000. When the seller pointed out to him that his new price was still $42,500 short of his asking price. The buyer told him that he had in actual fact increased his offer substantially from $100,000 to $152,000 which was 50% more than his first offer. But the seller did not bulge. Then the buyer told him that he should not be greedy and reminded him that after all he was his neighbour and moreover, the buyer was a very rich man with uncountable number of houses. He quickly added that selling “just this one house” to him from his numerous houses would in no way make him poorer in any case because the $42,500 difference was nothing to him (the seller.) Furthermore, he complained to the seller that this was the “only” chance for him to ever buy a house in his life, and if he missed the opportunity, his children will become destitute. The seller looked very angrily and with pity at the buyer and said in a harsh voice: “Okay let’s compromise, bring the $152,500.” The buyer thanked the seller and quickly wrote a check of $152,500 for the seller.

A LOSS-WIN TRANSACTION FOR MR. S.

Now, let us analyse this transaction objectively. In this transaction, the buyer saved at least $32,500 (if we assume that the lowest market price for the house was $185,000) while the seller, unfortunately lost at least $32,500 in the same transaction. In other words, it was a WIN-LOSS transaction and not a WIN-WIN transaction which all parties in any business transaction must strive towards.

The buyer was able to secure the deal because he played the “Let’s compromise and meet at the middle” trick on the seller and made the seller to have unnecessary and unjustified “guilty conscience.”

Unfortunately, the seller allowed himself to be manipulated by the buyer. What would you had advised the seller to do in this situation? The seller should had “neutralised” the arguments of the buyer by telling him that it was not a must that he should buy that particular house and since $152,500 was the highest amount he could afford, he (the buyer) would do better to look for another house within that price range elsewhere while he (the seller) in turn would do better by looking for another buyer that could afford to pay the market price of his house. In addition, in reply to the buyer’s statement about his uncountable number of houses, he should had told him that the number of his houses should not be the issue in the deal and that since he was a business man, therefore, he was selling his house to make a profit and not for the sake of philanthropy. The seller should not had given in to the blackmail of the buyer.

This example above illustrated exactly what happened between the North and the South. The North, in this case was the poor buyer while the South was the very rich seller. The North successfully played the “Let’s compromise and establish our new capital in the middle “for the sake of peace, fairness and unity'” trick on the South, knowing very well that the middle, no matter how it was calculated, would definitely be in the North since the north had a larger, but predominantly dessert and impoverished landmass compared to the very rich land in the south. The North used “emotional and demagogic” arguments to lure the South into a very costly and unnecessary project which was financed “completely” by the oil in the Niger Delta.

The insecurity of Lagos as a capital, because of its closeness to the ocean, was exaggerated by the North in order to make it (Lagos) unsuitable for a capital. When the issue of the enormous investments needed to build a new capital from scratch was raised by the South, the North assured us that we, i.e. Nigeria (in this case the South) had more than enough resources to finance the project. The huge investments needed to build Abuja was purposely underplayed. This should not surprise us. After all, Gowon, during his 9 year stagnant and visionless reign, said many times that “Nigeria‘s problem was not money, but how to spend it.” Unfortunately, some Southerners who naively believed in in the “fake, artificial and non-existing unity” of the country fell for this mischievous plot not knowing that they were being manipulated. Other Southerners were bought over with a piece of the action (Abuja contracts)

Thus, the decision to relocate the capital from Lagos to Abuja was in favour of the North alone, in all sense of the word, but cost the South, especially the South-South (the Niger deltans) and South-East billions of dollars that should had been committed into the development of their land. Abuja was a very BIG WIN for the North but a very BIG LOSS to the South, most especially the owners of the resources that was used to finance this elephant project.

PUTTING THE CART BEFORE THE HORSE

As I have said before, building a new capital from scratch is a very, very expensive expenditure even for very rich countries. There was virtually no need for Abuja. The country could have still got along with Lagos quiet well. The decision to build Abuja was a “totally” wrong, unjustified and very costly economic decision for a developing country like Nigeria that could not boast of stable electricity; water supply; adequate and functioning infrastructures; reliable and well-funded educational system; efficient and affordable health care services; adequate pension programs, even up till now. These are what ought to had been tackled first. Th

en, invest heavily in industries, agriculture and information technology in particular. These would had served as an impulse or locomotive that would had driven the economy to great heights. Abuja shouldn’t had been the priority.

FISCAL POLICY: AIM NOT ACHIEVED

There are cases in economic development when large government spending helps to boost the economy. But it was not the case with Abuja and Nigeria. Why? Because virtually all the construction and supply contracts to build Abuja were heavily inflated, imported and last but not the least, they were carried out by foreign companies. So, instead of the contracts creating jobs for Nigerians and boosting our economy, it was the negative effect that we got because the money spent on these projects did not circulate in our economy but were received by foreign banks. Thus, it was a double loss for the South.

TO BE CONTINUED…