Fashola: Free market economy an illusion — government always intervenes

Babatunde Fashola, former minister of works and housing, says the idea of a free market economy is an “illusory one”.

Fashola spoke on Wednesday during The Platform, a national conversation organised by Poju Oyemade, senior pastor of the Covenant Christian Centre, to mark 2024 Democracy Day.

The event, titled ‘Democracy and the free market economy’, took place in Ikeja, Lagos.

Fashola, a former governor of Lagos, said the government has roles to play in controlling the economy, adding that Nigeria was initiated into the two concepts that made up the theme of the event — democracy and free market — by the military government.

He recalled that before the privatisation policy, the government controlled all the major businesses in the nation’s economy.

Fashola said Nigerians will have to decide whether they want a free market economy or one in which the government is a major player.

“My concluding position is that the idea of a free market economy is an illusory one. The truth is that the government continues, historically and necessarily, to play a role,” Fashola said.

“In the ideal market economy, what wants to be seen is the unhindered operations of demand and supply, and in that market, the customer is king and the government does not provide props to support that system.”

The former minister argued that when a business collapses in a free market economy, it is allowed to go down with consequences.

Fashola said in many instances in Nigeria, the government has intervened to rescue businesses from collapsing, which is not a hallmark of a free market economy.

“The fact, however, is that some of the strongest apostles of a free market economy are the very first people to reach out to the state as a sovereign to say, ‘come and exercise your power… come and save us’,” he added.

“When COVID-19 humbled the global economy, all the governments of major economies, if not all, did something or another that was inconsistent with market principles.

“They need to restart the economy. Some printed money, some borrowed money, and put them in terms of grant disbursement and aid. That is not a market economy.”