The Insight by Lateef Adewole
There is a senior friend of mine with whom I regularly interact and discuss many burning issues concerning Nigeria and around the world. He is a financial expert and well grounded in economic matters. He has been involved in politics of Nigeria and has held prominent political positions before. Whenever we were on such discussions regarding Nigeria, his opinions were usually ‘too strong and unrealistic’, in my opinion.
I often asked him how he thinks such near ‘idealistic’ solutions can be administered to the problems facing our country, with its complications and diverse interests, often selfish, spanning political, tribal, religious, and social strata. These interests influence the actions and inactions of political leaderships. So, how do we navigate such complexities to get things done? His repeated answer is: “you can’t make omelette without breaking egg.”
This was precisely what came to my mind as I watched Professor Kingsley Moghalu spoke at the last Leadership 2023 Conference and Awards, which took place this Tuesday, 5th of March, 2024, at Transcorp Hilton Hotels, Abuja, FCT. Professor Moghalu was the Keynote speaker. The topic was: “An Economy In Distress: Which Way Forward?” I watched him dissected the topic, spoke frankly and proffered concise and precise recommendations to our problems, many of them very ‘brutal’, he spoke like my senior friend.
Ironically, the two share a lots in common as I highlighted earlier. My friend, a technocrat, was a former Managing Director of a bank also, many years back. He too, loves to distance himself from being a “typical Nigerian politician”, despite that he was deeply involved for many years and he understands the ‘game’ well, just as Moghalu stated categorically at the start of his lecture. The only difference is that Moghalu does not understand how the Nigerian politics is played or couldn’t play it, hence, his ‘failure’ in his political attempts.
Who would have imagined that a less known person would snatch the presidential ticket of the African Democratic Congress (ADC) from him, in their primaries in 2022? Mr. Dumebi Kachikwu defeated him at that primary with 977 votes against 589 scored by Moghalu. Sincerely, I was pained by it. I admire Professor Moghalu for his brilliance, articulation and zeal. I have followed him since his first coming in 2019 when he was the presidential candidate of the Young Progressive Party (YPP) in that election. His presence, as well as some other young, brilliant guys, who got tickets of other smaller parties, actually added spice to the campaigns and the election.
Although, anyone who understands how politics is played in Nigeria would have known that all of them were going nowhere. “Dey just dey play.” But at least, they gave us other perspectives, different from what we were used to, from the traditional politicians in APC and PDP in particular. In 2023, the stake was too high, unlike in 2019 where it was a reelection for an incumbent. So, the absence of people like Moghalu, Tope Fasua, and others, denied us that flare.
So, as he started his lecture, he threw in a caveat that he was speaking purely as a professional, technocrat and a patriot, so the audience should not filter his speech with different lenses of politics or ethnicity, which is our usual ways as a people.
Why do I become so interested in that lecture? It is because it resonates with what I believe, largely, that the country needs if we are to move forward. It is not a silver bullet but it provided many practical and practicable solutions that can impact the country positively if the leadership has the will to implement most, if not all, of them. There are critical political issues he avoided delving into, especially the structural deficiency that plagues Nigeria- restructuring.
He opened the lecture with a very instructive statement. “Every choice we make has consequences. But we have no choice over the combined consequences of the choices we make.” He lamented the past ruinous years that brought us here, particularly the last ten years, he called it the “locust years” where we had: “unprecedented mismanagement of fiscal policy; unproductive external borrowing; unnecessary budget deficits; illegal Ways and Means lending to the FG by the CBN to the tune of N30 trillion; and unprecedented corruption.” Who could fault him on all of these?
As the consequences, Nigeria has been battling with “hyperinflation, depreciation in value of naira, humongous debt burden, challenge of revenues, unemployment, and extreme poverty.” While he blamed past administrations for creating these problems, he pointed out some fundamental mistakes that the current administration made when they took over, which also worsened the depressing situation they inherited.
They include: “the precipitate nature of introduction of the subsidy removal policy; floating of naira in a loose monetary environment; late appointment of substantive CBN governor; Monetary Policy Committee (MPC) was not in place, which lead to policy uncertainty that affected investors’ confidence, even when they lauded the policies; and took too long to form the cabinet, which later turned out to be more of political patronage than meritocracy, in what he referred to as prioritising politics.”
Definitely, people involved in all he highlighted might disagree with him in some. He restated for the umpteenth time, his film support for these policy decisons of the current administration on removal of petrol subsidy and the unification of the exchange rates. He only had problem with the processes of their implementations. This is understandable as it is not expected that everyone must think and act in the same way. Like the Minister of Information, Alhaji Muhammed Idris Malagi, who represented President Tinubu at the occasion, disagreed with the perception that the Nigerian economy is depressed.
I often get tempted to agree with those who usually suggested that the palliatives and other measures to cushion the effect of petrol subsidy removal should have first been put in place before that decision was taken, which formed their only basis for criticising it. As we know, all the three frontrunners in that presidential election, Tinubu, Atiku and Obi, were unanimous in their campaigns to remove the petrol subsidy immediately the get to office.
However, to delay much longer might not be practical and practicable in a country like Nigeria. In the first instance, everything that we need to cushion any hardship can never be provided by any government, not in six months, not in one year. How could things not done for decades since Nigeria has existed would suddenly be provided in short time just because government planned to remove petrol subsidy? It won’t work. The decision would never have been made. So, I supported the immediate removal.
There was also no provision in the budget beyond June 2023. The FG was already owing NNPCL over N2 trillion in outstanding subsidy payment. Where would the money to continue come from? Also, further delay by the new administration could jinx it and weakened the resolve of the president. After the citizens might have settled down to enjoy new government, administering such bitter pill at a later time would be like eating bitter cola after drinking coke. The oil subsidy cartel could have also found ways to worm themselves to the government such that taking such hard decision that affects them becomes more difficult.
We can all see how bank owners and their top executives are having field day with our dollars. I have written many times that the government, through CBN leadership, needs to seriously scrutinise the banks. In a challenging Nigeria economy of today, only banks seem to be flourishing. They declared huge profits after tax, with the owners living large. Where were such profits coming from? What businesses are banks doing and supporting to bring such returns? I have questioned this many times.
In the forex business chain, banks are critical stakeholders. In fact, they receive dollar allocations regularly from the apex bank with the mandate to forward to the end users who genuinely need them for foreign transactions. But, how many people can boast of getting any dollar in banks when they need it? I have never gotten. Same as many people I know. So, where are the dollars given to the banks? What are they doing with them if not criminal round-tripping, speculating against naira, which has driven its value to a hole? How could any government allow such criminal economic sabotage while the rest of the country suffers the consequences? That’s unacceptable!
Professor Moghalu adduced to this fact in his lecture too. He reminded his audience how they ‘knocked’ the banks’ heads hard and brought them down to compliance. He recommended the need to make examples of a few banks found to have committed infractions. This will serve as deterrent to others and make them sit up. He didn’t mince words. Just like my senior friend often proposed. Is the government, through the CBN, ready to act appropriately, not minding whose ox is gored? That remained to be seen.
In that lecture, he discussed some factors he felt were responsible for the challenges facing Nigeria, not just now but historically. I will briefly highlight them here. One. Absence of nationhood. In my opinion, as critical as this could be to the development of the country, Nigeria is not a nation, can and will never be. Nigeria is made up of many nations with clear differences ‘forced’ together by the Britain for their own greedy and selfish commercial interests when the northern and southern protectorates were amalgamated in 1914, without the consent of the constituents. They didn’t do so for the benefit of the people concerned or advancement of the newly formed country then, whether immediately or in future. This is at the root of our problem. So, when I listened to Moghalu mentioned it as a problem, I agreed but not in what he felt should have happened, which might never happen.
Two. Bad governance. This is a given. It can never be overemphasised. This is responsible for many other failures as it is caused by leadership. Most political leaderships are for “self-aggrandizement, corruption and ethnic irridentism”, according to him. Three. Ad-hocism and lack of strategy. Nigeria likes kneel-jack approach to issues, instead of formulating well robust strategy to address them. Such is the palliative economy adopted after removal of petrol subsidy. I have never been in support of such, since the time of former President Jonathan, to Buhari and now. This is because, it is always fraught with fraud and corruption as could be seen in the different revelations about monumental frauds committed under the ministry saddled with that responsibility in the last and present administrations.
Four. Absence of philosophy and knowledge. He talked about the lack of clarity as to what we want to be as a country. Is it capitalist, socialist or mixed economy? We have drifted from one to the other as governments changed over the years. No national philosophical position. Five. Financialisation and De-industrialisation. Nigeria has continously been de-industrialised over the years. Yet, we expect our currency to be strong without being productive. We are consumption economy not a production one.
I usually laugh when some supporters of a presidential candidate claim that he will transform Nigeria to a production economy from a consumption one, as he usually mouthed during the last campaign. This is a person who is one of the biggest importers of all manners of foreign goods to Nigeria in over four decades, which destroyed our economy and the value of our currency, without transitioning to manufacturing of these goods locally in forty years. How can you give what you don’t have? Big joke!
Six. Electricity. No economy can survive and or grow without adequate and stable power supply. None! Moghalu recommended that, at least, 20,000MW needs to be produced in Nigeria. That’s actually not new. The plans have been on ground for many years. To actualise it is what matters. Geometric Power Limited has just started to light up “my Enyimba city”, Aba, with their recent commissioning of their power station in Alaoji, Aba, in Abia State. I wish them success. Such should be replicated across the country, particularly in industrial zones. Seven. Population crisis.
Solutions to problems are simply reversal of that problems. However, Professor Moghalu proffered some specific solutions to the economic challenges. One. He suggested that FG needs to raise N20 trillion bond to finance strategic projects which he christened “3-in-3”. This is to focus on 3 strategic critical areas and deliver them within 3 years. He suggested railway to link all the state capitals of the federation, mass quality and affordable housing, and agriculture.
The second recommendation is for fiscal policy to wake up. The political leadership must allow independence in decision makings as they affect fiscal policies to allow for “objectivity, merit and competence, and not parochialism and subjective interests.” Three. End oil theft and corruption in Nigeria. Four. The CBN should continue the monetary tightening as they have started and go hard on banks found sabotaging government efforts. Five. Careful consideration of taking stabilisation funds (loan) of about $20 billion from IMF/World bank to boost foreign reserve and stabilise naira value. He emphasised ‘careful consideration’ to determine the merits and demerits of doing so.
Six. President Tinubu should appoint full-time, highly technical economic team, made up of seven professionals with high competence in seven areas: Agriculture economy, Industrial policy, Labour economy, Business economy, Trade policy, Fiscal policy and Development and Political Economy. I totally agreed with the last suggestion. There is need to have experts who watch the economy in various sectors and advise the president as appropriate on the direction to take at every turn. This makes his job easier.
Seven. Cut down the cost of governance. He lamented that budgets done in Nigeria are bleeding the economy as 50% of their contents are wastages. He termed them “budgets of jibiti (fraud)”. He also suggested that FG should sell off moribund assets to raise funds for developmental purposes. End palliatives and replace with well-structured Social Security System. Implement population policy, revamp cabinet, adopt and domesticate 24 Point Private Sector Bill of Right, produced by Africa Private Sector Summit, which he chaired.
He concluded by advising that it is time we jettison what he called ‘the god of small things’ like corruption, tribalism, cronyism, nepotism, and mediocrity. And adopt the ‘god of big things’ like meritocracy, strategy, discipline, competence, integrity in government, and organisation principle. That lecture was loaded.
As beautiful, educative and inspiring that lecture was, as long as technocrats see politics as a dirty game, it might remained at the realm of lecture (paper), without implementation. Politics is fundamental to transformation of any country. No matter how brilliant the ideas of technocrats are, without pushing them through ‘real’ political involvement, nothing will happen. I used ‘real’ advisedly because, we see them ‘breeze in, breeze out’ once in a while, not wanting to fight dirty, they will get nowhere.
Like Professor Moghalu mentioned of ‘Ikoyi vs Fadeyi economy’ in a viral article on social media, same is applicable to politics. You can’t be using ‘Ikoyi’ politics to tackle ‘Fadeyi’ politics. It was ‘Fadeyi’ politics they showed him at the ADC primary. I suspected that it might have been a deliberate plot to neutralise his influence to avoid dividing the votes that went to Peter Obi since they are both from South East, Christians, loved and admired by the youths, and shared same followers majorly. Nothing is impossible in politics.
Technocrats should stop being on the political fringes. They should get down to business. By the way, who are pure politicians now? Most people in politics now have background as technocrats. Fashola, Osinbajo, El-Rufai, Soludo, Otti, and even President Tinubu, an international accountant. So, what else makes a technocrat? What is important is for all hands to be on deck to move the country forward. I hope that if the country’s leadership reaches out to Professor Moghalu to come and serve his fatherland, he will be ready to do so.
May God continue to protect us and guide us aright.
God Bless Nigeria.
You can follow me on:
Twitter: @lateef_adewole
Facebook: Lateef Adewole
Email: lateefadewole23@gmail.com
Whatsapp: +2348036034685
Share, forward and retweet, as sharing makes love go round!
March 9, 2024.