…By Abdul Rahman Aliagan
It was certainly not the kind of outing the Progressive Governors Forum had envisaged when they invited Prof. Charles Soludo to address them as guest speaker in Kaduna, the old political capital of the North.
The setting was the fourth edition of the Progressive Governance Lecture Series held recently and which had as theme: “ Building the Economy of States: Challenges of Developing Inclusively-Sustainable Growth.’’
Having been shut out of the klieg lights since his illfated ambition to be governor of his home state collapsed, this auspicious outing for the urbane former governor of the Central Bank must be seized with both hands, even if to the discomfiture of Vice President Yemi Osinbajo and the APC governors all gathered at the forum.
President Muhammadu Buhari, the leading economist said, has not come to terms with the economic realities of the day as he has failed to combat the economic challenges confronting the nation.
Soludo said the president’s economic policies, since he took over last year were still based on campaign promises!
TimeNigeriaMagazine reports that the event held only two days after Soludo’s successor and former CBN Governor, Sanusi Lamido Sanusi, warned Buhari not to lead Nigeria like former President Goodluck Jonathan did.
The Emir of Kano had stated that what Nigeria was going through was foretold, but the Goodluck Jonathan administration deliberately ignored the warnings, counselling Buhari not to toe this path.
“Nigeria is facing unprecedented and tremendous political and economical challenges with global and local dynamics.
“Regardless of these challenges, opportunities and possibilities abound if we address some fundamental issues.
“ The key to achieving this is to have a development plan that is anchored on realising inclusive and sustainable growth.
“Inclusive and sustainable growth cannot be achieved without conscious efforts to deconstruct the dynasties of poverty and maximise states and Nigeria’s comparative and competitive advantage.
“Nigeria is not secured and can be made politically sustainable through the de-strangulation of the hold of the Federal Government over states.
President Buhari
“The APC should go back to its manifesto and instigate framework that will engender the atmosphere for growth as Nigeria cannot develop with the current structure where institutions are created only to share from the federation account,’’ Soludo, on his part, had said at the memorable lecture.
Waxing lyrical on the anti-graft war, Soludo said the president was only scratching at the symptoms of corruption and not the causes of the malaise itself.
He added the clincher by warning the administration to start thinking outside the box, rather than continue to blame the past government for the nation’s economic problems.
Incidentally, controversial governor of Kaduna State and one of the staunchest supporters of the president, Nasir el-Rufai, was to admit at the forum that “Nigeria is facing an unprecedented economic crisis, most of it arising from circumstances of the present and of the past. ‘’
While the forum may well have been a huge success for its provision of a sober and intellectual platform for deep introspection on the economy, it was a public relations disaster for the ruling APC government at the centre.
As many of the APC acolytes at the Kaduna gathering filed out of the venue seething with reticent anger over the blistering attack on the Buhari administration for its seeming cluelessness in the management of the economy in the last one year, it was the fiery activist senator from Kaduna Central, Shehu Sani, who took on the messenger rather than the message.
The senator, in an email sent to Premium Times barely a day after the lecture, said Soludo was entitled to his opinion, reminding him of the role he played in bringing down the country’s economy.
His statement, brimming with venom, further said: “If Soludo and his government had actually implemented such lofty ideas of reforms, we couldn’t have found ourselves where we are today.
“It’s too early to forget the legacy of cronyism, elitism and vindictiveness that occasioned the past administrations.
“Soludo was lucky to serve under a government that was powered by $140 per barrel and without the headache, heartache and bloodshed that has become of Niger Delta and the North East.
“Soludo needs to be reminded that most of those today on trial for stealing our public funds were the same people rooted in the government he served before GEJ.
“ Yes PMB is tackling the ‘symptoms of corruption,’ but the symptoms were there for 16 years.
“If Soludo and others have combated the symptoms, PMB could have now focused on the ailment. It’s not in contention that blame game by the PMB administration against GEJ must end but under PDP three Governments for 16 years, hardly a day passed without the same blame game on late Abacha.”
Sani also attacked the APC governors for inviting the former CBN governor to speak at the lecture series.
“Those who invited Soludo did that to rubbish PMB’s economic policies that they don’t have the balls to do.
“What is the reason and the logic behind APC chieftains inviting a PDP economist to lecture them on the economy? The very party they consistently deride for ruining this country for 16 years, ?’’ he had queried.
Indeed, this is not the first time Soludo would be taking the Buhari administration to the cleaners.
Speaking in Lagos last year at the third anniversary of Realnews, the former CBN boss said the apex bank’s forex policies are not in the best interest of the economy, arguing that fixed exchange rate is a disincentive to investors.
Dwelling on the theme, ‘It’s the Nigerian Economy, Stupid,” Soludo said the Treasury Single Account (TSA), the CBN’s foreign exchange (forex) policy and bailout funds for state governments are all in bad taste.
He also believes that the removal of fuel subsidy should be done immediately and that capital controls policy of the apex bank is chasing away investors.
Soludo argued that the politics of naira devaluation and CBN’s promotion of fixed exchange rate was not good for the economy, saying Nigeria was currently facing trade shock.
“The economy has always done worse in fixed exchange rate regime. Capital will fly out.
“ Such policies do more harm than good. Capital flight in a country that is in dire need of capital is bad. Private capital is on the run,” Soludo said.
He believes forex restrictions on the import of 41 items by the apex bank is a mismatch and is causing the economy to go down.
“What is going on in the capital market is not an accident. Small and Medium Enterprises (SMEs) suffer the most.
“ You must have an exchange rate regime that overvalues or undervalues the local currency. No economy has succeeded with overvalued exchange rate.
“In my five years at the CBN, we maintained undervalued real effective exchange rate.
“ Delayed adjustment of the naira value is dangerous because investors don’t wait.
He said the forex policy of the CBN has triggered massive lobbying for foreign exchange.
“Lobbying for forex is the new trend now. Why must people get forex to pay for school fees, medical bills and mortgages abroad.
“ Such expenses cost the economy billions of dollars and are creating briefcase millionaires.
“ It is creating instant millionaires,” he said.
In the last one year, the administration had been at the receiving end of caustic criticisms over its hazy economic blueprint.
Many would recall that in his new year message to Nigerians as 2014 ebbed out, Buhari had outlined a five-point change agenda to be implemented if elected.
The then APC presidential flagbearer had pledged to change the nation’s debilitating dependence on crude oil to earn revenue.
Buhari also pledged to provide mass employment and adequate security, fight corruption as well as improve infrastructure and health care.
A statement by the then Director of Communications in the Buhari Campaign Organisation, Mr. Dele Alake, said: “I have unshakeable faith that 2015 will be the year of change.
“ Now some of you have asked me: what exactly does ‘change’ mean?
“I have taken time to explain this at different opportunities, but on this special day, let me remind you in five short statements.
Change means:
- A country that you can be proud of at anytime and anywhere: where corruption is tackled, where your leaders are disciplined and lead with vision and clarity; where the stories that emerge to the world from us are full of hope and progress.
- A Nigeria in which neither yourselves, nor your parents, families or friends will have to fear for your safety, or for theirs.
- A Nigeria where citizens get the basics that any country should provide: infrastructure that works, healthcare that is affordable, even free; respect for the environment and sustainable development, education that is competitive and outcome-oriented in a knowledge-economy.
- A country that provides jobs for its young people, reducing unemployment to the lowest of single digits and providing safety nets so that no one is left behind.
- A Nigeria where entrepreneurship thrives, enterprise flourishes and the government gets out of your way so that you can create value, build the economy and aggressively expand wealth.’’
Suddenly confronted with the reigns of power, the administration appeared perplexed about how to implement its change agenda for the economy as it meandered between one platitude or the other.
It was Osinbajo who was to provide some sense of direction some months ago when he unveiled the administration’s somewhat presumed agenda at the 45th Annual Accountants Conference and 50th Anniversary celebration of the Institute of Chartered Accountants of Nigeria.
The Federal Government, he said, will invest more in social sectors to reduce poverty, including focus on education and job creation.
He said investment would be stimulated in the national school feeding scheme and conditional cash transfer.
Speaking on the topic, “Repositioning Nigeria for Sustainable Development: From Rhetoric to Performance,” he said the multiplier effects of the introduction of the scheme would help to create 1.14 million new jobs, increase food production by up to 530,000 metric tonnes per annum as well as attract fresh investments of up to N980billion.
Lofty as the initiatives are, very little has been seen in specific terms with regards to implementation, even in the din generated by critics agitating for injection of capital to reflate the comatose economy.
This is even as administration’s officials are recoiling when challenged on government’s policy direction on the economy.
The seeming minders of the policy frame work are apparently not helping the administration with their unrelenting policy summersaults and reversals.
Only recently, the Minister of Finance Mrs. Kemi Adeosun, had in an article, said that the focus of the administration was to stimulate the economy and achieve a real GDP growth rate of 4.2 per cent by the implementation of the 2016 budget.
“ The administration is also determined to reduce the cost of governance, extract efficiencies in public service and enhance revenue collections.
“ The administration plans to increase government expenditure on infrastructure i.e. Transport, Roads, Housing and Power, with a view to achieving a substantial increase in gross capital,’’ she also stated.
But at another forum in Abuja, the Minister of Information and Culture, Alhaji Lai Mohammed, had in frustration lamented that the economic situation in the country had gone completely out of the control of government!
Apparently highlighting the administration’s incapacity, Mohammed on the occasion in March told the bewildered audience of a radio station in Abuja that the global economic meltdown is having a negative spiral effect on government
He explained that this was so because Nigeria cannot determine the price of crude or gas.
Berating critics of the administration as mischief makers, he said Buhari’s frequent trips abroad, especially to the oil-producing nations, became imperative because of the urgent need to rally support for the stability of the global oil prices and also to attract Foreign Direct Investment FDI into the country.
Hard as the administration’s officials tried to parry the controversy over constitution of an economic management team which many felt was non-existent, the deluge of criticisms would not abate and the government was in February forced to make public those supposedly driving the country’s economic policies.
In a February 26 interview with newsmen, Laolu Akande, the Senior Special Assistant to the Vice President on Media and Publicity, said the team came into existence when the Federal Executive Council (FEC) was inaugurated in November, 2015.
At the head of the team is Osinbajo, Nigeria’s current number two citizen and Senior Advocate of Nigeria (SAN).
A former lecturer at the University of Lagos, he also served as Commissioner for Justice and Attorney General between 1999 and 2007 in Lagos State.
Also in the team is Senator Udoma Udo Udoma , a businessman with vast experience in the financial sector.
He has been at the top position in some of Nigeria’s leading banks and industries and is the Minister of Budget and National Planning.
He was also a former lawmaker in the Upper Chambers of the National Assembly.
Kemi Adeosun, the former Commissioner for Finance in Ogun State, is one of Nigeria’s youngest ministers and a member of the team.
Ironically, she was recently lambasted for an arithmetic error she allegedly made when she said 16 + 6 = 24. She is today the Minister of Finance.
Also in the team is Okechukwu Enelamah, an Igbo-born minister with vast years of experience in international businesses. He is the Minister of Trade, Industry and Investment.
Of course, Godwin Emefiele , who heads the Central Bank of Nigeria, is also a member of the economic team.
He used to be at the top management level of one of Nigeria’s new generational banks, Zenith, before he was made the CBN governor.
Others are Chief Audu Ogbeh, an old political warhorse and now Minister of Agriculture as well as Mohammed, the increasingly vociferous Minister of Information and Culture.
Making up the rump are the Director-General of the Debt Management Office (DMO) and some permanent secretaries who presumably have relevant functions to play in reviving the economy.
But is this the picture of a power-packed economic management team? Can this team drive the Buharinomics change agenda to Nigeria’s Eldorado?
Analysts are sharply divided at a time the economy is tottering on the brinks of collapse.
The scenario is indeed scary, especially with the administration’s abandonment of its
its currency’s dollar peg.
TimeNigeriaMagazine reports that since the abandonment of the peg policy, the naira has fallen 61 percent against the U.S. dollar, creating extreme difficulties for both foreign and domestic businesses.
Nestle Nigeria, for instance, saw a 94 percent drop in profits as the currency depreciated. The currency’s move also led to Nigeria losing its title as Africa’s largest economy, next now after South Africa.
With the price of oil, which accounts for 70 percent of government revenue and 95 percent of export income, crashing to under $50 today, government revenues plunged, leaving Nigeria with a $7 billion budget deficit.
Even worse, the government’s prolonged peg of the currency to the dollar led to foreign exchange shortfalls and import barriers on items such as margarine, private jets, wooden doors and even toothpicks, significantly crippling local and multinational businesses.
These policy measures, it is said, forced United Airlines and Iberia Airlines to quit the Nigeria while domestic operators battled with painful fuel shortages.
It is just as well that the Niger Delta Avengers have observed a ceasefire, having contributed to Nigeria’s loss of 700,000 barrels of oil and jettisoning of the country’s title as Africa’s largest oil producer.
In all these, it is no surprise that growth slowed from 6.3 percent in 2014 to 2.8 percent last year, and the IMF says the economy could shrink by 1.8 percent in 2016.
In June, inflation rose to an 11-year high of 16.5 percent, while business confidence has hit all-time lows.
The unemployment rate is over 12 percent while power supply remains epileptic, with major electricity companies threatening to cut off power if the government does not pay them the huge bill owed.
With the human dimension of the crisis in the North East Zone in which more than 2.2 million people have been displaced, the challenges facing the country and its economic managers could be better be appreciated.
This may well explain Buhari’s unprecedented move to request for emergency powers in tackling the economy.
Is this the last act of redemption for Buharinomics?
Having surveyed the polity and concluded that there was an urgency which some of the extant laws will not permit, it was assumed that the current recession may be longer than expected.
Time NigeriaMagazine learnt that the executive bill entitled, “Emergency Economic Stabilisation Bill 2016,” is to be presented to the National Assembly when the Senate and the House of Representatives resume from vacation on September 12.
It was learnt that the bill, if approved, will give the president sweeping powers to set aside some extant laws and use executive orders to roll out an economic recovery package within the next one year.
Specifically, it was further learnt that Buhari will be seeking powers to among others:
- abridge the procurement process to support stimulus spending on critical sectors of the economy;
- make orders to favour local contractors/suppliers in contract awards;
- abridge the process of sale or lease of government assets to generate revenue;
- allow virement of budgetary allocation to projects that are urgent, without going back to the National Assembly.
- amend certain laws, such as the Universal Basic Education Commission (UBEC) Act, so that states that cannot access their cash trapped in the accounts of the commission because they cannot meet the counterpart funding, can do so; and
- to embark on radical reforms in visa issuance at Nigeria’s consular offices and on arrival in the country and to compel some agencies of government like the Corporate Affairs Commission (CAC), the National Agency for Foods Administration and Control (NAFDAC) and others to improve on their turn around operation time for the benefit of business.
The presidency has already denied the planned request for emergency powers. The Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, said in a statement that the economic management team was considering several measures to urgently reform the economy but they had not yet been communicated to the president.
The vice president’s spokesman stated that those measures had also not been passed to the Federal Executive Council and the National Assembly.
“The economic management team has indeed been considering several policy options and measures to urgently reform and revitalise the economy.
“ Some of these measures may well require legislative amendments and presidential orders that will enable the executive arm of government move quickly in implementing the economic reform plans.
“As far as I know, this has not been passed on to the president, the Federal Executive Council or the legislative arm of government. So, at this point, there are no further details to share,’’ he said.
Inspite of the denial, the development had been the subject of animated debate among analysts.
Does the president need emergency powers to tackle the economy? The Chairman of the Senate Committee on Ethics, Privileges and Public Petitions, Senator Samuel Anyanwu , (PDP, Imo East), said lawmakers would support it if it would stimulate the economy.
“Anything that would revamp the economy, reduce unemployment and put food on the tables of Nigerians would be supported as you know hunger is everywhere in the country,” he told an Abuja-based medium.
But his colleague, who spoke on condition of anonymity, warned that granting sweeping powers to the president would negate the principle of separation of powers between the Executive and Legislature.
“What will be the function of the National Assembly if we grant these powers to the president?
“ He has to be specific on what he wants. Approving this will amount to issuing a blank cheque to him. This will not be good as it will bring about dictatorship,” he told the media outfit.
The National President of the Nigerian Association of Small Scale Industrialists (NASSI), Ezekiel Essien, however, expressed support for the move, saying it was long overdue.
“Most of our contracts go to foreigners. All the monies go offshore. They only take local people here as carpenters and drivers. The money goes out of the country,” he told a national newspaper.
But Ibrahim Sanyi-Sanyi, an economic expert, expressed fears over such a move if it comes to fruition, calling for caution.
He opined that the bill will continue to generate keen interest and intense discussions from scholars, economists, CSOs, the Organised Private Sector (OPS) and public commentators.
According to him, Nigeria has been to this political economic cusp in 1982 and the Stabilisation Act was enacted to address the economic crises of that time.
“ Let’s learn from past experience, benchmark with similar learnings from other countries and appraise the performance of the economic management team to address areas of weakness in order to arrive at a comprehensive fit-for-purpose solution that will assist the country combat recession.
“ Conferring the powerful executive with more powers will come at a great price to due process, fiscal responsibility, legislative scrutiny and check and balances.
“ For me, each case should be treated on its own merit. We have extant laws that guide economic management which we can amend, on need basis, to suit the circumstances we have at hand,’’ he said.
The fears being expressed by many was further accentuated by Ben Akanegbu, a United States-trained professor of economics at the Nigerian Turkish Nile University in Abuja.
Asked if the president should be given emergency powers to tackle the economy, the economic expert retorted: “ What power does he want again? It is tricky in the sense that I don’t want the legislature to give that emergency power so that the president would not turn to become a tyrant, that is the fear.
“ Giving an emergency power will mean too much power to a particular person and it can be abused, if it is abused that is a serious problem for us. The emergency power is not the best for the country at this time.’’
He, however, called for a Nigerian version of the New Deal launched by the Roosevelt administration in the United States when that country was faced with the spectre of recession.
“ I know something like this happened in America in the 1940s, they called it ‘The New Deal’ during President Roosevelt’s administration. The economy was going down.
“ Government invested in massive infrastructure like roads, bridges, and pumped money into the system to reactivate and energise the economy again. I don’t want to believe that Nigeria does not have money. We have enough money.
“ We must think towards that, government must cut tax, employ people and spend money on people.
“ That equally happened after the Second World War, that is the Keynesian theory of total spending in the economy in 1930s. John Maynard Keynes devised the theory of total spending when economy was going down south. Then, what happened he invested in massive infrastructure.
“ We should imbibe the theory of Keynes; government should look towards that and invest heavily in infrastructure and cut tax so that industrialists will be more creative,’’ he told TimeNigeria in Abuja.
Another expert, Dr John J. Chizea, believes the Buhari administration must move fast to implement an economic plan that would redistribute income in order to reduce poverty and drive growth.
Chizea, a lecturer in the Department of Economics, Baze University, Abuja, said:
“ Whether we like it or not the present administration has an economic plan. But what an ordinary man understands by good economy is when things are going well, good life and good food and so on and so forth.
“ Even the gains in the best economy of the world takes time to trickle down. However, there are two distinct things when an economy is growing. The last government was criticized that the economy was growing but people did not really see it.
“ When economy is growing there is also the issue of income distribution. We can say that the last government to some reasonable extent was successful in terms of economic growth but they did not do the same in income distribution because the masses did not see it.
“ A lot of wealth was made but it concentrated in the hands of the few while the bulk of population did not feel the growth in the economy. As to the economic plan, time will tell whether this government has economic plan or not.
“ My point is that they have to work on that economic plan, because if the masses could not have a taste of their economic plan, they cannot win the next election.’’
In a slowing economy which welcomes 13,000 new people to its population every day, will Buharinomics stem the tide? The answer is buried in the fullness of time.
