From Isaac Anumihe, Abuja
Nigerian economy on November 21, 2020, plunged into recession not only because of COVID-19 pandemic effects or #EndSARS protests, but due mainly to wrong application of economic policies of the government.
Adumbrating on these misplaced policies, at the just-concluded Nigerian Economic Summit (NES), the former Education Minister and Director General of Bureau of Public Procurement (BPP), Dr Oby Ezekwelisili saw no reason the president of the country should sit atop the petroleum sector when the sector should be deregulated and liberalised like the telecoms sector.
She also took exception to the closure of the nation’s borders and banning of certain items useful to the development of agriculture sector – the same sector the government is trying to protect.
In this interview, Ezekwesili, who was equally the former African Region Vice President, World Bank, questioned the competence of people at the corridors of power. Excerpts:
To what extent did #EndSARS affected the economy?
The impact of #EndSARS will have to be analytically established. Intuitively, people will say that it has the tendency to affect economic activities. For example, people can decide that certain investment/choices they made would have been done differently because they think that the country is unstable. So, that perception of instability will be there. So, we are about one month into EndSARS. We have reduced the foreign investment coming to our destination. So, it shoots the conversation into what were we not doing well before this exogenous shock of the COVID-19? Nobody has asked whether COVID-19 has an impact. It should have an impact because as an economist it should have an impact. It channels through most significant source of foreign exchange earning, export revenue as well as public budget. That is what oil does for us. Oil is significant in our foreign exchange earning. it is significant. So, the global recession threw us into the same kind of volatility we always suffer. So, here we are as a country always crying whenever something happens in the global environment as far as oil is concerned. And so, the question we should be asking ourselves is that how is it that accidents that were foretold always happen to us? It is a very important question to ask because it helps us to take ownership of our problems. It is said that until you take ownership of a problem you cannot solve it. If you keep deflecting the problem it won’t be solved. So, what are the few things that I see as a path of recovery. They say that growth has come back, but I would not celebrate the level of growth that has come after the 2016 recession. 2016 recession was an incredible opportunity for us to gain consensus towards the most radical sense of reform. You know when people are in crisis that is when they can build consensus and get people to candidly agree on the basis of evidence. The thing about economic management is that you can wean the economic management. When you are running an economy well, it counts. If the economy is not being run well it also counts. You can’t say I am running it well, but certain things are not happening. Take for example, you can bring economic management under three broad categories. You can bring them under sound economic policies, or sound policies in general; bring them under strong institutions. You can bring them under sensible priorities of public investment that will become a magnate for private investment. These three things are struggling. They were struggling in our country, in the economic management. Often, the intension of government goes in this direction. What would we do differently? Number one, if we do something like sound economic policies, we really mean as a country to determine what economic philosophy underpins the way that the private sector and the government play their roles. Even a communist China ultimately understood the function from the market and really gave a basis for the market to function.
What will you say those policies will be to see us go in the right direction or how do we retool what is broken about how we make our policies?
Let us assume that I am in the midst of people in the rural community of Nigeria, I have no doubt that five to six of them would have a telephone because we used to be a country that spends more than N200 billion at a time that is convertible to something close enough to $150 billion on achieving 250,000 telephone lines because of something called NITEL. And you recall that what NITEL did (we lived in Lagos then) was that the phone will ring in your house today and everybody will celebrate, but it would be for one week. The next week it will ring in another person’s house and it’s dead in your own house. And yet we spent so much money in that infrastructure of 250,000 telephone lines. So, when I am speaking to these compatriots in my rural community I will say to them that there is something called policy and that every time that the right policy happens there is a response that happens to the people for whom that policy is meaningful. For example, when we decided to liberalise and deregulate everything in the telecoms sector, we had people in the government who said that communication is the commanding height of the economy. It protects our national interest for us to have it under government’s control. But evidence has proved that to be wrong because we deregulated, liberalised – did all the structural and institutional things that needed to be done and today I am able to sit with this community and six out of every 10 of them have a telephone line because we are closer now to 100,000,000 mobile telephones in the country. It was policy that did it because the simple definition of policy is solution to a problem. So, take a sector like oil and gas sector, what are we doing? It is almost like there is a mindset that a president of this country has to sit atop the oil sector. We know what the deregulation and liberalisation of the sector can do for this economy. By the way, the liberalisation, the deregulation of the telecoms sector made telecoms to begin to contribute to our GDP. As a matter of fact, when you look at the two recessions that we have had, while other sectors of the economy were going in the negative direction of the contribution to growth, telecoms is holding us up. So, imagine what would happen if we decided on a massive agenda of deregulation of the economy. The interventions the government is doing in agriculture is a good thing. But frankly speaking, agriculture production and productivity require an intense set of policies that will not include the closure of borders. It will not include the banning of certain kinds of foods that the farmers are going to need. Agriculture productivity has to include agri-business. At every level of agric value chain, opportunity of expansion is available. Take a sector like aviation. When we say we need to set up our national airline, they will say national airline again? What is wrong with us? We haven’t recovered from the first journey and we want to embark on a second one? When you invest in projects that private money will find interesting and engage in efficiently like we saw in telecoms, you are basically punishing your poor. The slim resources that you have should go to the pro-poor investment. Those pro-poor investments matter. That is what lifts people to the place where they can engage in economic activities. What I see today is that we are struggling. We are struggling from economic clarity. We do not have an abiding faith. And I thought we had reasonably achieved it. Remember that this country was growing at an average of 6.5 per cent per annum for almost a decade and a half. What did we do right that we are not doing now? We should ask ourselves. I am worried about what the CBN has become in this country. The CBN has become the be-all-and- end-all of our economic life. This is not right. Look at us. Only 10 per cent of the 100 per or 200 per cent of the young people who enter the labour market would find anything ILO would define as decent job. We should ask ourselves what the rest are doing. That means that if we don’t expand the opportunities of this economy by deregulating – a lot of the times the public officials don’t like deregulation. I remember when we did the one for the telecoms sector, the then minister hated the economic team because it was the end of an era. Government officials like where they can make decisions because the decision point is a point of control and it is a point of opportunity, but to the detriment of the rest of society. That is why we should take those three sound policies and elaborate on them. We have to ask ourseveles what has happened to those institutions that were even on their way to becoming solid. Look at the EFCC, look at the Bureau of Public Procurement, look at even BPE. They are institutions. What happened to them? The rule of law has become the man who sees the president. Then the third part where I talked of priority of investment. Think of public private partnership and sub-national and national levels. We are not going to solve these problems until we have a political conversation on the structure of the nation state. The structure of the Nigerian state today benefits the politicians and not the populace. I don’t like people just talk about structure. I like to think from the purview of structure follows function. What is the function that we want to sell? I would say that the function that we want to sell is really productivity and competitiveness of the Nigerian state, the Nigerian people, the Nigerian economy. If that is so how do we organise ourselves in order that we can serve these two functions. How do we get higher productivity at every level of economic activity in our country? How do we get productivity from every individual in our country?
Agriculture sector has received a significant amount of funding but food inflation is placing ahead of 16 per cent which means that for every naira that we are spending we are getting less than it. Is it right?
The divergence between agriculture and the output speaks to why we shouldn’t be emphasising that the young should go to the farm. We are going to deploy our best talent to the sector that requires certain kind of technique and methods to make it highly productive. We are currently dealing with low productivity agriculture. That is not where you send your demographic dividend to. What I worry about is that empirical evidence helped a lot of countries to avoid a lot of pitfalls. So, you don’t have a situation where you disdain economic evidence. You do it at your own peril. Economic evidence has shown us across many countries that low productivity sectors are not going to yield much for you until you do the things that make them productive. And the things that make them productive are a range of things that we are just talking about along the lines of sound policies and I find it very painful that we sometimes are not deliberate in the way that we are attacking these problems. So, we must do what we must do. There is something about countries playing with their first eleven. Is Nigeria playing with its first eleven? The truth is, across the spectrum of public sector, ( I am not talking about ministerial level) we need to ask ourselves, what is the level of competence? What is the cumulative IQ of governance in our country today?