Dr. Kalu Idika Kalu, a two-time minister, and Chairman of the Institute for Policy and Economic Development is at home with issues relating to the nation’s economy. In an interview with VINCENT KALU, he said Nigeria is not coming out of recession soon, and urged government to stop giving the citizens false hope that the recession will end this year.
According to him, anyone having such impression lacks understanding of the kind of recession the country faces. He also cautioned Igbo politicians against jumping into the fray because former President Olusegun Obasanjo told them that the time is ripe for them to produce the nation’s president. He however, highlighted how to achieve Igbo presidency.
The country is in recession, how can she get out of it?
From a professional standpoint, recession refers to a situation where capital structures are in place, but the means to sustain the recurrent expenditures that keep those structures working decline because of sudden change in taste and price.
It is wrong for us to think that we are merely in a recession. There is a drop in current receipts from oil and from other exports; we also have a sharp drop in our terms of trade, that is, the import prices weigh higher than export prices, and total revenues are a fraction of what we used to have.
So, we have a big gap in our current revenues, big gap in our balance of payments (the different between imports and exports), therefore, a sharp drop in the ability of our public finance to meet with the needs of government at various levels.
But it is worse than that because it has just exposed that we are not just at lower current incomes, but the capital structures are not even there to raise financing and get them working again.
Here, we still need to build roads, power, rails, mining structures, processing plants etc.
We don’t have the structures, if we had, it is just for us to borrow and get the idle power and others working again.
What is more serious indication of the depression we are in now is that even the manpower is not there. If for instance we got money to have modern high-speed rail, where are the people who are going to operate them? You need along time to bring them.
You need to put so much money into capital structures in order to create the employment facilities before the economy can begin to work again.
You look at the driving tools – the palm tree, cashew nuts, cotton field, ground nuts fields, cocoa farms, all of these are at different levels of disrepair and abandonment. They require large sums of money to restructure them before you can begin to operate them and come back to the previous revenues that you have attained.
We delude ourselves when we don’t realize that this is more than just a classical recession. It is a shortfall in revenues that have now exposed very deep structural problems within the economy. So, we have to address it from that standpoint; it is not a short-term phenomenon.
It is not just a question of what can we do to get the economy running again? A lot of these things require a minimum of one year. Talking about paper, it takes a very long period of gestation to plant the trees to produce papers. Palm trees take time to produce oil, and you have manage the farms the way they do in Malaysia, a country that came here and took away palm oil seedlings but is now exporting 30 times what Nigeria exports. We also import palm oil from them.
We have to acknowledge that this is more than a recession, which means that the entire economy has to be rebuilt properly.
Talking about rebuilding, the dearth of manpower, technical, and scientific management skill is another problem area. Universities of Technology, Colleges of Technology have to be properly staffed and equipped to bring out the type of people who can addressed the issues as I have just outlined. Farming is no more hoe and cutlass issue. It requires a lot of machinery and know-how.
We are more than in a recession because over the years, we didn’t plough back our resources deeply enough. We expended them on finished goods from other countries. We are still talking about assembly plants. The assembling we are doing today is worse than what had in the past.
At Peugeot plant, we were aiming at meeting 70 per cent of the content and the 30 percent imported, but today the reverse is the case, and this present 30 per cent includes labour.
Government is assuring Nigerians that in the third or last quarter of the year, Nigeria will come out of recession…
That is rubbish. It is nonsense for anybody to tell you that we are coming out of recession in the third or the last quarter of the year . They should stop giving us projections. They should tell us the concrete policies, resources they are mobilizing, the training they are doing, the restitution of the productive sector that is taking place. That is what the answer should be, not touching your lips and putting it into the air and telling us in three months or that you will come out of recession.
That is rubbish. If they are making those projections based on what I said, it is a different thing.
This is not an ephemeral recession of just improving liquidity and getting things going. We were in recession before the end of the last administration. The new administration is almost two years.
To define recession as two negative consecutive growth rates is what applies in advanced countries like Germany, US etc.
In our own economy, you have to go beyond that to underscore why you are having these negative consecutive growth rates. It goes beyond liquidity or foreign exchange shortage. It goes to address the real critical productive sectors of agriculture, non-agriculture, and mining, and even the tertiary services sector.
Look at what is happening in the aviation for instance. All of a sudden, Arik has to be taken over; at first we thought they were operating poorly because the clientele has fallen, as people don’t have the lush funds to fly up and down.
Where are the railways that should have been there to take up this slack; where are the roads; where is the security for more road travellers? As you go down the list, you find that these are not in place. They are critical issues.
They should stop giving us projections based on whims and caprices to make people feel happy. We all will be here, and the second, third and fourth quarter will come and another year will come. We better begin to address the real issues that have brought down the large sludge in unemployment. First, we always had large underemployment. By the time you put unemployment to underemployment, the rate of employment by comparison with industrialised countries must be a very small fraction.
It is best to define our problems in concrete terms, that is the way we can come out with concrete policies to solve our problems.
Acting President Osinbajo recently set up a taskforce to bring down the prices of foodstuff to ameliorate the suffering of the citizens. What is your view on this?
You will assume that these are all highly educated people in various fields, and you must also assume that after so many plans, so many budgets, so many high sounding development programmes, and we know that what determines a price is a function of what happens to the supply of the goods and the demands that register in the market.
The only way you can effect any change in the price is by going back to address those issues. Those issues are not what you set up committees to do. This is the whole point of planning, project development, policy-making and investment planning and plan implementation.
It is not something for which you would set up a committee to go to the market and find out why prices are high and bring them down.
There is no way you can bring down prices unless you address the short, medium and long-term factors that affect supply and demand.
No task force and no battalion that can force down the price, you would only end up creating more distortions in the price.
I will be surprised if this works. It may just be to give a sense of activities in motion.
The economy is in shambles, is this a function or the lack of expertise of the economic management team?
It is a function of everybody. I know it took a long time for people to accept that there was an economic management team. Most people thought there wasn’t any. It took a while for people to realize that there might have been an Economic Adviser when the cabinet was set up. It took a while for people to realise that there were other people who were recruited to join the cabinet to form the Economic management team.
Team or not, as they say, ‘the taste of the pudding is in the eating’. The results you expect from the Economic Management Team will be reflected in the qualities of the policies being implemented and how those policies are geared towards solving the problems identified.
For professional economists, you would assume may be, there is economic management team so far, in terms of resource mobilization, in terms of foreign exchange management, in terms of price management, in terms of growth of the real sector, in terms of improvement in infrastructures and other indicators, even though some of these require time to jell, at least you should be able to see the tendencies in the amplification of the capacity being created and the quality and well being in the lives of people as reflected.
I won’t take any comfort from the projection of coming out of recession in the third or last quarter.
Independently of that, as I said our problems are more structural than passing, and they are more deep rooted. So, any attempt to keep or make the people happy will be counter productive, and create so much cynicism that if at the end of the projected third quarter or last quarter, conditions are worse than even the first quarter; even when the government had come up with policies that may have some impacts that would need the cooperation of the populace, people would have been so disdainful to feel that they have any role to play to assist the government to achieve results.
Recently, former President OlusegunObasanjo advocated that the Igbo to produce the president in 2019. This has elicited mixed reactions. Some bought into the idea, while some were of the opinion that it’s restructuring that would benefit the Igbo. What is your position on these?
It was Chief Obasanjo’s right and privilege as a Nigerian and former president, as a politician to say what he likes.
Why should anybody spend time getting all worked up because Obasanjo said it?
Why should Ndigbo or any other section of the country need any individual from wherever to come and say such a thing? They should know that leadership should go round.
We should get a president by and large, whether from large or small group, somebody who can address these issues we are discussing; somebody who can do the job.
There is nothing that says we can’t get somebody from the Southeast to do the job. You don’t just pick somebody from the street and say that he is the president of Igbo extraction. The president is the president of Nigeria, who happens to come from one area. He happens to be the person at that material point in time, who can get the job done.
I have said it before to our people; we have to change through these problems and change through our reactions. It is parties that put up presidents and not ethnic groups.
For you to get one of your own to be president, that constituency must be involved in the political process. This connotes that people from the South-East should get off this penchant of not wanting to play in the big party, yet expecting to get the presidency. Common sense dictates that you must be involved in the major party. That is real politics.
We don’t need an Obasanjo to tell us, it is evident. The west has had it, the north and the South-South. Why shouldn’t the South-East have it? Also, it doesn’t mean that you run to Enugu and grab somebody and say we have got our own president.
The political class in the constituency has to work with their counterparts in other places; this requires political synergy, and networking. That is what we should be discussing, not whether it is a good idea or not.
It is about time that people from this area are given the chance to produce the president, even looking at it from a tripod arrangement.
It cannot be allocated; it has to be truly synergy and networking. I have always encouraged our people to get actively involved with the big parties.
Is it against the reason of getting actively involved in the big party that has led to the influx of many prominent Igbo politicians into APC?
It doesn’t matter for whatever reason they are doing that. I don’t think that is the reason. Why are they not going into the PDP? It is the Nigerian factor. They think that party is on the upswing, while the other one is on the downswing.
I certainly encouraged them even before the alliances were formed that we should have the simple political sense to make sure that we do the right political calculations, that if we do the wrong calculations we have nobody else, but ourselves to blame.
After we have done the wrong calculations, we are still going around beating our chests that we did the right thing. That is not very smart; that is not very truthful to us.
If you have any problem with Igbo politicians flocking into APC or other party I don’t. think that is what they should do. I could also be that they are responding, as some of us have actually been encouraging that, because we need to exploit the talent all over the country, we can’t allow it to be seen as if it is only one side or two sides that can supply the requisite quality of leadership that solves Nigeria’s mega problems.
So, we should be encouraging them to get involved, it is not only those who want to go for office, but the grassroots and the constituencies.
If you get involved and elect people at the state level or at the national level, you are able to hold them to explain their performance.
So far, we have had a very dismal record of calling people to account. You don’t call them to account when you are walking to your farm or to your shop. You hold them to account when you attend the local meetings, and your presence alone would demand hearing.
I have been encouraging our people to get involved not just at the election time, but long before the election to make sure that they prune the right people to represent them.
What is your fear for the nation, where ethnic organisations are pulling away from the centre towards their sides; more so, where you have self determination groups, which are making Nigeria not to emerge as a nation state, 56 years after independence?
Unless we call ourselves to order, we cannot blame providence or the colonial power.
We have tried to adduce all kinds of selfish motives in the way the structures were put in place. There were young men from various universities or high schools in Europe, who came here to manage the empire for their monarchs.
You would think that 56 years after that, we will not be blaming them for what they gave to us. Yet we are complaining that the quality of education they handed over to us have dropped; the quality of this has dropped, the quality of that has dropped.
At the minimum, we should have continued to improve on what was left for us. That already undermines this argument.
Depending on where you are and what you can see or touch, in some cases, there is no doubt that there is more disunity now than there was before, particularly in terms of economic hardship, in terms of decline in jobs, in terms of more strife and employment opportunities and distribution of positions.
At other times, you get the impression that things have not collapsed badly, and in some instances you find that there is still that camaraderie among the various groups. Even as we complain, there are more marriages among ethnic groups, and people speaking different languages in addition to theirs.
By and large, your question is addressing a very real problem, and unless we are able to provide better leadership that problem will remain there. So, leadership has always constituted the major problem in Nigeria.
Many countries are heterogeneous contraction of many ethnic nationalities, but if we can get a leadership… look at Rwanda, in spite of what they passed through, with the right leadership who have managed to get the various groups together, they are forging ahead.
If you can get a leader who can demonstrate and mobilize the best so that you can create opportunities maximally, then you we are getting our problem solved. When you are creating opportunities you are also reducing the potential for centrifugal infighting and people pulling from different directions.
First is leadership, second is creation of commensurate growth in opportunities so that the cake-sharing mentality can be in a way that it contributes to more growth.
My fear is that unless we get the leadership that can demonstrate obvious fairness to all, we are not going anywhere. This is not easy because everybody seems to be in a hurry.
You talked about creating fairness and opportunities, a situation where different criteria are used for different people into offices or admissions, won’t these put pressures on the centre?
We are different peoples. We received westernization at different levels. The speed with which we receive it is not a blessing or a curse.
However, we have the resources and with the right leadership, if well spent we will progressively be bringing everybody up to the same standard, but we misused it by trying to slowdown and append a ridiculous cut off marks for different sections. Those are not the right policies.
In an interview with Sunday Sun recently, Prof AngoAbdullahi, said the North was ready to break away from Nigeria, are the Igbo ready?
In 1966, the North was ready to breakaway. They were persuaded that it was not the right thing to do, rather a distinct opportunity… how can you do that when you have a whole territory that you can play with, and you wanted to run away from it?
The West had its own anthem; I have heard it sang here and there. I grew up in this part and I knew they would not take it so lightly and it depends on so many factors.
For the East, for 80 years, we have been shedding our blood, our sweat, we have been striving and we have been building all over this country.
When it came to strife that was imposed, of course there was no other option but to resist it.
My position is that what we have is a dearth of political, a dearth of rule of law, and a dearth of the mobilization of the right leadership. This is where our people should be focusing on until we sufficiently explore how we can change the situation for the advantage of everybody.
It will be superficial to say that we just want to breakaway. When it came for us to go, we didn’t need to discuss it. There was a representative government and it took the decision and forced the hand of the person who was at the top, and the evidence was there for everybody to see. Never mind that the other people didn’t like the idea. Many didn’t see the gravity of the crime that was committed; the enormity of the carnage, the pogrom, the killings. We have to see this thing from its proper context.
Look around the world, this is the way other countries passed through the hot crucible and they became modern nations. We should give it that shot and resist the temptation to break it up. When the time came to do so, we didn’t take to debating it. The situation now is very different from what happened in 1966. The circumstances are not the same. I feel we should get challenged and get in to the question of the politics, leadership, the rule of law, accountability, equal distribution of assets. Those are the things we should be focusing on, not fragmentation.
The clamour for the restructuring of the country is deafening, what is your position on this?
We have to be discussing the substances of the restructuring, we have to decide at what target.
It should be restricting to move to a modern society, a modern nation.
I was going to raise this issue of restructuring at the National Conference but I didn’t go. We are shouting so much about restructuring. What type of restructuring is going makes sense?
Let’s go back to the viability of the basic units, which is the local government. It may not be the same number we have today. Lets give a range, about 650,000 to 700,000 people for each local government and if you divide this by our population you get the number of local governments, it may be far less than 774, it may be between 300 and 400. Then you give guidelines as to those who would be manning those local governments. They must attain a certain level of education. So, we can use very well trained people to be at the helm. Let us use 350 local governments from the swamps of the Niger Delta to the semi arid in the North. It is not a matter of area; it is number of people who can form the tax base, economic base, and productive base. After you got this, you can now decide how many states by readjusting what we have now, we can even come down to 25 or 30 that would be viable, instead of the 36. Remember, we are not restructuring for next year or two years time, we are restructuring in a way that 50 years from now, you have a modern nation, where the productive base is at the local government. Those that live there whether indigenes or non-indigenes are citizens of the country; they are bonafide full citizens of those local governments; they can vote and be voted as chairmen, mayor etc., and that local government would be almost self sufficient.
From the 30 states, we can decide the number of zones we want, we can retain the existing ones or create more. You can see that the level of relevance diminishes as you move towards the centre in terms of the basic power, but not external relations or defence. We can start from local government police, and move to another level.
You want to restructure and may be move to another level of a strong and a modern nation, as we see in America or in other countries.
This is the time for us to do it. It is myopic and unfair to say restructuring means, to take the six zones and say everybody go and create the number of local governments that you want, you are only postponing the problems. There would be protestations here and there, but this is a great idea for those who are talking about restructuring for development.
By the time you restructure, the local governments all those who reside in them would feel good contributing to the development of the nation. When it comes to cultural affairs, ethnics would still do their cultural things.
By this arrangement, wherever you come from you begin to feel a certain identity of the local government. Those local governments would now develop their revenue base, small, medium, large-scale industries in concert with other investors. The grouping of those local governments would give you your states, and those states would give you your provinces, zones, or regions.