Fis­cal au­thor­i­ties look at num­bers


IT IS UN­FOR­TU­NATE THAT I had to say the things I said about the Nige­rian econ­omy in 1986. The Nige­rian econ­omy is like a fan­tas­tic build­ing. You know, when you want to build your house, you bring in your sand, ce­ment and other com­po­nents, but you can­not dig a hole in the sand and call it a home. What you need is a proper ar­chi­tect

CHARELS IYORE, stud­ied chem­i­cal en­gi­neer­ing at the Uni­ver­sity of Ife, Nige­ria (now Obafemi Awolowo Uni­ver­sity), but he is bet­ter known in the world of in­vest­ment bank­ing re­search and anal­y­sis where he pro­vides pen­e­trat­ing in­sights on de­vel­op­ments in the lo­cal and global econ­omy. He is chair­man of Deon & As­so­ci­ates, the high level in­ter­na­tional con­sul­tant with over 25 years cog­nate ex­pe­ri­ence; and he is the prin­ci­pal part­ner of the United King­dom based re­search and data ser­vices com­pany, Dion & As­so­ci­ates Ltd., as well as a di­rec­tor of GTI As­set Man­age­ment and Trust Lim­ited. His depth of knowl­edge makes him the de­light of fi­nan­cial jour­nal­ists who are driven by the work­ings of the mar­kets. He walked into the of­fices of busi­ness a.m. to say ‘hi’, and a team of edi­tors and young re­porters could not miss the op­por­tu­nity to en­gage his mind on the Nige­rian econ­omy, its man­age­ment and where he thinks it is headed. Fol­low­ing are ex­cerpts from the en­counter: What is your take on the state of the econ­omy as we have it now, es­pe­cially pro­ject­ing into 2019, which hap­pens to be an elec­tion year, how would you as­sess the Nige­rian econ­omy?

IT IS UN­FOR­TU­NATE THAT I had to say the things I said about the Nige­rian econ­omy in 1986. The Nige­rian econ­omy is like a fan­tas­tic build­ing. You know, when you want to build your house, you bring in your sand, ce­ment and other com­po­nents, but you can­not dig a hole in the sand and call it a home. What you need is a proper ar­chi­tect that will put all those com­po­nents to­gether and make them “fit for pur­pose”, as the Eng­lish would say. So my fright with the Nige­rian econ­omy is that most in­sti­tu­tions are not fit for pur­pose and often tend to op­er­ate as si­los. That’s the first one. The sec­ond one is the idea that pub­lic ser­vice or civil ser­vice can hus­band our re­sources that well to make an im­pact on the com­mon good as in­tended; but the sit­u­a­tion whereby the rea­son for gov­er­nance it­self be­comes the sup­port of those who are sup­posed to serve rather than the other way round, and we still haven’t been able to cur­tail our run­ning cost as against what we have to spend for cap­i­tal ex­pen­di­ture.

Tak­ing cap­i­tal and re­cur­rent ex­pen­di­tures, it is as if the ra­tio has be­come a mon­ster and now we are talk­ing about deficit bud­get­ing as if it is the new nor­mal and in a coun­try where ide­ol­ogy doesn’t come into play, the is­sues don’t get tack­led. How do you deal with this is­sue of a high re­cur­rent ex­pen­di­ture?

Deficit bud­get­ing it­self is not nec­es­sar­ily bad, it just ex­pects the econ­omy to grow over that pe­riod and wipe out the deficit, but when the deficit be­comes the rea­son for driv­ing the gov­ern­ment it­self then you are in se­ri­ous trou­ble. What you will see is re­duc­ing pro­duc­tiv­ity, where an aw­ful lot of peo­ple who go to work do noth­ing other than just show up to be paid. Yes, it helps you do what is called ‘distri­bu­tion’, be­cause there is no money in the econ­omy to buy goods and ser­vices, so if you are giv­ing out money like that it is okay. In Eng­land, we have what is called the dole, but that should not be the main­stay of the gov­ern­ment. I think one of the key prob­lems we have here is we run the econ­omy based only on dis­tribut­ing wealth. Now, if some­body has come to try to stop that, he needs to re­place it with proper pro­duc­tion ar­chi­tec­ture. I guess what they are try­ing to do is to bet­ter the ease of do­ing busi­ness with the rest of the world. For me, I think that the se­quenc­ing is very flawed be­cause more than 70-80 per­cent of the food pro­duced in this coun­try goes to waste. In fact, if you go to fruits and veg­eta­bles, that num­ber will go even higher, in a coun­try where more than 60 per­cent of its pop­u­la­tion can’t get a full day’s meal, so there is a dif­fi­culty there.

We are in a sit­u­a­tion where we still don’t know how to evolve from colo­nial rule to rul­ing our­selves. Rather than think­ing of the coun­try as a whole, we be­gan to cre­ate turfs, re­gional strength and ter­ri­to­rial ar­eas, mak­ing as­sump­tions on se­cu­rity, when we don’t have co­he­sion.

So, you asked me what can be done. Well, like I said, it is es­sen­tial for us to know that we are get­ting it wrong. If we refuse to ac­cept that we are get­ting it wrong and hide un­der pri­mor­dial is­sues like tribe and re­li­gion, so it is the fail­ure of the ca­pac­ity of us, the ed­u­cated, to pro­vide di­rec­tion and in­tel­lec­tual pur­pose, which we are fail­ing to do. Most of the pub­lic de­bates I see in the pa­per, tele­vi­sion and the likes, the is­sues we talk about are very unim­por­tant. In our towns we have no hubs, there are no city cen­tres, where there is a hub of ac­tiv­i­ties, but we are just liv­ing on streams and it is a jun­gle, the road net­work doesn’t even help evac­u­ate the peo­ple, the hous­ing is way be­yond the reach of peo­ple, and it makes it look as if the sac­ri­fices you made to go to school is not a good one. We need to bring pro­duc­tiv­ity back. I am not say­ing we shouldn’t de­cen­tralise power, be­cause if you ask me, there are 774 lo­cal gov­ern­ments in Nige­ria and these lo­cal gov­ern­ments have lo­cal gov­ern­ment chair­men from those places, but I don’t think there are more than four or five lo­cal gov­ern­ment chair­men who aren’t steal­ing these lo­cal gov­ern­ments to debts; and there are also 36 gover­nors of the 36 states. How many states in this coun­try can we say that the wel­fare of the peo­ple is more im­por­tant than that of the gov­er­nor? So, for me re­ally, de­vo­lu­tion or what­ever it is called is im­por­tant, but we must, first of all, find a way to in­crease pro­duc­tiv­ity.

How can this be done be­cause, some­times, you get the sense that those who are in gov­ern­ment don’t just un­der­stand it, and we have more peo­ple out­side gov­ern­ment who seem to un­der­stand it; how do you drive pro­duc­tiv­ity in an econ­omy like this?

Ap­pro­pri­ate ed­u­ca­tion! In those days, if you pass the com­mon en­trance, you were sure of go­ing to col­lege and you were go­ing there via com­pe­ti­tion, but now that we have told the teach­ers that, they do not mat­ter, you can’t build a moral com­pass where most peo­ple who go to teach are do­ing it not be­cause they have the pas­sion for it but be­cause they don’t have a choice.

We need to trans­form the ed­u­ca­tion of the peo­ple and make it such that, those who steal would be ashamed that they have stolen. It is good to have a leader who has fi­bre and struc­ture like we have in Rwanda, where rather than al­low­ing

things to go any­how, some­one has said “this is my coun­try and I have to make a dif­fer­ence”. It is not wish­ful think­ing, if you don’t have the skills to achieve that, if you don’t have the in­tel­lect to put these things in proper se­quence, it is just go­ing to be garbage in, garbage out.

Let us re­turn to cap­i­tal ex­pen­di­ture. We know that from the fis­cal side, you need to drive growth by spend­ing a lot, es­pe­cially when the econ­omy is in poor shape, but we have had a sit­u­a­tion where cap­i­tal ex­pen­di­ture doesn’t seem to mat­ter, some­times it is not enough, some­times it is not re­leased on time. How can we change that mar­gin?

I will ask you a ques­tion and I want you to an­swer as best as you can. If you earn N1 mil­lion every month as salary and you give your wife N250,000 to buy food and feed the house, if by what­ever cir­cum­stance, ei­ther the cur­rency has fallen or what­ever and you be­gin to earn N100,000 every month, will you con­tinue to give your wife N250, 000 for food? If you have to do that, you will have to bor­row to make it pos­si­ble, that’s what we call “kitchen eco­nom­ics”; you draw your ra­tios and based on your in­come, you di­vide based on per­cent­ages. Now, those who ben­e­fit from the gov­ern­ment, I am talk­ing about civil ser­vants, who think they are now the rea­son for gov­er­nance rather than be­ing there to serve, would find a way to ex­pand their de­mands.

Very often, when they de­sign projects they are white ele­phant projects, which are not sus­tain­able, all they are look­ing at is how big it is so that they can take a per­cent­age of it. I spoke to a friend who is now in cen­tral gov­ern­ment as ad­viser; I re­mem­ber when he was ad­viser to La­gos State gov­ern­ment, there was a meet­ing where they said they had in­creased cap­i­tal ex­pen­di­ture marginally by two per­cent; I had to leave the set­ting be­cause it was ob­vi­ous they didn’t un­der­stand the is­sue, they are sup­posed to look at “okay, this is what is avail­able to us, what per­cent­age should we give to so, so and so…” You can’t do them in sim­ple ab­so­lute fig­ures, when you have a sit­u­a­tion whereby min­istry and agen­cies feel that be­cause we spent this much last year, we have to spend more this year, it is not done, be­cause it is not driven by need, it is not driven by pur­pose, it is driven by try­ing to cap­ture as much as pos­si­ble of the na­tional pie. Some­one needs to say that we can’t go on this way; some­one needs to say that the only thing that mat­ters is the peo­ple who live in the city cen­tres. For me, I don’t know if I am the right per­son to say that. Peo­ple call it po­lit­i­cal will, but I think it is just ba­sic in­com­pe­tence. I mean, if you can do it well in your house, why can’t you do it for the states? Not every doc­tor in Nige­ria has a fa­ther who was a doc­tor, there are many peo­ple who their fa­thers were driv­ers and mes­sen­gers, but they made the nec­es­sary sac­ri­fice to take their chil­dren to the next level, if you can do that in your house, why do you refuse to do it in the states, that means you are not hus­band­ing your re­sources. It is a ques­tion of say­ing that there is a con­spir­acy of us, the well ed­u­cated few, against the un­in­formed, to keep as much of the cake as pos­si­ble.

I will tell you the same thing, Eng­land un­til re­cently had the same prob­lem un­til Mar­garet Thatcher came in. By all in­tents and pur­poses, all gov­ern­ments that run in Eng­land now are work­ing right be­cause they now have a mar­ket sys­tem that works for them. It looked bad at the time she wanted to do it but she felt that as a mother, this was what she needed to do. She pri­va­tised non-per­form­ing as­sets, she cre­ated new ar­range­ments for PPPs to work, and the rest, like they say, is his­tory. She trans­formed the econ­omy be­yond any­body’s wildest be­lief; she made sure that work now paid. So, if you are Labour or what­ever po­lit­i­cal view you have in Eng­land, you are look­ing at Mar­garet Thatcher and the fact that when you spend money it reaps re­sults, maybe if you give our ladies an op­por­tu­nity here, it might change, I don’t know.

There is this is­sue about who should drive the econ­omy. In the past few years, the econ­omy has been shrink­ing and it would seem the mon­e­tary au­thor­i­ties have been the main driv­ers while the fis­cal man­agers have ab­di­cated. I re­mem­ber that dur­ing the 2015 elec­tion cam­paign, the vice pres­i­dent came to La­gos and told us, “We are go­ing to spend our way out of re­ces­sion.” So, what’s your take on the per­for­mance of the fis­cal man­agers of the econ­omy?

First of all, let me say that what we have now is a cri­sis; we are talk­ing about in­ter­ven­tion com­ing from the Cen­tral Bank to fix the whole econ­omy and there can­not be any­thing worse than that be­cause, you are un­der­min­ing ev­ery­thing. The Cen­tral Bank is sup­posed to be a lender of last re­sort; if you are not good enough to get your li­cense, don’t give them the li­cense. A sit­u­a­tion where all lend­ing is through the Cen­tral Bank and de­vel­op­ment agen­cies just chan­nel them through the Cen­tral Bank is a recipe for cri­sis and it is not sus­tain­able. There might be some lit­tle gain in it now, but that re­ally is not go­ing to achieve any long-term sus­tain­able growth.

Now, what I see wrong with the fis­cal side is that they are still look­ing at num­bers, there is still no pur­pose and di­rec­tion. Most economies no longer run based on geo­graph­i­cal de­scrip­tions. There are 50 states in Amer­ica but there a num­ber of towns that trans­formed Amer­ica for a pur­pose. You go to Cal­i­for­nia and Los An­ge­les, you are look­ing at where fruits are num­ber one, fol­lowed by com­put­ing, be­fore you now have movies and big screens; then you come down to New Or­leans and Dal­las, that’s oil, they fo­cus on oil and all of that; come to a place like Florida, they do small screens for tele­vi­sion, sit­coms, all of the movies you see, come gen­er­ally from there; you go to New York, fi­nan­cial cen­tre; you go to De­troit and Illi­nois, they have a fo­cus on auto in­dus­try and avi­a­tion in­dus­try.

One of the rea­sons why we can’t get power right is, you can­not be giv­ing peo­ple power to watch Nol­ly­wood and “Black Magic” when you don’t have in­dus­trial cen­tre nodes. So you can de­cide, for ex­am­ple, that you want 10 in­dus­trial cen­tre nodes, five in the north and five in the south, then all the other states will grav­i­tate to pro­vide, in­tel­lec­tual ser­vices and that de­mand alone will jus­tify the power you pro­duce for these places, and that is how the econ­omy will lift it­self.

We are talk­ing about in­ter­ven­tions com­ing from the Cen­tral Bank to fix the whole econ­omy and there can­not be any­thing worse than that be­cause, you are un­der­min­ing ev­ery­thing

But when you say there are 36 states and you want to dis­trib­ute the money equally, whether you are get­ting the money or not, it doesn’t re­ally mat­ter, you can’t achieve any­thing. Look at Eng­land, as big as Eng­land is, it is clear, Lon­don of­fers fi­nan­cial ser­vices to some min­istries, Liver­pool is all about the ship­ping in­dus­try and the rest of them. If you go to Glas­gow, you will learn all new ideas of in­sur­ance and the rest of them, Manch­ester and Birm­ing­ham, heavy in­dus­tries and Coven­try. So you need to have nodes, the only nodes we have is sup­port distri­bu­tion, just shar­ing, La­gos and Abuja; and since Abuja was cre­ated, all of the north is wiped out, Kano is now a ghost of it­self , Kaduna is gone, no new towns have come up. So that is the case. You need to move to de­ter­mine where are the nodes, so even when you are bring­ing in in­vestors from out­side, there is some­thing called “ab­sorp­tive ca­pac­ity”- where will the money go, will the money just come and hang around for some­one to steal it? Un­til we have a clear in­dus­trial pol­icy that is driven for pur­pose, so that places are known for some­thing.

In those days, Kano was known for pyra­mids of ground­nut, Ibadan and all of them were known for co­coa, the Mid­west was known for rub­ber and palm ker­nel; we need to be known for some­thing, and all we are wait­ing is just the share of the money. You can’t do that if there is noth­ing the chil­dren can un­der­stand. The fish­ing in­dus­try; where is the fish­ing in­dus­try in La­gos for in­stance? Where are the trawlers? We still use all those small boats; that is a big in­dus­try on its own, the prawns from Nige­ria are the best, but no­body knows. There is a small place in Malta where they make their own boats, we need to cre­ate clear in­dus­trial nodes, based on de­mands, and all these ques­tions on de­vel­op­ment will be an­swered. If you like have up to a mil­lion states, all wait­ing to share money, you will never get it right, even the power won’t be got­ten, be­cause when you cre­ate big nodes, those power sta­tions will buy power at the price you want to do, but when the price gets too much, they gen­er­ate power by them­selves and when they gen­er­ate their power, they sell it to you; put it to you when it is over and buy from you at pro­ducer price. So the ba­sis for pro­duc­ing power at all, is cre­ate nodes who can bring those checks and bal­ances for com­pe­ti­tion. They don’t ex­ist here and we are just wait­ing to watch “Black Magic” on tele­vi­sion, but it doesn’t work that way.

You men­tioned pro­duc­tiv­ity as a way of grow­ing the econ­omy, how can our civil ser­vice play the role of shap­ing poli­cies that will aid the de­vel­op­ment of the coun­try? In other coun­tries the civil ser­vice is made up of peo­ple who have the in­tel­lect and ideas to trans­form things but I don’t think we can say the same for the civil ser­vice in Nige­ria be­cause the re­cruit­ment process is flawed?

Civil ser­vices are not sup­posed to cre­ate poli­cies but help the ex­e­cu­tion and achieve­ment of gov­ern­ment poli­cies, but like I will tell you, when I was in the uni­ver­sity, when you grad­u­ate, they came to in­ter­view you in the school and most of the bright­est and the best went to the for­eign ser­vice and civil ser­vice, so it wasn’t nor­mal those days to want to work in First Bank or what have you. Usu­ally, it is those who don’t do well in school cer­tifi­cate that you start as a clerk and work their way up the bank­ing sys­tem. That was how it was in our time, so the civil ser­vice had the ca­pac­ity to at­tract the best. The civil ser­vice is also sup­posed to be able to stand up for it­self and also su­per­vise the ex­cesses of politi­cians be­cause politi­cians have ideas, but they have the ten­den­cies to want to pro­tect pri­vate in­ter­est more than de­fend­ing the pub­lic good. Now, after 50 years of ne­glect­ing pub­lic good you can see what is hap­pen­ing. In my time, they in­ter­viewed you and not many peo­ple would have left to say they want to work for First Bank; you would rather go to the for­eign or civil ser­vice or the new ar­eas that were com­ing up, or if you had a first class, they would tell you to go do your masters on the uni­ver­sity schol­ar­ship and come back as a lec­turer. That’s why I keep say­ing that the ed­u­ca­tional sys­tem is weak, a sit­u­a­tion where you go to school and you don’t have self-worth. Those days, you will not go out and be eat­ing ‘boli and epa’ [roast plan­tain and ground­nut] on the street; right now, the teach­ers are think­ing dif­fer­ently and they are the ones eat­ing the ‘boli and epa’ them­selves. I don’t know, but I think to a large ex­tent, if you have a po­lit­i­cal class that knows what it is do­ing, as Mar­garet Thatcher did, cre­ate in­dus­trial nodes, al­low com­pe­ti­tion; La­gos state, for ex­am­ple, can have four or five dif­fer­ent distri­bu­tion com­pa­nies to com­pete, be­cause ba­si­cally, distri­bu­tion is to the me­ter, so each of them can pro­vide a dif­fer­ent tar­iff and then you choose the one you want, although, that’s just for do­mes­tic con­sump­tion. But the crit­i­cal thing is to look at most in­dus­trial estates, they are all gone – Ikeja in­dus­trial es­tate, gone! Ilu­peju in­dus­trial es­tate, gone! Apapa in­dus­trial es­tate, gone! Isolo tex­tile fac­tory, gone! The same thing hap­pened in Kaduna, where we had 16 dif­fer­ent tex­tile fac­to­ries. I keep telling peo­ple, this thing is not tech­nol­ogy, it is not hi-tech, it has to do with the three things that God has given us, which no­body can com­plain and you can find any­where in the world – rain, sun, and land, and these three things are given to every­body equally.

Sim­ple sce­nario; put five pieces of corn on the ground any­where, three will prob­a­bly die and one will sur­vive and bring 5000 more and there is no tech­nol­ogy on earth that has that kind of re­turn on in­vest­ment, so God has given these things to every­body on earth. Se­condly, the real tech­nol­ogy is not just com­put­ing, it is the abil­ity to say from wool or cot­ton, you can pull out a thread, and that thread can go into your loom and the loom can pro­vide you with a cloth, so, even though there are com­plex lev­els of logic, every hu­man so­ci­ety is equally blessed, it is a mat­ter of how you put them to­gether to form a whole.

The ap­pro­pri­a­tion bill, re­cently pre­sented by the pres­i­dent, has a quar­ter of it as­signed to debt ser­vic­ing, whereas some crit­i­cal sec­tors like ed­u­ca­tion and health are un­der­pro­vided for. I re­mem­ber when Bill Gates came to Nige­ria, he spoke about the gov­ern­ment pay­ing more at­ten­tion to in­fras­truc­tural de­vel­op­ment at the detri­ment of hu­man de­vel­op­ment in Nige­ria, for mean­ing­ful de­vel­op­ment, is it right to play up one and play down the other?

Ba­si­cally, you talk about the debt ser­vic­ing struc­ture, the per­cent­age. For me, that debt ser­vic­ing is go­ing to take care of ex­ter­nal debt, but that is not the is­sue, the is­sue is 24 states out of the 36 states can­not pay salar­ies as at when due. What that means is that since civil ser­vants aren’t get­ting salar­ies be­cause civil ser­vants con­sists ma­jorly of mid­dle-class, it means they no longer buy goods and ser­vices, and if they no longer buy goods and ser­vices, pro­duc­ers of those goods and ser­vices tend to shut down; if the pro­duc­ers of goods and ser­vices shut down, un­em­ploy­ment rises, if un­em­ploy­ment rises, your tax base shrinks. For me, what the gov­ern­ment should have done so many years ago is to look at how these gov­ern­ments bor­row; did the DMO of­fer ap­pro­pri­ate ad­vice? Clean the slate, and make it a must to be able to pay salar­ies, be­cause when you don’t pay salar­ies, you are driv­ing the econ­omy to a halt. So, I would have thought that a large per­cent­age of the so-called debt ser­vice, should not just be ser­vic­ing the ex­ter­nal debt po­si­tion be­cause that in it­self does not pro­duce, whereas pay­ing salar­ies has a mul­ti­plier ef­fect.

I don’t know how many peo­ple can af­ford to buy a news­pa­per these days. As a stu­dent I bought pa­pers every day. But if you don’t buy news­pa­pers, how will the pro­duc­ers of news­pa­pers sur­vive? If they don’t sur­vive, who will set the agenda for gov­ern­ment? How are you go­ing to show that the opin­ion of the peo­ple has a role to play? So for me, I like the debt struc­ture but I would have felt that in­abil­ity to pay salar­ies must be the first to be tack­led, and then you can start talk­ing about the flaws in the gov­ern­ment.

Let me tell you, the distri­bu­tion of wealth is a ma­jor func­tion of gov­ern­ment, and I also think many of them are con­fused be­tween be­ing a so­cial­ist and cap­i­tal­ist. But my view of what so­cial­ists are say­ing is a be­lief in fair­ness and eq­uity. So if you have a coin, and there are four peo­ple, you must cut the coin into four parts and every­body gets a quar­ter of a coin, but once the coin is cut, is it still a le­gal ten­der? Whereas, the cap­i­tal­ist says, “this is the per­son that looks most skilled, we give you all the money and when the wealth is cre­ated, every other per­son gets some­thing.” You see, it is the same dogma that we ap­ply to re­li­gion that we also ap­ply to po­lit­i­cal ide­ol­ogy and in the end, we are nei­ther here nor there, so this is the is­sue. If you give some­one a con­tract and you say at the end of the month I will pay you, but if the gov­ern­ment as the big­gest em­ployer doesn’t pay, the econ­omy is gone. The only rea­son why the econ­omy is still sur­viv­ing, though on the brink, is “when your take-home pay, doesn’t get you home, you don’t get stuck on the street; so half of the guys who are work­ing are hop­ing to get home based on tips and ‘egunje’ [bribes], and we are all in de­nial of it. How many pro­fes­sors can af­ford to buy a car in five years, ex­cept he can maybe buy a ‘tokunbo’ [sec­ond hand] in one year, that wasn’t the case when I was a young man, we need to be able to deal with those link­ages.

Let me use this op­por­tu­nity to urge the me­dia, both print and elec­tronic me­dia, we need to set agen­das, what we have just done is re-echo the bank­rupt views of those in po­lit­i­cal of­fice. busi­ness a.m. has done well. I saw you re­spond to the FBNQuest, who said the DMO has no fis­cal re­spon­si­bil­i­ties in the gov­ern­ment. So for me, the chal­lenge is yours and mine, how do we take the leg­isla­tive of­fi­cers to task? How do we take the ex­ec­u­tive of­fi­cers to task? Be­cause no one is chal­leng­ing them, the level of our logic is weak, we have be­come bereft of our con­struc­tional thoughts, we can’t think con­struc­tively any­more, ev­ery­one seems to be dec­i­mated, it has be­come a mat­ter of ‘will I sur­vive till to­mor­row?’ That, for me, is the is­sue.

In those days, Kano was known for pyra­mids of ground­nut, Ibadan and all of them were known for co­coa, the Mid­west was known for rub­ber and palm ker­nel; we need to be known for some­thing, and all we are wait­ing is just the share of the money

The eco­nomic out­look for 2019 is very gloomy, judg­ing by the re­port of an­a­lysts, is­sues like volatile oil prices, rev­enue sources de­clin­ing, even the pres­i­dent him­self has voiced con­cerns on the state of the econ­omy and many are say­ing that it would get to a time that we won’t be able to bor­row, but lis­ten­ing to Peter Obi, dur­ing the town hall meet­ing, he spoke about achiev­ing ef­fi­ciency at the ports and how it can bring some more money on the ta­ble for

em­pow­er­ment in­stead of the N10,000 from Tra­der­Moni. How can we get out of this cy­cle of de­pres­sion and re­ces­sion?

I have told you be­fore that Nige­ria is an on­go­ing project, it is like a build­ing site, with all the nec­es­sary re­sources on ground but there is no ar­chi­tec­ture and you have now dug a hole in the sand and you are call­ing it home. Un­for­tu­nately, some of these dis­cus­sions are not meant for the me­dia, they are sup­posed to be amongst a se­lected few, dis­creetly and qui­etly, set out an agenda. Okay, let me give you an ex­am­ple, we are a very re­li­gious so­ci­ety. I re­mem­ber when I was in Ede, Ondo State, you’d see old peo­ple the age of 60, 70 years do­nat­ing to churches and mosques but haven’t eaten in two days; now I ask my­self, if it is pos­si­ble that just like you are do­nat­ing to churches and mosques, you could as well put aside a tin of milk, sar­dine or what have you, maybe to the Oba or some­one, and cre­ate what is called a ‘soup kitchen’ so that those who are re­ally des­per­ate and are hun­gry can have some­thing to eat. If there are 1000 peo­ple that are hun­gry, and they can only feed 200 peo­ple, they have done well. Not ev­ery­thing re­quires money, if we did this “soup kitchen” for in­stance, the num­ber of peo­ple that are go­ing to bed with­out a meal will be greatly re­duced, and you know the man called Jobs [Steve]? I am sure you have read the story, for a long time, what he did was walk from where he was do­ing his work, to soup kitchen where he knew there will be a meal, he’d get his meal and come back to his work, he ran his life like that, be­cause no mat­ter what he is think­ing about or de­sign­ing, the money wasn’t go­ing to come im­me­di­ately, now how many of the kings and Obas, the Obis, can a stranger get a meal from? In our coun­try, I know the way har­vest is done, some of these pro­duce are given to the kings and chiefs, so why can’t they come up with the soup kitchen idea? I keep ask­ing, where is the to­geth­er­ness, where is the spirit? I saw some­thing on so­cial me­dia and the per­son was ask­ing God to change some­one and God replied ask­ing if the per­son had no arm or legs, but Nige­ria, it seems we have arms and legs but no spirit, each of the group is think­ing they are smarter and can take over from the other group, as long as this roller­coaster con­tin­ues, you can’t achieve any­thing.

For me, the young ones are the ones do­ing some­thing. I was on a flight once with one of these mu­si­cians to Abuja, and he had bought a top class sit for him and his girl­friend, he had his sit next to his girl­friend’s but I think they had later sold that seat to a se­na­tor or some­one and he was re­ally mad. He was scream­ing and shout­ing, so I called him to the side and told him, “lis­ten to me, you are the ones we look up to; you play mu­sic, we buy, we know how your money comes, so why will you be ar­gu­ing with some­one that you don’t know how he gets his money?” And the guy just went down and left the sit and peo­ple were ask­ing for what I told him. You see, we might not want to ac­cept it but the only pride we have left in Nige­ria are these guys, the mu­si­cians and the rest of them, they are putting in so much work and are pro­duc­ing. With­out the youths in Nige­ria, Nige­ria would have lost it com­pletely. I re­mem­ber those days when we were young, you’d go to a party in Eng­land and you will be lucky to hear any Nige­rian song, but now our songs are all over the place. I went to my friend’s son’s wed­ding to a white girl, deep Sur­rey, they are as white as they can be, and for the whole pe­riod, they played Nige­rian songs and all the white kids knew the lyrics to every song, knew the dance too. I don’t think they re­spect our le­gal sys­tem, ed­u­ca­tional sys­tem, en­gi­neer­ing sys­tem or po­lit­i­cal class like that, that is what these young peo­ple have been able to achieve and yet we do not have a struc­ture for it, most of their records are stolen, and their mu­sic has no in­tel­lec­tual prop­er­ties in place. I will still have to ad­mon­ish the press to set the agenda. I mean, with­out these young peo­ple and women, we have lost it. An­other thing is that, if not for the fact that Nige­ri­ans are al­ways buy­ing aso-ebi and throw­ing big par­ties, the econ­omy would have been dead. As­sum­ing all the money stolen were spent like the Chi­nese and In­di­ans, who will con­vert the money through FX ac­tiv­i­ties and take it out, the econ­omy would have been dead. It is the mar­ket women and our con­sump­tion pat­tern that still al­lows the money to cir­cu­late a bit.

So, the ques­tion is: How do we set and agenda? Set­ting an agenda is not be­yond us, but it must be clear in our se­quenc­ing, the kind of in­for­ma­tion that we give and since I am a cap­i­tal­ist, make sure that what­ever you are do­ing brings money for you.

You spoke on the CBN in­ter­ven­tions, you said they are not sus­tain­able in the long term, so what is the way for­ward?

They are not sus­tain­able, there is a vas­cu­lar sys­tem. What we have now is the banks were in a sit­u­a­tion where all the branch man­agers were steal­ing money to lend to their friends. So what we do in Nige­ria now is that, all the credit in Nige­ria come to the head of­fice, there is some­thing called the credit com­mit­tee, they de­ter­mine who to get what and all of that. Very often they get it wrong, so rather than give to lo­cal busi­ness­men they will give to some­one who will im­port ce­ment and orange juice. So, the Cen­tral Bank is now frus­trated and has de­cided to in­ter­vene or else they will not be able to meet their in­fla­tion­ary tar­gets, but that is not an ap­pro­pri­ate so­lu­tion. I re­mem­ber meet­ing Kings­ley Mo­galu, when he was the deputy gov­er­nor, so I asked him, “Kings­ley, I heard you guys are so smart now, that the idea of branch man­age­ment no longer ex­ists.” He said no, but if the Cen­tral Bank doesn’t lay down the pol­icy, they will keep miss­ing it, they are only in­ter­ested in get­ting their money back, the size of the per­son’s car, where he lives or the suit he wears. The CBN has no choice be­cause if it doesn’t in­ter­vene, it would be­come a bas­ket case, but it is not a sus­tain­able ar­range­ment. The Cen­tral Bank is a lender of last re­sort, not the lender of first re­sort be­cause that is what they are do­ing. They are the ones do­ing the lend­ing. There was a time I spoke to one of these de­vel­op­ment bankers, and asked him why they do these things and he said, “Charles, these banks have no money.” So, why can’t they take back their li­cences? In Nige­ria, you won’t see a bank that spe­cial­izes, be­cause the need to spe­cial­ize does not ex­ist and again, be­cause there is such bulk­ing in the civil ser­vice, so many agen­cies, they don’t even know where the money is go­ing but is be­ing bud­geted for. They give the banks all the money, they put it in trea­sury bills. Now the gov­ern­ment has to sus­tain that joke be­cause if the trea­sury bills are not there, the pen­sion funds will have nowhere to in­vest. So we are just spin­ning around with­out af­fect­ing any­thing. I am not the CBN gov­er­nor, but what they are do­ing is not sus­tain­able. We need to go back to branch man­age­ment.

Every com­mu­nity in it­self must be able to sus­tain what it wants to do. If you have been to Osogbo, Osun state, you will see the sec­re­tariat in Abere, mas­sive. It was built by Akande [for­mer gov­er­nor Ade­bisi] and the build­ing of that sec­re­tariat was not done by Julius Berger, he used di­rect labour. So if you could build a sec­re­tariat like that, you can build things like that, and once we be­gin to live in an en­vi­ron­ment like that is ap­pro­pri­ate, even our think­ing will de­fer. I re­mem­ber when they were build­ing the Ikeja City Mall, they said, ‘oh, there must be lo­cal con­tent’, tiling was then given to Nige­rian boys to do, and when they fin­ished tiling, after spend­ing up to N30 mil­lion to N40 mil­lion, what they did was ter­ri­ble, so they threw ev­ery­thing away and got some small boys from Benin Repub­lic, young boys within the ages of 9-13, they had their in­frared ray, worked day and night, what they achieved in a short pe­riod was amaz­ing. So those skill sets are miss­ing; is there are no NVQs?

I will tell you a story. In Eng­land they build with what is called burnt bricks. Most of those bricks are baked and done by peo­ple who are try­ing to achieve what is called Na­tional Vo­ca­tional Qual­i­fi­ca­tion. In other words, they build those bricks to jus­tify their cer­tifi­cate, so it is a win-win sit­u­a­tion, you build the bricks, you get your cer­tifi­cate.

You need to un­der­stand how Amer­ica beat the rest of the world in less than 180 years. Amer­ica was a baby, but the dif­fer­ence be­tween Amer­ica and Europe is, if your fa­ther is not this or that, you will never en­ter the in­dus­try, the Fords and many of them like that. But then Amer­ica said, no, there is no need for that, we can take the car apart and find those who will do the com­po­nents; and so that gave rise to what is called as­sem­bly plants. These suits we are wear­ing, some­one will do the cut­ting, some­one will do the sewing and stitch­ing, and be­cause there is an ar­range­ment, every­body gets his own money and the fin­ished suit is stan­dard. We need to look at our­selves. Ini­tially, I thought that was what was meant by due process, but we must un­der­stand the eco­nom­ics of in­dus­trial pro­duc­tion, how can these things be done prop­erly, con­sis­tency must be in place, but we are a con­sumer econ­omy. You see, whether you are con­sumer econ­omy or pro­duc­ing econ­omy, they are both bad, you must strike a bal­ance, and that is the strength of Amer­ica, it has a good bal­ance, some other coun­tries pro­duce so much and have very poor con­sump­tion, it is only now that China is be­gin­ning to buy Rolls Royce be­cause con­sump­tion is very im­por­tant. We are lucky in Nige­ria that we have a con­sum­ing pat­tern, so all that needs to be done is to tweak the pro­duc­tion pat­tern and then we are close to hav­ing a bal­ance. An aw­ful lot of peo­ple may un­der­stand eco­nom­ics, which is good but might not un­der­stand the mar­ket, and the mar­ket is very im­por­tant be­cause we must un­der­stand the mar­ket for the econ­omy to move.

Over the years and even over the decades, has gov­ern­ment re­ally un­der­stood the mar­ket and how can they es­tab­lish what kind of econ­omy it runs, be­cause I think there is a fun­da­men­tal mix up?

Your first ques­tion on if the gov­ern­ment un­der­stands the mar­ket, the an­swer is no. You are cor­rect when you say the gov­ern­ment hasn’t been able to pin point the type of econ­omy it runs, I wrote an ar­ti­cle two weeks be­fore the gov­ern­ment was sworn-in, I said the gov­ern­ment has to make up its mind if it wants to run the econ­omy by mar­ket sys­tems, but any­time some­one men­tions mar­ket in Nige­ria, peo­ple see a con­spir­acy, like you want to just cor­ner all the money. I re­mem­ber go­ing to some­one in BPE, and I sug­gested some­thing to him about the power sys­tem, and he said “you and your friends want to come and cor­ner the power sys­tem.” Even­tu­ally the guy be­came a min­is­ter, but it was too short, he wasn’t ready for how the mar­ket works. Ba­si­cally, if mar­kets don’t work, noth­ing is go­ing to be achieved be­cause the ba­sis of the fun­da­men­tal def­i­ni­tion of the cur­rency and its di­men­sion is the ef­fi­ciency of the mar­ket. If the mar­ket is not ef­fi­cient, there is no way that those three di­men­sions of the cur­rency can main­tain, if you don’t main­tain those three di­men­sions, in­fla­tion comes in, if in­fla­tion comes in, goods and ser­vices go that way, and if then you don’t have any di­rec­tion from the fis­cal side, you are in trou­ble. The thing is, these sort of dis­cus­sions are not sup­posed to be for the me­dia, it is meant for peo­ple sit­ting down qui­etly, think­ing on be­half of the rest of us.

One big prob­lem the coun­try has is the pri­mor­dial is­sues. Let me tell you, when I was in the uni­ver­sity, I had no idea which tribe any­body was from but I re­mem­ber one day my car crashed, I was out of the car and one man who was pass­ing was say­ing, “God has caught him. Let him even die. He only car­ries ladies in his car.” Funny thing was I rarely drove the car. If you know the Uni­ver­sity of Ife very well, chem­i­cal en­gi­neer­ing and phar­macy stu­dents were al­ways busy with lab work and had no time for so­cial life. [But] that is the kind of hate that runs in this coun­try. It gets worse when the poverty is not only of the pocket alone, if it is also of the mind, it is harder to cure, but don’t let any­body tell you that your gen­er­a­tion is lazy. Davido spent up to N800 mil­lion for his birth­day on a yacht in Florida, they should go and probe him now, there are some coun­tries that all these peo­ple en­ter in Africa and the whole place will scat­ter.

They say en­ter­tain­ment can’t drive an econ­omy, look at Amer­ica. Eng­land doesn’t pro­duce any­thing, but look at what foot­ball makes for the coun­try. I am not say­ing the en­ter­tain­ment in­dus­try should drive the econ­omy alone but it can do so much. So, what my gift to the young peo­ple is, what is that thing that you want to drive? What are the things you want to do, now you have a plat­form in so­cial me­dia, put it out there. I keep telling peo­ple that so­ci­ety does not move by in­ven­tion, they say “ne­ces­sity is the mother of in­ven­tion”, that’s not the case for so­ci­ety. What moves so­ci­ety is in­no­va­tion, and in­no­va­tion only ex­ists when there is ex­cess, so you are here to­day be­cause if you fail once or you fail twice, your par­ents will make sure you con­tinue, some peo­ple if they fail once, that is it, so it is not be­cause you are smarter than the other per­son, but be­cause some­body was there to make sure that you con­tin­ued, so so­ci­ety must find a way to cre­ate more than enough

The civil ser­vice is also sup­posed to be able to stand up for it­self and also su­per­vise the ex­cesses of politi­cians be­cause politi­cians have ideas, but they have the ten­den­cies to want to pro­tect pri­vate in­ter­est more than de­fend­ing the pub­lic good


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