Soludo, Sanusi and the Economy

There is this story of a couple driving on the road when another car drove past and nearly pushed their vehicle into the bush. Shaking his head, the man muttered: “Women! They are lousy drivers”. This was in apparent reference to the person on the wheel in the car that drove past. Not done, the man began to reel out examples of how women cause road accidents to the consternation of his wife who felt angry about the generalisation.

As it would happen, in the course of the conversation, they caught up with the car that started the debate only to discover that the driver was actually a man. “You see now that it is a man,” said the wife who was expecting an apology. But our man had a ready reply: “Well, his mother must have taught him how to drive.”

That story illustrates how some people would never allow facts to stand in the way of whatever they want to believe. With such people, you can never win any argument so it is a waste of time trying to rationalize with them. That was what I tried to explain to my friend, Nnanna Anyim Ude some weeks back after he sent me SMS on the “hornet’s nest” stirred by my column of that week, referring to the comments by readers below the piece.

Ordinarily, I don’t read comments below whatever I write not only because the personal mails I receive are usually many and serve as enough feedback but also because I have no temperament for those who would rather abuse—and that is the only thing most of those people know how to do. The reactions are usually not about the issues under discourse but rather about their perception, mostly prejudicial, of the writer in a nation where many judge others by their own standards.

That is perhaps the only way to rationalise some of the knee-jerk reactions to the interventions on the state of the economy by two former Central Bank of Nigeria (CBN) Governors who have, in recent weeks, spoken almost in quick succession.

First, it was the Emir of Kano, HRH Muhammadu Sanusi II, who warned the authorities not to be in denial about certain economic fundamentals that do not add up. He spoke about the restrictions on foreign exchange trading and its implications, the seemingly unrealistic value of the Naira within the context of prevailing circumstances and the sustenance of the wasteful, inefficient and fraud-ridden regime of subsidy in the downstream sector of the petroleum industry. The reaction of many of our “experts” and politicians to Sanusi was typical: “Let him go and sit down!”

Speaking two weeks later but along similar line, Prof. Chukwuma Soludo argued that the politics of naira value, the rigid foreign exchange (forex) regime, the controversial bailout funds for state governments among other policies of the Federal Government could be counterproductive to our national economic well-being. He also canvassed the removal of fuel subsidy and a more realistic implementation of the Treasury Single Account (TSA). The reaction: “Soludo is a frustrated man!”

I am not an economist and for that reason not in a position to add anything to what these two former CBN Governors have said. But anybody with a modicum of commonsense can see very clearly that the economy is in trouble with oil price on a free fall (now at $38 per barrel). That ordinarily means President Muhammadu Buhari would need to rethink nostalgic ideas like “reviving Nigeria Airways” while it remains to be seen where the money to pay some 25 million Nigerians N5,000 each per month (apparently to buy recharge card) will come from!

However, the bigger challenge is in the management of the downstream sector of our petroleum industry. Given the biting fuel crisis of recent weeks, against the background of the N435 billion supplementary budget proposal to pay for a single consumption item, I am working on an intervention that will lay bare some of the issues around subsidy payments in recent years. It will be published as a series on this page very soon.

The essence is to show that the choices we make (or refuse to make) today will have serious consequences that could last for many years to come. That is why I believe the authorities should pay attention to what both Sanusi and Soludo are saying. It is difficult to argue that both of them do not know what they are talking about or describe them as enemies of this administration.