Nigeria’s Economic Management: Between Hindsight and Rascality, By ‘Tope Fasua
In this season where everyone has an opinion – and that is okay – one can only urge caution lest the benefit of hindsight (20-20 vision) propels some people into reckless claims and statements. Managing the economy has never been child’s play, least of all now. In fact, the solutions to our economic problems are no longer in the realm of economics but in our socio-psychology.
Nigerians are angry; justifiably so. They say a hungry man is an angry man. The economy has gone down south and Nigerians aren’t finding it funny. The problem is that we are now in lynching mood, baying for the blood of anyone whom we could find remotely culpable. Nothing wrong with that. After all, alongside the quest for, or the luck to find thrust upon one, public office – especially in this country – is tantamount to public opprobrium. Aside from the likelihood of making loads of money (for which you may be probed and wrecked in the near future), and having considerable influence, one wonders at times why anybody would seek the trouble of a Nigerian public office.
Nigerians have all the rights to complain, rave and rant, and to call for the heads of those whom they deem culpable for their predicament. But in this peculiar instance, not all Nigerians are equal. We have now reached a point where our people no longer introspect; where many of yesterday’s men, who are indeed a major part of our problem, are busy riding on public sentiments to launder their own image, or lull the public to a state of somnambulism. It gets even worse. Recently, the committee of former GMDs of NNPC (what a lucky bunch) met with the incumbent and declared that Nigerians were not paying enough for Premium Motor Spirit. They dared to touch – at the risk of their immense wealth and luck – a topic as volatile as the underlying product. Nigerians were asking; are these guys saying we have not suffered enough?
Before the lucky GMDs, there were two ex-Central Bank governors who had made statements with varying intensities on the matter of how the economy is being run. Professor Soludo was more measured. He asked for restructuring, and pushed some of the tenets of liberalisation. He recommended industrialisation and spoke of development planning. Then came Emir Sanusi, who was more acerbic. This man is irrepressible and not even his royal robes could hold him down. He spoke about Nigerian big men who do what accountants call “teeming and lading” with bank loans; using their influence to collect from one to repay another and living large until they cause systemic banking crisis. He also spoke about government having created room for unnecessary arbitrage opportunities for the same smart Alecs through its FX policies. The Emir however contradicted himself when he started to push for neo-liberal policies which I recall he fought against while CBN Governor (you know, all that talk of market being everything and so on. Sanusi fought against devaluation under his watch but now vilifies the CBN for not “fully floating the naira”).
I believe that real intellection and love for country demands that we take our economic debates to a new level. It wouldn’t have been bad if these ex-Central Bank governors actually admitted how tough they found governance and national economics in their time, and put current challenges within that context. This is important because of one inalienable fact – the job of central bankers is a losing game. They usually commit to catch so many rats in a room and many times end up catching NONE. It would be great if these gentlemen explained to Nigeria how impossible it is to keep track of the value of the naira while also ensuring that interest rates and inflation stay down. It would have been great if they showed us how tough it was for them – in their times – to maintain financial sector stability, monetary autonomy, and make policies for the growth of the economy, while strategically intervening in critical sectors. For me, they would have been greater and better for subtly revealing their own vulnerabilities and being very choosy with their words while criticizing the incumbent.
As far as central banking is concerned, the last two in Nigeria were forced out. One directly, the other indirectly. Many Nigerians had no good words for both of them. As a matter of fact, after Abdulkadir Ahmed spent 11 years as CBN governor between 1982 and 1993, none of his successors have had their tenures renewed. Paul Ogwuma spent five years and five months, Joseph Sanusi completed a five-year term, ditto for Chukwuma Soludo. Sanusi was not allowed to complete his five years in office as he was relieved of the position three months to the end of his tenure. Over recent years, the concept of relative central bank independence grew and I believe this must be protected, more so as we had our own nasty experience at some point when a military leader was alleged to have had his children collecting truckloads of money from the apex bank. The issue with comments from former central bank governors is that they made it sound as if it is easy work. In my view, it is an impossible task.
I hate bullies, and I have watched as Emefiele has carried himself with dignity even as every Dick, Thomas and Dino take turns to tell us of how incompetent he is. Let me place it on record here that no central bank governor can go unscathed in an economic crisis. The work of central banks is about “flip-flopping” at the end of the day.
That is where Senator Melaye comes in. A relatively young guy, Melaye’s profile has soared in recent years as he rapidly progressed from being a member of the House of Representative to a Senator. He has also declared his intention to be the president of the Federal Republic. In terms of ambition, Dino has no shortage. And as an orator and motivator, it is hard to find a Nigerian that parallels him. His commentary on the ongoing economic crisis took me aback as he pulled no punches at all. If anyone should be cautious and introspect in my view, it is Dino, whose cars alone could be worth a billion naira or two. But here we are, in a situation where everyone who should be contrite now leverages on the misfortune of Nigeria’s suffering masses; and the millions who have lost their jobs and are now in despair. Dino himself knows that he is merely good with high-sounding words and an ability to confuse the public.
The man called for President Buhari to “stop barking and start biting”, a shocking analogy that compares the poor old president to a dog – or ‘kukuma’ calls him one. This is Africa. Anyone who tells his father to “stop barking and start biting”, is but a bastard. I thought Melaye was smarter, and I wonder what intra-party feud made him basically insult the president in this manner. Even we that are not close to the corridors of power dare not accuse the president of “barking” – not even from afar. Melaye did. The presidency has said nothing about that. Our children have learnt that nothing is wrong with telling elders to stop barking, in an age where our traditional wisdoms have almost all eroded. Some recent experiments I conducted revealed to me that among Nigerians from the ages of one to 30, those folk adages of ours, those deep-rooted advices, are all but gone. They don’t just understand them the way we did.
So Melaye went on to name the people President Buhari should sack immediately and why. First, the Minister of Finance. Her sin? In Melaye’s view she is incompetent because she did not handle a large portfolio before she became minister. I wish it is actually the size of portfolio that will take Nigeria out of the doldrums. He mentioned the Minister of Economic Planning too, for the obvious fact that he is a lawyer doing the work of an economist. But if it were for experience, Udo-Udoma has been in and around economics and finance for decades, being a board member of many large companies and being the chairman of the board of the Securities and Exchange Commission. He was also member of the Public Accounts committee, as well as Banking and Finance, while a Senator.
Melaye’s rant brings up this new rage in town among economists, who believe that the economy is adrift because they are largely excluded from government. Empirical evidence shows that, really, economists have been responsible for piloting toxic policies in Africa. I am one, so I have a right to excoriate us. Many of the prominent economists laying complaints are neo-liberal goons whose idea of turning around the economy is interwoven with toxic policies and harebrained prescriptions which they read inside some textbooks. Melaye was merely providing these guys with some amplification.
On the CBN Governor, Melaye laid it on Emefiele, complaining about “policy flip-flops, somersaults and inconsistencies as clear evidence of gross incompetence in the management of the nation’s fiscal and monetary policies.” The first gaffe here is that he laid fiscal policies at the doorstep of the CBN. I hate bullies, and I have watched as Emefiele has carried himself with dignity even as every Dick, Thomas and Dino take turns to tell us of how incompetent he is. Let me place it on record here that no central bank governor can go unscathed in an economic crisis. The work of central banks is about “flip-flopping” at the end of the day. When you try a policy, you keep an eye on it and if the results are not what you desire, a good central bank changes course. The Nigerian economy is peculiar in that it is fairly large and has potentials, but we make the mistake of expecting the same level of stability that European economies have achieved only after centuries of painstaking grafting (hard work). Are we ready to put in the work?
The anger of the people with Emefiele stems from the high levels of interest rates – which are arrived at by votes from members of the Monetary Policy Committee of which he is a member – and of course the management of foreign exchange. Nigerians are obsessed with the dollar…
Dino spoke about the possibility of his constituencies stoning him because there is hunger in the land. He knows as well as anyone why his constituents may be angry with him. Have we not seen rich men in other climes and how they have sacrificed for their people, and even ours? How many of these Nigerian big men calling for the sack of some people have given out any tiny fraction of what they have to these constituents in order to assuage the suffering in the land? What has Dino ever managed as a business or government institution that gave him the rights to disparage other people in such a crude manner? How many people has he led in a structured environment apart from political noisemaking? What pledge is he ready to make right now, to break the mould and set the pace for other big boys like him? How many of Dino’s Rolls Royces, Bugattis, Bentleys, Ferraris, Lamborghinis, Range Rovers and many mansions is he ready to give up for these his “constituencies”? How much of the obscene wealth which he has rubbed on our faces even as a public officer? Is he even ready to account for how the wealth was come about? Since the president has been “barking” in his words, perhaps the president should have bitten by doing a lifestyle audit on some of his party members, like Melaye. Maybe Dino will be happy.
My point is that we should be careful how we react and tear down institutions. Emefiele, like everyone else, has his own faults. I cannot also speak for CBN, but as an economist I see and appreciate the complexities of their work. I have written books which propound out-of-the-box solution, but it is beyond me to call names and ask the president to sack people. It will be bad for the economy and for our institutions if two central bank governors’ tenures will be truncated back-to-back. It has never happened before – not even under military regimes. And if Buhari has chosen to work with certain people, it is his decision, it is his time, it is his legacy that is at risk. The anger of the people with Emefiele stems from the high levels of interest rates – which are arrived at by votes from members of the Monetary Policy Committee of which he is a member – and of course the management of foreign exchange. Nigerians are obsessed with the dollar, and the Federal Government itself is the most culpable in this business of “dollarising” the economy (story for another day).
In this season where everyone has an opinion – and that is okay – one can only urge caution lest the benefit of hindsight (20-20 vision) propels some people into reckless claims and statements. Managing the economy has never been child’s play, least of all now. In fact, the solutions to our economic problems are no longer in the realm of economics but in our socio-psychology. Yes. Socio-psychology. There is a reason why they say economic policies that work elsewhere don’t work in Nigeria. Our problem is in our mind, in our thinking. Until that mindset changes. Our problem is what compelled Sir Isaac Newton, when he lost 20,000 pounds in the stock market in 1720 (in what became known as the South Sea Bubble), to exclaim upon being asked why he, a theologian, philosopher, astrologer, historian, economist, physicist and all that would fall for such a scam, to say “From where I sit, I can tell the movement of the stars, but not the madness in the heart of men”.
Only a dishonest person will claim that they have the exact solutions to Nigeria’s economic problems. Or perhaps an economic rascal. Again, story for another day.
‘Tope Fasua, an economist and consultant, is CEO of Global Analytics Consulting.