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Nnah Simeon Uchechi is a Professor of investment leadership in the Faculty of Management Sciences, European American University, Dominican Republic. He was also conferred with a professorial fellowship and a professor of corporate leadership at Western Orthodox University in Rome, Italy. He holds a PhD from European American University and a second PhD from Aldersgate University in the Philippines. He is a fellow of several professional bodies both in Nigeria and overseas. He is equally the current Chief Executive Officer of the Lagos State chapter of Afridu in Nigeria.
In this interview with BENEDICTA BASSEY, he speaks on the current economic issues in Nigeria, the problems with political leadership in the country and the solution for a robust economy. Excerpt:
What is your take on the recent inflation hitting the economy?
What we have today is not just inflation but stagflation: which is simply a simultaneous appearance in an economy of slow growth, high unemployment, and rising prices.
Matter of fact, it is a situation where you have depression and inflation at the same time in any economy. The geometric progression at which prices of goods and services are increasing is unprecedented in the annuals of this country.
However, this was caused majorly by the twin policy of this administration which was not thought before they were introduced. The removal of subsidies and the floating of the Naira are responsible for the unpredictable rise in the cost of living and the impoverishment of the masses.
Let us make no mistakes about this.
There was agreement in all quarters that subsidy was a scam and the government should do away with it, however, the question the authorities have refused to answer has been whether they are paying any subsidy with the barter arrangement of NNPCL which was direct sales and direct purchase arrangement.
These, with other confessional statements made by the former Minister of Aviation and former Governor of Bauchi state, H. E. Isa Yuguda concerning what his friend told him about his meeting with the former president H. E. M. Buhari. Note that this confessional statement was made on Channels Television, and not on social media; so one is at a loss on how this government will just wake up on the day of the swearing - and just with a wave of the hand declare "subsidy gone ". The unresolved question here is which subsidy?
Is it the imaginary one in the minds of the International Monetary Fund (IMF) or the one that has been proved that they are just doing round-tripping and collecting hard-earned dollars and sharing amongst themselves?
Note that the IMF had always insisted that the pump price of fuel in Nigeria is very low (cheap) and the Naira over-valued. Successive governments have resisted the pressure to succumb to this blackmail by the IMF.
If my memory serves me, it was what caused the late Senate President Okadigbo to lose his job as the Senate President. He stood between the former President Obasanjo and the IMF on this same policy that is creating this problem today.
Again, if my memory serves me right, I believe that during the regime of the military Head of State, General Sanni Abacha, he came up with the same idea of selling dollars at an official price at the banks, and the first-tier market and the parallel market which was the second-tier or what we call the black market at the local parlance.
Then people bided at (#22.00) twenty-two Naira at the official market for spare parts for their machinery and equipment as manufacturers and just immediately sell through their own commercial banks or merchant banks then at about (#80.00) eight dollar or eighty-two Naira per dollar this was just a case of round-tripping.
They were just trading in dollars for some hours and they were making a whooping sum of (#58.00) or more per dollar. When the government saw what was happening, they merged the two markets. I remember vividly some businesses that closed shops.
There was this particular business mogul whose merchant bank and airline closed shops almost immediately because all he did was use his aeroplane to bid at the official rate and use his merchant bank to sell at the black market rate. This has been the trajectory of this dollar business in Nigeria.
Bankers and influencers or influential people, people of means and those in the corridors of power just buy dollars for speculative purposes and sell them at exorbitant prices for personal gains.
Note that this does not add any value to the economy; it just lines the pocket of a few individuals who have access to it to the detriment of the economy.
So these individuals mop up the dollar in circulation, and the manufacturers and the businesses that need these dollars for productive purposes buy them at cutthroat prices hence they are passed to the final consumer who bears the brunt. Hence the vicious circle continues.
I equally recall that his economy adviser then, I think Prof. Aluko a renowned economist warned about the speculative nature of this idea and insisted as he postulated that any currency that is not exchangeable in the international market is not biddable but fixable.
Hence he warned the government not to bid on the Naira but to fix it because if you destroy the Naira once you allow market forces to determine the value of the Naira by allowing it to be floated just as the IMF and the World Bank have insisted on.
The argument that people and some political economists and chartered accountants are bringing up is that you cannot continue to defend the Naira because you cannot sustain it in the long run. Sound as this argument might look it does not hold water for some of us The reason is they are living the substance of the matter.
What can the Government do to remedy the economic situation in the country?
The problem with the economy is that the government is carried away by the oil doom sorry boom that they have forgotten that we have solid minerals that can earn more dollars than oil. At the last count, apart from Congo DR, I cannot remember any other country of the world that has as many mineral resources as Nigeria in terms of numbers (44). Somebody should please correct this assertion of mine with facts and figures.
So why are we not extending our drag nets to these solid minerals which can earn even more dollars than oil?
It was reported that a particular State during the last administration sold their gold to the Central Bank of Nigeria. While the crude oil is tapped by the Federal government and sold for all the states of the Federation to share, the same government allows other states to mine and sell their solid minerals for their state consumption alone. So where is equity? This is a discussion for another day.
The point am making here is, that if the Federal government can harness our solid minerals and tackle the linkages in the disbursement of dollars by the CBN, we do not need to float the Naira.
We shall have enough dollars to sustain a fixed rate of the dollar without subsidising it because there will be more than enough dollars to be put to productive use.
I have just said that if you do the right things we shall have enough dollars for our needs but not enough for our greed as is the case now.
Let truth be told, it is my candid opinion that this government was not shopping for legitimacy and acceptance by the world powers hence they succumbed to this blackmail by the World Bank and IMF. There is no economy of the world that falls prey to IMF conditionalities that have not run into crisis with the pretentious IMF turning around to lend money to them as a bail-out to the mess they created.
The government should as quickly as possible go back to the drawing board and ensure that the pump price of fuel is revised. This might not be easy with the current dollarisation of the economy.
However, the government should ensure that all four refineries in the country are repaired and they commence production immediately with the Dangote refinery and the other modular refineries, the pump price of petrol can be within the range of hundred Naira per litre.
Once that is done, the minister of solid minerals will as a matter of urgency stop the lip service that the former ministers have been paying to solid minerals.
They should dust the document or if you like the blueprint that Dr Oby Ezekwesili produced while she was the Minister of Solid Minerals which they did not allow her to implement rather, they moved her to another ministerial.
The government of the day should hold the bulls by the horns and do the needful in this. Honestly, if we do this with the sincerity of purpose, this economy will be out of the woods in less than no time.
Is there any problem with the political leadership of the nation?
Can we be honest with ourselves for once? I can succinctly say this and you can go to the bank with it, the problem of our leaders is the political will to take the bulls by the horns.
The few who want to muster the courage are afraid of the unknown.
They want a second term in office hence they are afraid to take certain decisions that they believe will affect their chances at the polls for a certain term in office.
How can these lapses among politicians be tackled?
To tackle this problem I am in strong support of our governors and presidents having only one tenor or a single term of either five or six years. Once the National Assembly can achieve it and it is signed into law, let it even start at the expiration of the opportunity for a two-term ticket for the present administration if God permits that. It will be seen that successive governments will hit the ground running from day one and continue to do so till the last since he has nothing to lose.
The government recently came up with implementing the Orasanye recommendation of rationalising the Ministries, MDAs, agencies and parastatals. What's your take on that?
I heard the government say that there is a guarantee that there will be no job losses.
This is another political promise. If you merge three MDAs, parastatals or agencies with three chief executives or even two. You will have two general managers or directors in the case of MDAs. So can these offices be shared? Are we going to have two chief executives or one will be the deputy chief? The general managers too? The government should be sincere there must be a loss of jobs at the top.
So many offices will be duplicated. I have said this to add that if the people in service are losing their jobs how can fresh graduates be employed in that system?
It is a tall order. Unless you are from a top politician in the corridors of power, a senator or a member of the House of Representatives.
Now, let's know your assessment of the education sector in Nigeria.
Education is now taking the back seat in the country. A closer look at our universities; some of them are glorified secondary schools.
In a situation where a kerosene stove is used in our university laboratories as a burner, what type of experiment or research do you want to conduct in our universities when there are no research grants, even the ones that are available, the enabling environment is not there for the dons to assess them. It is a lot of a complete mess.
What are the impacts of the persisting inflation on the education sector?
It is crystal clear that education is meant for the rich in the country today. A poor man who cannot afford one triangular meal a day because a square meal is out of the question; how can such a parent cope with the current hike in school fees and other sundry expenses for an indigent student?
Some of them are already dropping out of school because they cannot cope with the economic hardship.
Most universities have ruled out the sales of lecture notes or handouts as it is popularly called on our campuses because of abuse by a few lecturers.
The textbooks are out of the reach of some of these indigent students so the problems of these students are compounded.
Some of these students, parents are civil servants and are in the lower cadre whose take-home pay can only take them to the bus stops. They do not have enough to fund their transport to the office the next day till the end of the month, not to take of feeding the family and paying the bills in the house.
So the education of many students is being adversely affected and something should be done quickly to alleviate the problem.
I heard that the government is making available grants, loans etc to these indigent students. I have been in this country for very close to seven decades now, I know how things work here.
As far as these funds are going to be disbursed by either civil servants or political office holders, they will be allocated to the children of who is who in the society and that of senior civil servants and politicians and their cronies who wish to study in the country as against the common practice of going abroad to study.
The indigent students will be asked to go and bring the head of their late great-grandfather or mother to access either the grant or the loan. It will be easier for the biblical Carmel to pass through the eye of a needle than for an indigent student to access those funds.
The conditionalities will be more stringent than those of the IMF. It will rather be easier for one to obtain a loan from China written in the Chinese language than for an indigent student to obtain that one.
Mark my words; if up to 25% of the indigent students obtain that loan or grant it will be the miracle of the century. I have read many arguments for and against this policy; a major question that has not been answered is how the students who access these loans will pay back. In other clans where this is practised, the students are granted a job once they graduate and the money is deducted at source from their salaries until the debt is liquidated. In our case where are the jobs?
In a country where both unemployment and underemployment are so high, students who graduated five or more years ago are unemployed and doing minor jobs to survive. I met somebody today who graduated in 1997 / 98 from the University of Ibadan. He is engaged in all manner of jobs to survive. At other times, he is hustling at the computer village to be able to feed himself and the family. It is that bad.
The fear today in the minds of most youths is this. After graduating with a 2.1, one can spend more years job hunting, making some assert that education is a scam, what is your take on that sir?
I completely disagree that education is a scam. No. Far from it, those who have this notion are probably, the class of people who believe that once you graduate from a university you must have a white-collar job. Truth be told, some blue-collar jobs are much more paying than white-collar jobs. You are trained in the universities to be resourceful and to use your brain to create wealth. Legitimate wealth.
A lot of graduates who went to do trading, farming, plumbing jobs, shoe making etc are doing exceptionally well. Once you encounter them, in their line of trade, you will notice a clear difference from the norm in that line of trade or business.
Parents who can afford it should try and send their children to school. It pays off in the long run, it is a long-term investment.
