‘Buhari’s structure to tackle
corruption is weak’
Mr. Olisa Agbakoba (SAN) is a former
President of the Nigerian Bar Association (NBA). Agbakoba, in this interview,
speaks on the state
of the nation.
of the nation.
By Ikenna Asomba.
President Muhammadu Buhari has spent
one year in office. Three months ago, you warned that Nigeria was sliding into
recession. Do you maintain that stance?
Yes, about three months ago, I said
Nigeria was sliding into recession, because a recession is two quarterly
negative growths. So, now that the politically incorrect word – recession – has
finally been said by the Central Bank of Nigeria and National Bureau of
Statistics, NBS, let me say that we are not in recession, but in depression.
Nigeria has recorded five consecutive quarterly growths up to 2016 first
quarter (Q1), which showed a negative balance. That is a depression. Critically
speaking, nobody is making profit. We calculate the growth rate by Gross
Domestic Product divided by the population, thus goods and services produced
are divided by the population. The current growth rate for 2016 Q1 according to
the NBS is 0.34. The last, which was 2015 Q4, was 2.11. So, we are now at a
depression stage. And if you know what the critical index is, you find out that
things are really bad. The Foreign Direct Investment, FDI, is zero, the stock
market is down, petroleum prices are up. No good news.
However, in appraising the one year in office
of President Buhari, we must acknowledge the crisis of the old order and the
hope of change. The path of the old order remains that things were very
difficult, there was high corruption, there was insecurity, we had the Boko
Haram menace among others. The pertinent question you then ask is, how has
President Buhari handled them?
In the beginning of this administration,
I was cautiously positive but right now I am cautiously negative. But I am
waiting to see what will happen. In all fairness to President Buhari, he has
been challenged by the unenvisaged crisis of governance he found- a technically
insolvent country, bailouts and many of those things which meant he was bugged
down and couldn’t get into governance.
Over the last one year, what do you
make of President Buhari’s anti-corruption war? *
Olisa Agbakoba* Olisa Agbakoba Credit must go
to him on his anti-corruption programme. However, my problem with his
anti-corruption programme is that it’s a rigmarole. The programme has centred
on stories that government is doing this and that, which is good. But I must
say that if the President keeps looking in the rear mirror, as he had been
doing in the last one year, he won’t move. The Buhari’s anti-corruption
programme is an equivalent of a driver who is looking at the rear mirror to see
what is happening behind. Such a drive won’t move forward. We know that people had
stolen money, but what we want to see is an aggressive action plan. The
Economic and Financial Crimes Commission, EFCC, and other law enforcement
agencies, don’t have the resources, capacity and the skills to fight
corruption. However, I am proud to say that there has been some strong action
plan on the path of the Buhari administration in tackling corruption. You have
said that given the statistics released by the Central Bank of Nigeria, CBN,
and the NBS, Nigeria is in depression. However, some people believe the economy
got this bad because President Buhari has no economic policy. What is your
take? What gives me the greatest concern is the unclear economic direction of
this government. I see two competing forces in the Buhari administration. I see
state control from the President and I see private sector framework from the
Vice President. A good example is the handling of the shortages of petroleum
products. Marketers were excluded Nigerian National Petroleum Corporation was
asked to solely import and distribute, and they failed. The government ran back
to the marketers who now demanded a special rate, and they got N285, the
current PPPRA template. So, I see that tension within government. One is state
enterprise and the other is private enterprise. This confusion has led to four
foreign exchange regimes. Nigeria’s forex policy is unclear and uncertain. We
have the CBN rate, the rate for fuel importers, the rate at the autonomous
markets and the rate at the “black market.” People who can access forex at the
official CBN rate would offload to the next rate. This breeds corruption from
differentials in the four markets. So, I’m going to give President Buhari’s
government below average in respect to how it has managed Nigeria’s macro,
economic issues. By macro-economic issues, I don’t mean operational activities.
You can find good policies from the Minister of Works, Housing and Power,
Babatunde Fashola, on roads and power, that is fine. But if you don’t have an
over-arching policy, there would be a problem. What do you suggest the
administration should do to take Nigerians out of the economic doldrum? I must
say that our leaders don’t read. Between 1929 and 1945, America went through
hell. First, they had Herbert Hoover who left America broke, destitute and in
great depression. Then came Franklin Roosevelt, who came in and proclaimed a
new policy called The New Deal, which is similar to ‘Change’. But in
proclaiming The New Deal, Roosevelt was sure of what direction he would take.
He allowed the private sector to do those things they do best and he embarked
on public sector programming. In four years, he turned around the American
economy because there was a clear direction. But here, there isn’t a clear
direction for now. However, I feel President Buhari is more concerned on how
not to inflict pains on Nigerians. But the way to do that is to also spend the
money in the budget. I personally believe in deregulation and liberalization,
because it’s the way forward. So, it is a policy that government has to accept.
This confusion in government’s policy, on the one hand- state enterprises – and
on the other hand, liberalization would continue to keep us in this mess, and
we may not come out of this depression. However, if government announces
complete deregulation and liberalization of the economy, by 2016 Q2, which
would end by June/July, we would begin to witness growth. If this happens, I
predict growth should return to about two per cent. With the right stimulation,
not mere N350 billion, we should witness further growth at the end of 2016.
Nigeria needs about $50 trillion to stimulate the economy. Yes, Nigeria doesn’t
have the kind of money, but Buhari and his team must seek creative ways to
source the money. Also, I have nothing against Foreign Direct Investment coming
to fix things, which is the policy the Chinese has adopted. However, for the
Buhari administration to fix the economy, I urge members of his team, like Vice
President Prof. Yemi Osinbajo, Ministers Babatunde Fashola and Kayode Fayemi,
to read the ABC of how Roosevelt fixed the American economy, in the book, “The
Coming of The New Deal,” by Arthur M. Schlesinger Jr., and also they can read
the ABC of how China was able to fix it’s economy, in the book, “China’s
Disruptors, by Edward Tse. China is a communist nation and the king of central
planning. But they decided to open the economy. Here in Nigeria, why would
government want to close the economy and fail to privatize the ports. China
involved the private sector. We have the likes of ALIBABA, Lenovo, which are
now flooding the Nigerian market. The Chinese made progress, because their
economic policy is clear. A man who wants to do business knows what he’s doing
and he’s supported by government. Again, the Chinese have settled issues like
those aspects of the economy where they feel government should control such as
the steel industry, port development among others. So, with the mix of both,
there is rapid growth and development in China. I feel the biggest problem we
face in Nigeria is not recognizing that we are in depression and not recession.
That is the first challenge. Even though, some people would come out tomorrow
and say it’s not true, the question is, what is government’s response to this?
We need to see the response so that we can turn things around. From Q4 2014 to
Q1 2016 Nigeria has been in dire economic strait. The critical nuggets to turn
things around must be put in place, because they are not in place. Confusion as
to whether we are liberalizing or regulating different aspects of our economy
is keeping investors away. The only way Nigeria can grow and sustain
development to attract 5-10 percent GDP is to have an open deregulated economy.
This will bring hardship but, with a robust social benefit agency to properly
implement welfare package in the budget, a substantial cushion can be provided.
The priority must be to diversify the economy and make it less dependent on
imports. Nigeria has long depended on crude oil as if it is the only
hydrocarbon to the utter neglect of gas. The economy heavily relies on oil
revenue and is vulnerable to price shocks in oil and the associated risk to
national stability. The most recent volatility in oil prices suggests that we
must start to diversify our revenue income streams by developing non-oil
tradable sectors. A clear strategy, model and plan for economic
diversification, both horizontally and vertically, is necessary. Horizontal
diversification should explore new opportunities in the same oil and gas
sector. There are at least 36 value added products to be explored in the
extraction of crude oil. Vertical diversification means a shift from the oil
and gas sector to other sectors: Agriculture, services, maritime,
aviation/space, manufacturing, health, sports among others. Pursuing economic
diversification will make the economy less vulnerable to the boom and burst
cycles of oil and natural gas prices. A model we can follow is the United Arab
Emirate which has successfully diversified out of oil into new revenue sources.
It is like the Boko Haram menace has fizzled out. But with the resurgence of
militancy in the Niger Delta region, several separatists group agitating for
Biafra in the South-South, and the Fulani herdsmen menace, how do you rate
Buhari on security? The administration has had flip-flops in the area of
security of lives and property. We have the herdsmen menace, the Biafran
question, and the renewed Niger Delta militancy. However, there have been
successes in containing the Boko Haram crisis. So, we need a new
counter-insecurity apparatus that can deliver results. In appraising, I must
say something has happened. But what is missing is what the Europeans realized
over 600 years ago. Without peace and stability, you can’t make progress. At
the moment, Nigeria is in low grade civil war, because there are few places you
can go, today, without thinking, is this place safe? Nigeria is in a low grade
civil war, which many Nigerians don’t realise, because they are participants.
But if one travels out and returns; from the airport, with all the conflicts
everywhere, one would describe Nigeria as a country in a low grade civil war.
In the Niger Delta, the militants have been bombing oil facilities and we are
now back to 900,000 barrels of crude oil per day. That is very serious. In this
light, I would appraise the Buhari’s government approach as rather poor. I
think it is important the government to realise that it has to put political
stability on top of its agenda. We need to re-balance the federation. We need
to include all Nigerians. The more Nigerians are excluded from the actions of
government, the more the people will feel there are special people in Abuja,
who have the magic wand to solve all the problems. So, I think the President’s
handling of political stability issues has been rather weak. Going forward,
President Buhari would need to address how to make Nigeria a place where all
Nigerians would participate. This is to ensure that little things that should
not cause problems, would not have these national consequences. When you have
peace and stability, then, you can talk about planning.
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