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WHY BUHARI CAN’T GROW ECONOMY -Tope Fasua, economist, ex-presidential candidate

Tope Fasua is a businessman, economist, writer and the 2019 presidential candidate of Abundant Nigeria Renewal Party. He spoke with AKANI ALAKA on the recent controversies on the management of the Nigerian economy by President Muhammadu Buhari’s administration, the worsening state of the naira, the high inflation rate and the urgent need for increased productivity to salvage the economy among other issues.


What’s your reaction to all these controversies about printing or not printing N60 billion to support FAAC allocation to states between Governor Godwin Obaseki, the CBN and the Ministry of Finance?

It’s not a needed controversy, though it is a pointer to some other bigger issues on ground. The governor is right to call attention to the fact that the economy is not doing well, revenue is not doing well and the Federal Government has to resort to some, if you like, unorthodox financing means to get revenue, including ways and means finance by the Central Bank. He is right. We should all be reminded that that is what is going on now and that should guide our attitude, how we spend money, even the way we operate the government. However, we should remember that it is not particularly unusual for the Central Bank to assist the Federal Government but there is a certain limit they can work to give overdraft to government. Now, why will the Central Bank give overdraft to government? It’s when the Federal Government has probably spent all its liquidity with the Central Bank and every statutory avenue has been exhausted, then, the Central Bank can avail the Federal Government some amounts. However, pertaining to FAAC, FAAC is the distribution of money collected in any given month by the Federal Inland Revenue Service, the DPR and the Customs. Usually, the NNPC does not even remit every month. NNPC is a much more controversial organization. But these three organisations – FIRS, DPR of recent, and Customs they collect every month. And what is happening is that after they collect, the next month they share – at the end of every month, they share, so it is collect and share. So, when you are sharing those monies to states and local governments, you can only share what has been collected. So, if those three organisations say we collect N3 billion last month, that’s what you can share.  So, it is assumed that as they remitted funds into the account, the OAGF (Office of the Accountant General of the Federation) has an idea of what they remitted and it will, therefore, be very odd to say that they can’t pay the states except they borrow form CBN. It must be an accounting issue in which the Federal Government may have spent some of the monies they should have remitted to the states. So, maybe after the FAAC meeting, the Federal Government cannot instruct the Central Bank to credit the state government immediately because the money wasn’t there at that point in time. But that will be a very much more technical issue. You have dichotomise that from Federal Government’s overdraft. It is a different ball game if you say there is N500 billion available to be shared and it is shared – the Federal Government takes its own, the states take their own and when it is time for you to remit to the states, ‘you say ah, we don’t have the money.’ It must be that you have finished spending your own as the Federal Government and dipped hands into the funds belonging to the states in which case you will now say ‘what can we do?’ But the way it has been presented, it is not a case of the Federal Government asking the Central Bank to print cash and load it in bullion van for people to take their states. That was not what Obaseki meant. What Obaseki meant was that the Federal Government’s finances are under pressure and the Federal Government is having to borrow money from the Central Bank in order to pay the states.

But given the fact that President Buhari has been known to give funds to states under the guise of various forms of support…

I will not deceive you; the Buhari government is unfortunately not very straightforward. The Buhari government, since it came, has been doing many unorthodox and unprofessional things, trying to worm its way into the hearts of the state governors. Mr Buhari, the moment he was elected became inimical to the interest of the people of this country, but he has been very friendly with politicians. At every meeting they have, you will see him grinning from ear to ear with politicians and backslapping. But every time they asked him to talk to the people of this country, he will frown, he will talk as if he is talking to nonentities. He has put the people of this country through much stress. I don’t have much respect for him, unfortunately. Buhari has given so many overdrafts to the states, many of which are not being paid back. The Central Bank Governor, Godwin Emefiele did say that now that the states are dragging them, they will now ensure that the loans that the states were given in 2015 are paid back. I asked myself, should the loans not be paid back ordinarily? Should it depend on sentiments or whatever? Is it until an Obaseki begins to talk about Central Bank in a certain way before the CBN governor will now say, ‘Okay, we are going to collect our money back? Is the CBN governor a Father Christmas that is giving all these people money?  In essence, that is what he is also saying. Even up to the one that you called Paris Club Refund – that was a very fraudulent refund. I wrote about it, and now they are fighting themselves over consultancy fees. There is nothing to consult in that thing. The states said there were deductions in their accounts. Okay, Nigeria wants to pay back a loan to Paris Club in 2006, we had to task ourselves to pay back the loan. It’s a sovereign issue. Why should the state governments be billing the Federal Government for doing the right thing? Did we not all benefit from the refund of the loan? But you see some of the consultants that these states got – people like Ned Nwoko and all that- they went and painted a picture that the Paris Club gave us some money back. Ned Nwoko gave an interview that foreign governments sent secret agents after him because they were asking about Paris Club loan. Paris Club refunds that Mr Buhari gave the governors has nothing to do with Paris Club. It was just a case of these people saying that the Federal Government owes them for deducting from their money in order to pay the Paris Club back or in order to service the loan for a period of time. Obasanjo, Yar’Adua, Jonathan refused to pay them, but Buhari paid them. What has become of all of those refunds? Mr Buhari does not care that some of these state governors have pocketed the money. Some of them are building hotels and all that. It is so unfortunate what is happening. Buhari has been giving loans and all sorts of things, but he does not even have the capacity, neither does he have the desire to even follow up and know if the states are using the money for what they said they would use it for. Some of the states have collected those loans, grants and all that and they still owe salaries. Kano State said last week that it cannot pay the minimum wage anymore. And many of the states owe salaries of six months. Ondo State owes salaries of six-seven months now. Many of them are owing salaries, even, the old N18,000, they cannot pay as minimum wage. It’s a shame on all of them, especially, the president who has disappointed the people of this country.

In response to the Federal Government’s denial that it printed money to support FAAC allocations, Obaseki accuses the Federal Government of involvement in fiscal rascality. Do you agree with him?

I probably will not use that exact word. I have situated the issue exactly how I want to situate it – at the doorstep of the president who has been mean and selfish, who has just returned from another junket abroad to come and tell Nigerians that all they should expect is continuity. On his watch, life has become difficult for the people of this country. He supervised the crash of the naira from N199 officially to N430 to a dollar today. Perhaps, it would be a lot more before he leaves. I am not interested in what Obaseki said about fiscal rascality or whatever rascality he is talking about. But the fish starts to rot from the head. Nigeria has deteriorated from the head through Buhari who found his way into government when he knows that he lacks the capacity to rectify the country’s economy and improve the lot of the people. I’m actually not interested in who is doing what including the finance minister who is still talking about debt to GDP when everybody is talking about debt to revenue ratio. The former CBN deputy governor, even the DMO is saying that we have over-borrowed but this woman,  Zainab (Ahmed) – I don’t know where they bring all these people from – is still talking of debt to GDP. She is sounding like a broken record, saying the same thing to herself over and over, convincing herself that what she is saying is the truth. But when they leave those places, they will now get their epiphany and now begin to recant – I don’t know if it’s a cult that they belong to – when they get to those positions, they throw the whole country under the bus. It’s quite unfortunate.

Many have said the way we are borrowing is unsustainable…

DMO (Debt Management Office) has said the debt is unsustainable. Patience Oniha, the DG of DMO said the debt is unsustainable. In fact, the moment Abraham Nwankwo left there, he started saying things like the debts were unsustainable. These are people that when they are there, they will never say the truth. The loyalty should be to Nigeria, not to any president. These people who have been ‘serving’ this country have actually been destroying the country. But for once, I have heard Patient Oniha, the current DG, saying that the debts are unsustainable. She worked under the Ministry of Finance, but the minister of finance believes otherwise. She continues to run Nigeria into the abyss with her voodoo policies. I don’t know what qualifications she even has to be in that position. Patience Oniha has said even the borrowing under Sukuk is not paying for itself, that instead of the projects they used the money borrowed under Sukuk to pay back, the Federal Government is having to look for money to pay back. Why did they not think about the Sukuk projects paying themselves back in the first place? So, it is highly unfortunate. But it will get to a moment where everything will jam up and we are unable to progress anymore. By then, everybody will sort themselves out. We are not afraid anymore really. I used to be afraid of what will happen, but I am no longer afraid. When it bursts, let it burst. And anyone that will remain, will remain, it is the fate that we have chosen as a people.

Do you agree with some who have said we might end up like Zimbabwe because of the way our naira is being devalued?

Anything can happen. The point is that Buhari will come and tell you that he is not going to devalue the naira and then, he will devalue the naira. From 2015 when he came, look at where we are today in terms of naira to dollar exchange rate? And there is nothing to anchor the naira on. The kind of productivity, the kind of profound and radical economic policies that he could have brought in and utilize in order to salvage this currency, he did not use them, when he could. And even, pre-COVID, I begged, I cried, do whatever I could, I spoke, I was on television everywhere to bring attention to the fact that there is a way we need to be going right now if we want to avert this danger. But we didn’t do that. We didn’t have an idea, a clue on what to do to increase productivity in this country. So, if you are not productive, you cannot add value to whatever you do, you cannot achieve economic complexity, how can you then defend the naira? What we are starring at right now is a scenario of ‘do we need a currency or do we not?’  It is looking like we don’t need a currency – probably we will join those countries that don’t need a currency of their own because there is no economy to back this currency with. That’s the truth. So, anything can happen, we can be in a free fall, especially as we are under a government where people like Osinbajo listen to all these voodoo economists in the banking sector and elsewhere who will continue to push Nigeria to totally deregulate the naira and let it ‘find its level’ in the market place. But the thing is that there is no level to be found – the level is in the gutter. The moment the Central Bank leaves that naira to go and find its level, the naira will end up in the gutter. And then, we will find ourselves in Zimbabwe or worse. That’s the truth now. The kind of productivity that we need,  the profundity of policies that we need, none of these people are ready to do them, and I am afraid that we have even lost the opportunity to do that.

Are we really ready to increase productivity with the challenges of power and other infrastructure confronting us?

You have to build your infrastructure. The idea about boosting productivity is about boosting internal capacity to do things. People like Professor Ricardo Hausman in Harvard University and co, the few of them who tell the truth, we will never go to them. Nigeria will continue to go to those who will come in and tell you rubbish and tell you to put your country in trouble. Some of them will tell you to create AMCON number 2 to soak all the bad debts that their friends in banking have racked up so that you can clean the books of the banks and let them go and sin no more – all sorts of useless ideas and useless policies that we are experimenting with in this country. Talking about building capacity, before COVID, I used to say that the Nigerian economy should grow by 15 per cent, but people like Oby Ezekwesili will say to me that if Nigeria can grow by six, eight per cent, that is alright, that I am selling Nigeria Kool-Aid, that is what she will say. She will say ‘Tope, don’t sell Nigeria Kool-Aid.’ What are you talking about? Because you worked in World Bank, you think you know it all? All of these World Bank people, including Okonjo-Iweala, cannot think outside the box. They have refused to allow Nigeria to think outside the box. Will international trade work for us? What are we selling? We are selling primary products. If we sell one thousand times the primary products – including crude oil – we are selling now, we will still not get out of where we are today. We are selling primary products; we are using secondary and tertiary products. So, there is actually no way out in the current strategy. It’s about increasing productivity. If you look at it from the productivity angle, what we are just saying is that yourself, myself, everybody can be 15 per cent more productive year on year. We can earn 15 per cent more than we earned last year; that’s what we are saying, that is what is meant by growing the economy by 15 per cent more. All our companies should do 15 per cent more activities and declare 15 per cent more profit than they did last year, then, we would have achieved 15 per cent growth. All of those who sit in public service doing nothing, we should actually be able to benchmark what they are doing, how are they making life easy for people who are doing business? That’s their business as regulators. Then, we would be 15 per cent more productive. It is about building internal capacity. There is no big deal there. People are saying the electricity is not there. But we have to create the electricity ourselves. Young boys of 13 and 14 are creating big things abroad. Electricity is not a big deal, it has ceased to be a big deal for a long time, but we are still going to look for Siemens, General Electric, begging them to come and do it for us. But it is the job that our youths should be doing. Those youths that are in the universities are the ones that should be creating and generating electricity for our villages, so that the government can now focus on the factories, the cities and so on. What’s the big deal in generating electricity? There is no big deal, but as long as all these old people who have found themselves in government and want to continue sitting there forever, there will be no change. They are so afraid to allow the youths to take the reins of the future of this country. Let them hold their politics. But they cannot continue to hold the youths back in terms of giving them the opportunity- challenging the youths to perform those experiments that need to be performed in order to ensure that this country breaks the barrier of all these problems. The infrastructure we don’t have, we can create ourselves and I believe that the youths of this country can do it. There are so many new areas the youths can train themselves in. On YouTube, they can train themselves to do anything – free. And the electricity we are talking about will become less of a big deal tomorrow. The infrastructure, the youths can get involved – I have said all the universities, the polytechnics, the civil engineering departments should be the one patching those roads before they become a big deal. But they will not allow that. The governors want the roads to become craters so that they can issue N10 billion, N100 billion- whatever trillion contracts- they are evil-minded, all of them. What’s in FERMA? If I have my way tomorrow, I will close down FERMA. The university students should do it. Tell the big construction firms to go and mentor them on how to use the equipment in exchange for getting bigger contracts. We cannot be having Julius Berger doing Kaura Namoda, this and that road, all of those things. The last FEC meeting, they were talking about University of Ibadan library. And I’m wondering why should the University of Ibadan library be featuring in the FEC meeting? That should be a meeting that should talk about only foreign relations, what we want to do with nuclear energy and so on. Why should the executive of the United States sit down in their meeting and be talking about University of South Carolina? As long as they have a governing board there, it is not something that they should be talking about an FEC meeting – UI library? These people are small thinkers. They should clear out and let young people take over, that’s my view.

I don’t know if you have seen the recent report of the internally generated revenue by the states released by the National Bureau of Statistics?  

I have sighted it. I have not looked at it in details, but I think I generally know what this thing usually contains. I know it is only Lagos State that generally manages to generate up to four times the FAAC that it gets and almost all the states are not sustainable. People are complaining about Twitter going to Ghana and this one going to this place and that place and somebody did a report about where all these international companies are located. A lot of them are in Kenya. But one thing I want us to know is that they are not coming here because we are not organized. As I am talking to you, I am looking at Eko Atlantic; there is only one structure there that is functional now. There is another tower that is being completed. Apart from those two, nothing is going on in Eko Atlantic and that just tells you that Nigeria is not growing. Why are we building Eko Atlantic for 20 years? Why did Fashola start Lagos metro rail for 16 years and they can’t finish it 16 years down the line? It is because we are not growing. The kind of urgency that we need to have, we don’t have it. Nobody is coming here because we are not organized. The leaders lead our people anyhow. They don’t know that human beings are like water, you channel them. People are scared of coming here to invest and unfortunately, even our local capital heads abroad. The reason why Eko Atlantic is still like this is that even we don’t invest here. Otherwise, the kind of IGR we are talking about is not what we should be talking about. Each of those IGRs, we should multiply all of them by five. Someone did an analysis, which is something that I have also done a long time ago on the same IGR, and revealed that what they budget for education in South Africa is like our entire budget for everything every year.  Our entire budget for 200 million people – for education, security, agriculture roads, health and all of that is what they budget for just education in South Africa every year. Even, the blacks in South Africa, no matter how backward they are, with time, they will catch up with this country. If you look at them now, you will see that they are better fed than we are. So, it is highly unfortunate, those IGRs are nothing to speak about. We should challenge ourselves and throw it back on our faces, let’s us get more organized as a people, as human beings, as a race. Let’s get organized. Let’s look in the mirror and tell ourselves the truth. We haven’t done well and we should try and organize ourselves so that we can get respect from others. And we can just do copy and paste, we can’t reinvent the wheel; everything that we want to achieve in this country has been achieved elsewhere, so let’s do copy and paste.

Some analysts like you have spoken about the need to cut the cost of governance and if you look what Malam Nasir El-Rufai is doing in Kaduna now – he wants to sack a very big percentage of the state workforce. Is that the way other states should also go?

There is no need for El-Rufai to sack anybody if he is a serious human being. He knows how to achieve a couple of things, but innately, he has an evil streak. Even as the Minister of FCT, he took delight in displacing people. As at the time he was there in 2005, Nigeria has 500,000 displaced human beings, the second highest in the world then as a result of his action. He used to say then that if you are earning less than N50,000, Abuja is not for you, go back to your village. And I was asking him then in my column in Sunday Trust – how many of his own staff is he paying N50,000? All these big men, they get to Abuja, they forget where they are coming from, Abuja suddenly becomes their father’s land and a land for the rich. I was telling you about Eko Atlantic. I am looking at the tower right now as I am talking to you. When they started this idea about 15 years ago, they said it will be a billionaires’ paradise, that if you are not a billionaire, you cannot live inside the place. But unfortunately, it has failed, at least for now. So, why will they be doing all these elitist programmes? You don’t need to sack all those people. If you are a graduate and you went to university, Kaduna needs a lot of teachers. They should send them to social services, tell them to go and be packing any children they see on the streets. Abroad, there is a huge social service industry. Many people are employed in the social services department – they will give them three to five children – you make sure you feed those children every day, make sure that they go to school, make sure that they sleep well, make sure that they don’t do drugs – that is how they plan societies. Those are social workers. Do they have social workers in Kaduna? No, they don’t. Do they think they need it? They didn’t think they need it. What plans did they have for the almajiri children walking round the places? And you say there is no work, but you sack the ones that have jobs and put them on the streets. There is work to be done. How clean is Kaduna State? Forget about the Kaduna metropolis – what about other places, the Kafanchan of this world and so on? Are we saying those places cannot become modern cities with modern infrastructure that works? There is no public service in this country that there is no work for. There is a lot of work to be done in provision of public goods – education, social services, environmental sector, security, mass mobilization. How many staff does El-Rufai have to go to those villages every day to do these things? All we hear is that they have killed so, so number of people in Southern Kaduna. But is anybody studying these things? How many people are going from Kaduna State government office to those areas? So, they still don’t understand governance. They are just kicking around unfortunately.

The latest figures by the NBS indicate that inflation is at all times high in the country and many people are already struggling to even eat. How can we tackle this problem?

That inflation is multi-dimensional – It is coming from the supply side because even people who produce within the country are seeing higher prices and so, they have to mark up their prices – whatever is it that they produce here. Then, there is also the fact that Nigeria is an import-dependent country, and so, there is what we call imported inflation – meaning that if there is inflation abroad, everything that you import also comes at a higher cost. And apart from that,  the devaluation of the currency means that those who import things from abroad using dollars have to also mark their prices up. So the prices will go up almost 100 per cent with the devaluation of the naira. So, you can see that inflation is coming from several angles. That will now tell you what to do. But ordinarily speaking, I will usually say for the Nigerian economy, the stage in which we found ourselves now, we should be in high inflation, high growth phase. High GDP growth and high inflation because there will be so many activities in the country and everybody has something to do and all that. It means you are paying people so much salary and the salary is constant. If there is so much liquidity in the system, so much activity in the system and more people are being paid, that means that companies have the impetus to expand, get into business and try to fulfil the needs of all of those people. But unfortunately, what we have seen is high inflation and zero growth. Nigeria just managed to get out of recession with 0.1 per cent GDP growth. That was the last we heard. The government will use COVID to try and create excuses, but the point is that before COVID, we were not growing as well – we are growing at 2 per cent, 2.5 per cent and we were dancing that we are doing something spectacular. And then, COVID now came and compounded the problem for us. We are actually underachieving to a large extent and that is not good enough. Now, there is also an inflation that comes from the demand side – meaning that all these interventions that the Federal Government is giving people – the money will be spent, but people have not done anything to deserve the payments. But unfortunately we find ourselves in a scenario in which countries now have to spend and spend to find their ways out of economic problems. Nigeria is, of course, one of those countries where they will not even benchmark those spending properly and politicians will hijack a lot of those spendings and they have already done that. Looking at all of that, what we should be doing is trying to reduce the inflation and increase growth at the same time. In order to increase growth, you have to focus on productivity and I will say that the best way to increase productivity is to increase the production of public goods. I think that is where we should start from. We have to keep organizing ourselves. When we organize ourselves, we create millions of jobs for ourselves and we own our country, unlike now when everybody is pulling in different directions – there are those who want to scatter the country, the ones that want to start civil war. Everybody is just pulling in different ways because the leadership too is useless and cannot even commandeer the minds of the people in a positive way because many of the leaders themselves are tribalists, religionists and extremists of different types. So, if you are pulling in different directions, this is what you get. If we are going in one direction, thinking of easing inflation and increasing productivity, we should start by organizing our public services properly. The economies of places like Kenya, Uganda, Rwanda are running 24 hours. We are not talking about going to clubs alone. If you go to Kenya, some shops are open for 24 hours, filling stations that are open 24 hours. That’s how they run economies –go to Europe you will see factories that are open 24 hours, as some people are closing, others are resuming. Here because of insecurity, 6, 7 o’clock, businesses are closed. Then, it became a case of night clubs and all those immoralities you see at night – it is just absolute rubbish and it is because of lack of vision on the part of the people that we have put in power in this country.