Renowned economics professor,
Pat Utomi, in this interview with
TOBI AWORINDE of The Punch,
backs a former Governor of the
Central Bank of Nigeria, Prof.
Charles Soludo, who accused the
Goodluck Jonathan-led Federal
Government of plunging the
country’s economy into severe
crisis.
Utomi raises several salient issues
concerning the Nigerian economy
and proffers solutions for the
country’s political leaders to get the
populace out of an economic
logjam. It’s an interesting read,
courtesy of The Punch.
Do you think former Central
Bank of Nigeria Governor, Prof.
Charles Soludo’s argument,
depicting the Federal
Government as incompetent,
was factual?
Absolutely. There are things I want
to disagree with there, but there are
many things I agree with. And this
is really the nature of what political
campaigns should be: to raise
strong ideas that affect polity, in
terms of the quality of life of the
citizens. The truth is that there is no
one solution in this world;
perspectives on that issue can then
allow society to find a more robust
response. I do think that it is
demeaning of the democratic
process for people who are
responding, instead of looking at
the issues he has raised and
providing facts to dispute or
support, to then embark on ad
hominem and personal broad fights
against him. By making the whole
thing emotive, rather than rational,
they take away from quality
democracy and this is part of
fanning the embers of violence that
is going on in this environment.
On the general state of the
economy, I agree completely with
Soludo. The economy is inchoate as
it is. Even more importantly, I agree
with him that we have showed no
learning (desire), because what is
happening now is a complete
replica, as he suggested, of 1982.
I have, in fact, given at least five
lectures on this subject within the
last couple of months, and I said
exactly this. Thus, he was not
saying anything new. One of the
things that strikes me is that in this
age, we lack institutional memory
to the extent that we repeat so
completely mistakes of the past. If
the (Shehu) Shagari administration
(1979-1983) is blamed for not
knowing, surely that mistake
should not repeat itself later,
because we should have learnt
from it.
What are some of these
mistakes?
I’ll give you a good example. When
oil prices began to rise, we had a
visit to Nigeria by the former
Chairman of the Council of
Economic Advisers to President
Reagan, Joseph Stiglitz, who is also
a Nobel Prize-winning economist.
He gave a lecture at the Lagos
Business School, which was
attended by a significant part of the
Lagos business community. I was a
discussant at that lecture, at which
I made the point that the way we
were going about managing our
economy in the face of this oil price
rise was dangerous, unsustainable,
and showed that we had not learnt
from the past. I then suggested at
that lecture that under no
circumstance should we use more
than $40 a barrel for our budget
process.
Because the price of oil in those
days was so volatile—rising and
falling drastically—my argument
was that if oil prices rise to $70,
everything from between $40 and
$70 should go into a stabilisation
fund and not be budgeted.
Whenever oil prices fall, we have
all kinds of abandoned projects, so
I said, ‘We don’t want to continue
this kind of foolish way of doing
things.’ Using that stabilisation
fund, when oil prices fall to $10 as
in 1998, our budget would remain
funded at $40, even though oil price
is as low as $10.
The reason is that we would have
been saving $30 in the stabilisation
fund when it was $70. If it were to
then go above $70, as it did go to
$130 and more, my proposition was
that everything above that should
go into a future fund and that this
fund can be invested abroad so that
future dividends will flow in or in
long-term infrastructure because all
the children that will be born in
Nigeria even 500 years from now
have the same right as us to the oil
that is put in the ground by God for
all of us. Unless some of that
money is being used for
infrastructure, which they (unborn
Nigerians) can use in their time,
then we have cheated them out of
their own heritage.
Have you made these
recommendations to
government?
The Minister of Finance, Dr. Ngozi
Okonjo-Iweala, was present at the
lecture, and she made her remarks
when I finished. She said she
agreed with me, but that even the
small excess crude that they were
struggling to release, the politicians
were fighting against it; that even
after warning them to save for a
rainy day, the politicians kept
saying, ‘Look, it is already raining
torrents.’ I then said to those sitting
with me, ‘We are missing the point.
We have a duty to educate and
teach these politicians. In ignorance
and greed, they want to share
everything immediately and cite as
their basis the constitution that
says it can be s hared.’
We should educate them that when
you have these kinds of funds, it
does not take away the share of
any state government, because
they will own their exact proportion
of that fund and the management
of the fund will be made up of
people that will ensure that their
portion is not abused. I also further
said there that many of our
technocrats that are going into
government are missing an
important point: the power of
resignation, to send a message to
politicians. I began to give the
example of Malaysia. Malaysia
would not be what it is today if one
young technical medical doctor in
government called Mahathir
Mohammed did not see something
wrong in the prime minister’s
policy, which was then referred to
as the give-and-take policy.
When he complained about it, he
was not only thrown out of the
government, he was expelled from
the ruling party and he went to
write a book titled ‘The Malay
Dilemma’. His book literally
generated uprisings in Malaysia and
the prime minister had to resign.
Eventually, he was reabsorbed into
the party, became the prime
minister and the story of Malaysia
changed permanently. Malaysia,
which was once worse than us, is
now far better.
Why are our technocrats in
government not realising this
power of resignation to mobilise
the public to learn the right thing
and to force politicians who are
adventurers to behave
appropriately? This happened at the
LBS. Half of Lagos’ elite business
people were there. It is not a secret.
All the things I predicted would
happen have since happened. So,
why should people attack Soludo
for saying that it is like 1982? I
have said this many times.
Are you saying that Okonjo-
Iweala, Fani-Kayode and others
in the Federal Government are
in denial with their outright
rejection of Soludo’s
argument?
What do you expect? Some friends
and I used to have a gathering
around the late Dr. Stanley
Macebuh in his house and Patrick
Dele Cole would be drinking good
brandy and be laughing at me for
drinking Fanta. I would raise an
issue about government and public
office holders, and they would
reply, ‘If na you nko?’ That’s my
question to you: What do you
expect them to do?
Soludo scored the Federal
Government an F on economy.
What is your assessment of
this government?
I don’t want us to get into emotive
discussions. I don’t think the
management of this economy by
this administration is worthy of
praise. I believe there is a complete
misunderstanding. Because they
are not sensitive to people, there is
something that has developed in
Nigeria; I call it the new
mercantilism. One of the biggest
mistakes this President has ever
made is to suggest that the
ownership of private jets is an
indicator of Nigeria’s progress. It is
a terrible thing. I was praying hard
after he said it the first time that he
should realise he made a mistake;
but he repeated it several times
during the World Economic Forum
and I was so embarrassed. I said,
‘Oh my goodness, we need help.’
That has been their orientation,
they have not noticed that the
Nigerian people are actually (poor).
The dynamic question during
elections in the US is: Are you
better off than you were four years
ago? Forget the statistics that
anybody may throw at you,
because as they say about
statistics, there are three things:
lies, damn lies and statistics.
Anybody can generate statistics to
look good. The simple question to
the individual citizen is: Is your life
better today than it was when these
sets of policies were put in place?
My submission to you is that, as an
individual, I am worse off today
than I was four years ago. And I
think most Nigerians who examine
their consciences would say they
are worse off today than they were
four years ago. Forget about grades
of A or F.
How do the issues you raised
about economic
mismanagement affect the
electorate and the masses?
They are doing Nigerians a
disservice by preventing the people
from discussing the issues and
learning, with this emotive abuse of
anybody whose view does not
eulogise them. The numbers are
there. Soludo points to the Nigerian
Bureau of Statistics’ poverty
incidence figures. There is this
nonsense going around now; I think
it was (Femi) Fani-Kayode that said
Nigeria was given an award of the
biggest economy in Africa, as if it
as an award that is being bestowed
on them.
The size of an economy is a
function of the number of the
people in the economy and the
productivity of those people, that
is, output. If there is a huge
population like Nigeria, and the
people are producing seriously, it is
only logical that the size of the
economy of Nigeria should be
bigger than the economy of South
Africa, which is producing more per
person with a much fewer number
of people. But because there are
more of us, our general output will
be bigger than South Africa’s. So,
what is the big deal about it? It is
simply ignorance that is making
people celebrate what they don’t
know. I heard President Goodluck
Jonathan two days ago (Tuesday)
saying, ‘Is there anybody in Nigeria
who understands economy better
than the people at the World Bank
and the International Monetary
Fund?’
It is disgraceful for the president of
a country to speak like that. He
should be the first person to be
proud to say his people are better
than any other, even if they are not.
But in this case, many of our people
have worked in the World Bank,
and we know that the boys in those
places were not half as smart as us
in class. So, why should the
President make that kind of
statement?
How then should Jonathan have
responded to his critics?
In 1997, during the Asian financial
crisis, I was on a study tour at the
Central Bank of Malaysia, Bank
Negara Malaysia. During my trip, I
learnt that Prime Minister
Mohammed refused to follow the
IMF’s suggestions on what Asian
countries should do. Indonesia
chose to and Malaysia was the first
to escape the financial crisis and
begin to run as it did. The IMF was
humble enough to admit that
Malaysia made a better choice than
they had advised Indonesia. I wish
the young lady at Bank Negara,
who was my tour guide, was there
to hear our President’s statement;
she would fall over and laugh to
death. There are some things we
should educate our politicians
about. The problem with our politics
is that we have refused to use it to
learn.
Again, I had the privilege of being
an intern as a graduate student in
the Washington DC, United States.
One of the things I learnt on Capitol
Hill with the Indiana delegation to
the US Congress—which at the time
included people like Dan Quayle,
who would later become Vice-
President under George Bush Sr.—
was that the average senator in the
US, who had never studied banking
in his life, after serving for four
years in the banking sub-
committee of the (legislature),
would probably be as
knowledgeable as a professor of
banking, because they do serious
work. But our politicians have
refused to discipline themselves to
understand that it is about serious
work. They think it is about
motorcades. So, we talk carelessly
because we are uninformed and it
is hurting our country.
President Jonathan says he has
reduced poverty by 50 per cent,
but Soludo argues that it has
actually increased by 71 per
cent and unemployment, 24 per
cent. What are the facts about
unemployment and poverty in
Nigeria?
Based on a report released by
Legatum, Nigeria is considered one
of the most miserable places to be
born on earth. Basically, it is even
better to be born in some ragtag
African country than to be born in
Nigeria because of the quality of
life—people dying at childbirth and
so on. Look at the Human
Development Index, which Soludo
also quoted. I was asked to review
the HDI a couple of years ago and if
you isolated Borno State from
Nigeria that year, it would be the
poorest country in the world. So,
there are many of those dynamics
that we’re challenged by and it is
one of the imperatives that
politicians should go to town
debating in detail—issues of
poverty, incidence of poverty, why
people are poor, etc.
One of the things I disagree with
Soludo on very strongly is where he
said, ‘Where is the money? Oil
prices have fallen, so where does
the All Progressives Congress or
even the current government hope
to find the resources to do all these
things they are saying they will
do?’
My reply to that is that today, all of
us talk about Singapore. When, in
1965, Singapore’s only resource,
which was oil, was what the British
Navy was paying as rent for using
Singapore’s natural seaport as a
deep-sea terminal, the British made
a decision, as part of the
reorganisation of the Navy after
World War II, to close down all their
naval bases east of Eden. That
meant closing the naval base in
Singapore. So, the country was in
the middle of its greatest adversity.
It posited that the only way it could
survive was by being attached to
their neighbours in the North:
Malaysia. The federation of
Singapore and Malaysia was seen
as its way out. But the leaders of
Malaysia—primarily because of fear
of the Singaporean Prime Minister,
Lee Kuan Yew—decided to eject
Singapore from the federation.
For Singapore, it was like ‘We have
nowhere to go. This is the end of
the world for us.’ Well, they rolled
up their sleeves, chose to be
creative, and 30 years later, that
young rascal called Yew wrote a
book called From Third World to
First: The Singapore Story. They
had, in one generation, gone from a
country that had no resources at all
to becoming the largest
concentration of billionaires in the
world on that small island. Thus, it
is not about how much revenue you
are getting. In fact, the revenue can
be the problem.
Too much revenue can make a
nation do foolish things, like it has
made us do. I consider this moment
in Nigeria, with oil prices crashing,
as an opportunity and not a threat.
All we need is serious-minded
people who can sit down and
construct a government that will be
inclusive of all, because, as
someone said, it is better for
everybody to be inside fishing out,
than to be outside fishing in. These
people should be dedicated to an
elevated immortality in terms of
how history remembers them, not
people who are looking for big bank
accounts. Nigeria can, in the next
10 years, be the envy of all, with
the low oil prices of today.
What are the opportunities
peculiar to Nigeria, which you
think the next government can
take advantage of?
First of all, we’ve got to forget this
business of waiting for oil
revenues. They should take a low
threshold of oil prices as our first
savings to drive things forward.
They should also take the many
other factor endowments Nigeria
has—sesame seeds, rubber, gum
Arabic, mineral resources, and the
like—and determine which six or
seven of them in different
geographic locations around our
country we can develop to become
the best or leading producers in
terms of their entire value chain all
over the world.
Then they should educate our
people to the best level to be able
to develop those products and go to
work. Nigeria will emerge an
economy so strong that it will make
the rising of the Rhine Valley in
Germany seem like child’s play.
Source – www.ekekeee.com

may the Lord bless you with your unbiased analysis of the economy.
IMF prediction of the Economy are subjected to revised base on the practical and pragmatic observations of the Economy as the time unfold.
It is a shame on our economy managers trying to hide their failure behind foreign analysis of our economy forgetting you can't stay outside and predict precisely unlike me within house. moreover, the same IMF had to revisit China economic growth severally in 2012/2013 after they realised their forecast error.
In addition, after the 1914 economy turmoil the Roosevelt government had to sack some government official for failing to predict accurately of the impending economic crisis. NOI should stop deceiving herself with all those fake analysis

I have never really trusted NOI as the head of Nigeria's economic decision making team. After reading how she used to cook for Biafran soldiers, I knew that she was more of somebody that followed orders rather than made them and even if she made decisions it was for the benefit of the people she served.

They won't still believe that man is clueless.
Abi professor Utomi is an APC member ni?
Corruption is not stealing. SMH


#CHANGE
#IHAVEDECIDED

You cannot study ZOOLOGY, and behave like an ECONOMIST.It's a sure bet that a carpenter would perform better than GEJ.

Me sef shame for am

Could the authorities that be on Nairaland see to it that this thread be put on frontpage and be made a STICKY THREAD for a week? I ask this favor so that the morons that most of us are can read and be enlightened instead of being forcefed with balderdash all year around about APC and PDP nonsense wey no dey add any iota of intelligence to our collective IQ.....

So, Again....abeg.... Oga Moderators... Please do the needful bikonu!

Ps,,, we'll also need more threads like these and less of inter-partisan nonsense. Help educate the youth of naija on nairaland cos im beginning to think thoat our brain cells are rotting away at a terrifying rate

may God Bless us all.

Thanks.

Every Nigerian is ashamed of the clueless one

my God.

Gej is a shameless semi-illiterate.

WHICH ONE BE EKEKEE.COM AGAIN? EKEKEE.COM YOU WANT ME TO BELIEVE YOU?

Cluelessness kills spreads faster than ebola

.

And that's the president of the Federal Republic of Nigeria, voted into office by using nepotism, tribalism and religious sentiment.

This is why GEJ and his cohorts must be driven away from Arsehole Rock!.