Prof. Soludo
It has been difficult tracking Professor Charles Chukwuma
Soludo (former Governor of the Central Bank) since his bombshells before the
general elections, but finally we tracked him down in his private library at
his residence in Abuja on Friday, 5th June, 2015. He seemed unwilling to say
much, at least for now. But it was still
vintage Soludo, and some of the issues he raised are explosive.
He sees hope and opportunities for the new Government, even
though he says his current engagements will not allow him to join the
government on a full time basis, contrary to wide speculations. He says he can
however freely offer advice to the government if needed.
Soludo says: Nigeria needs a Job Manifesto, and that solid
minerals and agriculture can’t be relied upon for job creation; Argues that a
sustainable change will not occur without a new constitution; says the clamour
for zoning and sharing of public offices is an elite power game which has
little to do with the masses and therefore misplaced; believes the argument for
local government autonomy is anti-federalism; is waiting for the action plan
from the new government before joining the debate on the agenda; says his public spat with Okonjo-Iweala was
unfortunate; raises questions about the proposal by CBN governor on selling
government equity stakes in oil for immediate revenue as well as the new NBS
data on unemployment; etc.
Excerpts:
Question: Thank you sir for granting me this audience. You
promised not to keep quiet again and to ask more questions about the running of
the economy after elections but you seem to have been very quiet since the
elections. Can you now raise the questions?
Soludo: Great to see you too! And I hope this will be a
short interview please. Two quick points: The elections have come and gone but
that was the easier part. The hard part now begins. Like most Nigerians, I am happy that Nigeria
made history with the election. On your question, No; there was no need to
raise further questions for the outgone administration. President Jonathan
raised the bar and set a new tone in his statesmanly acceptance of defeat. That
was noble. Last month, the government
admitted that they were borrowing since January to pay salaries. What more do
you want me to say? The two articles I wrote in January and February (which
Vanguard newspaper still posts on its website as ‘The Soludo Debate’) remain
living documents and raised some of the salient questions, some of which may be
bold markers for the new government. Our focus should be on the future and the
new government.
Question: How is your relationship with Dr. Ngozi
Okonjo-Iweala now?
Soludo: Why do you ask? Of course, she is and will always be
my dear elder sister and Madam; someone I deeply respect. We may not always
agree, especially on public policy. The public spat was unfortunate. She felt
she had an obligation to defend her government but she did so in a manner that
I also felt an obligation to respond in equal measure. But all that is now
history. There is nothing personal. Now without the encumbrances of government
and its pressures, I look forward to our returning to the good old days in our
personal relationship.
Question: The economy is really bad; falling oil price,
dwindling revenue, debt, inflation, unemployment, collapsed Naira, etc. Where
does President Buhari start from?
Soludo: I don’t envy
President Buhari and his team. His government will preside over the transition
to a post-oil economy, and it won’t be a tea party. If Buhari works 8 hours a
day, he last less than 7,500 hours left to bring about change in his first term
in office or less than 9,700 if he works 12 hours a day, with three substantive
annual budgets to go before the next elections. The clock is ticking already.
But the Rescue, Stabilize, and Transform (RST) Plan requires a 24 by 7
operation. There must be something in the President’s natal chart that keeps
bringing him to govern us just when things are in shambles. But I see hope; I
see opportunities. The president and his team have a historic opportunity to
create a new Nigeria without oil; a Nigeria powered by competition and
compassion. Fortuitously Nigeria’s centenary was last year, 2014. This year
marks the beginning of the next 100 years. President Buhari and the new crop of
elected officers at all levels must lay the foundation for the next Nigeria; a
re-engineered Nigeria with the structures and incentives to move from
cake-sharing or consumption to
cake-baking or production. Old thinking and ways of doing things won’t work. But an attempt to drive change from Abuja
will fail. It will be akin to trying to clap with one hand. A coordinated
national (not federal) response is required.
On your specific question as to where President Buhari
should begin, let me say that I don’t want to join the new industry in town
which is ‘agenda setting’. Everyone is grabbing the microphone to ‘set agenda’.
That’s ok. I am aware that the transition committee is working hard on an
agenda, and I believe that the committee is made up of eminent Nigerians. For
me, let us wait for them to unveil their action plan and we would have
something to comment upon or contribute to. I am aware that the African
Heritage Institution (Afriheritage) is planning a session focused on the agenda
after it is announced. So, I won’t join this fashion parade of the day. Not
yet.
Question: Let me be more specific. With the terrible
condition of the economy, and the high expectations of Nigerians on the new
government, what practical steps should Buhari take to create jobs speedily?
Soludo: I told you I do not want to discuss specifics now.
For sure, job creation should be the focus of the new post-oil economy. Nigeria
certainly needs a Job Manifesto, with a target of 8 – 12 million jobs over the
next four years. This is easier said than done. We are diversifying the economy
by-passing the manufacturing/industrial sector to the tertiary sector
(services). Creating value-adding jobs in such an economy with one of the
highest rates of urbanization in the world will task our creativity to the
limit. The agenda will require a kind of coordination between the federal and
state governments in a manner never seen before. Luckily the APC states are in
majority and I hope their party will rein them in. I have read some newspaper reports that solid
minerals sector and agriculture will be the new kids on the block to mint the
jobs. That won’t happen! At least not in the manner it is being romanticised
about. They would have very limited impacts
on job creation over the next four years, and over the long-run agricultural
transformation will actually reduce jobs. The prospects of the solid mineral
sector will depend on the policy framework and even legislation, the dynamics
of commodity prices especially given the apparent end of the commodity super
cycle, and the nature of forward and backward integration with the rest of the
industrial structure. Anyway, let us
wait for government’s agenda before we can comment, please.
Question: In your previous answer you alluded to changing the
structures of Nigeria. What should
President Buhari do with the report of the recent national conference?
Soludo: It is up to him to decide what to do with the
report. A fundamental point however is
that you can’t create the new Nigeria, a post-oil competitive economy without
fundamentally altering the existing constitution. The current constitution and
the political-governance structures created by it are designed to share and
consume the oil rent. A system designed for consumption cannot become efficient
for production. Ours is a dysfunctional unitary-federalism, with a queer fiscal
federalism and it won’t go too far. The federating units were created by the
central government; it also created the local governments. Every month, both
the governors and their local government chairmen are supposed to beseech Abuja
to collect their allocations, each supposedly with powers to do whatever they
like with the allocations. As oil stumbles, the fiscal viability of these
creations is coming into question. Suddenly, states and LGAs designed to
collect and spend oil money will be required to produce and create wealth to
survive. We will see how the old order will give rise to the new without some
creative destruction. The problem with the structure is that those who benefit
most from it are required to dismantle it— the incentives are incompatible. We
need to study the UAE (United Arab Emirates) model of competitive
federalism—that created the incentives for Dubai and other prosperous non-oil
regions to emerge. I have written a lot on this subject, and we can talk about
this the whole day. The point is that
APC cannot deliver sustainable change to Nigeria if it does not go to the
roots, and effect systemic change. Tinkering at the margins will amount to
papering over a cracked wall.
Question: That reminds me of the ongoing debate about local
government autonomy and joint account with the states. Shouldn’t the local
governments be autonomous?
Soludo: Autonomy from who? I know that it makes for our
emotional satisfaction to “deal with the state governors” and let the LGAs have
‘autonomy’— but only in the sense of getting their “allocation” directly and
unhindered by state governments but with no incentive-sanctions regime that
ties such grants to certain productivity and fiscal viability criteria. The
mistaken belief is that such autonomy will ensure that resources get to the
‘grassroots’. It is a funny argument which proceeds from the old model of
‘sharing the cake’. We must decide whether we want a federal or a unitary
system; not both at the same time. Are the states the federating units or both
states and local governments? Funny enough the same constitution gives the
state assemblies the power to create local governments and maintain oversight
over them. At the same time, the
constitution lists the LGAs created by the military as the ones to collect
“allocations” from the Federation Account.
I want to see examples of federal systems in the world where the local
governments directly receive statutory allocations from the federal government
and with statutory powers to spend as they wish without performance-based
criteria attached to such receipts. The mind-set is rooted in the past, but the
problems are unfolding in the future. When it comes to incentives and sanctions
regime for creating prosperity and accountability, our current constitution is
a funny document. It is even worse for effective macroeconomic management.
Question: The contest
is on for zoning and sharing of political offices, and there are fears of
marginalization by people from the south east and south south because of their
poor support for President Buhari and APC during the elections. How should
Buhari assuage the fears of these zones?
Soludo: You have
raised many issues at the same time. First,
given the peculiar manner the election was done in the two zones, it is
difficult to know exactly how the people voted.
There is no question that a majority of people in the two zones
preferred Jonathan but we know what happened during the Presidential-national
assembly election. Prof. Jega and INEC
did a great job but we still have a very long way to go.
Second, the Constitution of Nigeria creates an absurdity in
the name of federal character whereby a minister must come from every state.
So, states in the south east and south south must have ministers in the federal
cabinet. Third, and more substantively,
I believe that the clamour for offices is simply a power game by the elite,
which has only a symbolic or emotional significance to the masses. Yes, for
some reasons, people like to see someone that shares their interests or
attributes in government—it has a feel good factor. But if occupation of such
office has any personal benefits, it is largely to the occupant of the office
and his friends and family.
Our recent history has shown that it hardly matters where
the occupant of a particular position comes from. I am not sure how the welfare
of Ota/Ogun people changed because Obasanjo was president of Nigeria, or how
the man in the street of Katsina or Otuoke/Bayelsa prospered more than others
simply because their son became president.
The south east voted massively for ‘one of their own’ in
2011 as president, and also had
Secretary to Government, Deputy Senate president, Deputy Speaker, Minister of
Finance and coordinating minister of economy and a coterie of other
appointments. Yet, the zone had the least capital expenditure in the five year
presidency, and there is hardly any motorable federal highway in the south
east. For me, this bickering for sharing
of positions is an elite game for their personal rather than national
considerations. What the ordinary
Nigerians want are institutionalized processes to guarantee their security and
prosperity. They want services and don’t care who gives it to them. Our federal cabinet is nothing but a
miniature United Nations whereby each minister represents his or her state but
no one represents Nigeria. At this critical crisis moment, perhaps what Nigeria
needs is something akin to selecting the best 11 for our national football
team: no one cares which state or zone they come from; everyone wants Nigeria
to come home with the cup.
Question: Talking about positions in the government, there
are rumours in town, especially on social media and even in some newspapers that
you are being tipped to serve in the cabinet of the current government. Are you
likely to serve in the government or am I speaking with the prospective Finance
Minister as speculated?
Soludo: Nigerians and their rumours! I am glad you said they
are rumours and such rumours are normal. For sure, I wish the new government
success and for the sake of Nigeria, everyone must contribute to assist
President Buhari succeed. I will contribute in whatever way I can. However,
everyone can’t sit in government in order to serve: some will be there on full
time basis while others can contribute from outside. For me personally and at this point in time,
I am not disposed or available for full time public service now; perhaps in the
future it could happen, but not now. For now, my hands are full with several
other experiments I am involved with (especially abroad) in the private sector,
charity, think-tanks, and the international community. I am part of a major
initiative in Africa’s mining and solid minerals sector, and this takes me
through several African countries, etc. I am having great fun exploring totally
new vistas of opportunity that are central to Africa’s great leap in the 21st
century. I read that President Buhari will give priority to solid minerals. We
can provide free advisory services and perhaps assist to mobilize investment in
the sector or in any other areas if our advice is needed. In effect, there are
several ways we can assist the government to succeed but not necessarily to
take up full time appointment. No, not now!
Question: So, who and
who would you recommend to be part of the best 11 in the cabinet?
Soludo: There are
many eminent Nigerians who are not only bold, critical thinkers but also with
high execution capacity that the president can choose from. I wish him and his
team good luck.
Question: Do you
agree with the suggestion of the current CBN governor, Godwin Emefiele, that
Nigeria should sell off its oil stakes and retain say, 25% only?
Soludo: I won’t
comment on it in detail until I read the study. From what is reported in the
newspapers so far, I will surely have many questions and I have hinted the
Governor on this.
Question: Some CBN staff are currently being tried for
alleged fraud regarding circulation of old notes, and the EFCC says this has
been on for years – apparently more people may have been involved. Were you
able to deal with that kind of fraud when you were in charge?
Soludo: First and foremost, I can’t imagine how such a fraud
could be executed successfully given the architecture of controls and security
at the CBN. Such would require the collusion of tens of persons from different
departments and agencies, including law enforcement agencies and commercial
banks. It is very unlikely to happen without someone blowing the whistle or
leakage of information. I am particularly happy therefore that it was the CBN
that discovered the fraud and reported to the law enforcement agencies. This is
the important point.
Question: Years after leaving the CBN, give us your
assessment of the bank under your successors.
Soludo: I still
reserve my comments for now. When I was in office, I made it a policy never to
comment on my predecessors, and after I left office I also insisted on a
self-imposed five year gag order not to comment on my successor. Several times
I was under immense pressure to break it but I thank God that I kept to it. The
five year ban is now over, but it is not yet time to comment.
Question: The
National Bureau of Statistics recently came up with a revised methodology for
calculating unemployment, with the claim that unemployment now stands at about
6%. Are you as concerned as many Nigerians who believe that claim is baseless?
Soludo: Integrity of our national statistics is a very
serious issue. I don’t comment on statistics without serious scrutiny. Having not had a chance to thoroughly examine
the reviewed methodology, I will not comment on its veracity or
appropriateness. It is one thing to have a new methodology, it is yet another
to have a comprehensive, credible labour market survey. I will need information
on these two parts to make informed judgment. Already, the NBS/past government
have created the baseline data for the performance evaluation of the Buhari
administration in the areas of poverty and unemployment. According to them,
unemployment is about 6% while poverty is about 32%. If true, then the Buhari government is
challenged to beat these numbers. The government must support NBS to be
independent and do its job without interference.
Credit
Vanguard
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