August 02, 2016

DETAILS | How Greedy Elite Killed Our Economy

Minister of Agriculture and Rural Development, Audu Ogbe, after a historical review of the nation’s economy blamed the current hardship on economists and some greedy elite. ‎How did it happen?

The minister spoke with a group of journalists in Abuja.

President Buhari administration came with a promise to better our lives. But a year into office Nigerians are grappling with harsh economy more than ever before. As a cabinet member of this administration, what is your perspective on the economic state of the country?

The challenges we are grappling with today started in 1986 and forced Africa into what they called Structural Adjustment Programme (SAP). I am not an economist but I remember shouting out loud and clear that this was the beginning of Nigeria’s journey to disaster.

I was in Hong Kong with Senator Godwin Okpe, the day they began the auctioning of the dollar. It was N3 to $1 the first day. We phoned home and spoke to the then Head of Service of the Federation, Abu Obe, and he told us that the auction was N3 to $1; and I said to Godwin Okpe, ‘this is the beginning of the journey to disaster.’

Even when I was party chairman in 2003, I addressed the party then in Ogun State and I said we were practicing “ill-digested” economic theories. The then President (Obasanjo) and other members were not happy that I should make such a comment as Peoples Democratic Party (PDP) National Chairman, but I knew what I was saying because economics is 90 per cent common sense.

If we were going to devalue our currency, it could have taken a 10, 15 per cent devaluation and fixed it there like Malaysia did; Malaysia said to them, ‘take it or leave’. Instead, we chose to auction the dollar every week for 30 years. Nobody does that; I don’t know where any of them, the brilliant defenders of SAP copied that thing from, but they would tell you that they went to the World Bank and all that.

If you don’t know colonial history, you will never be a successful economist in Africa; you need to know the background to what they force you to do. If you don’t know history, I don’t care about how many PhDs you have from Harvard University or Oxford, you will not understand the complexity of economic policy as it is dictated to us.

On top of that, we came under globalization and free trade, and we were told, ‘open your doors and windows to import’; we even removed our roofs; everything coming in. Today, I think some interests have even taken Nigeria hostage. We can’t produce now because over and above this whole thing, interest rates in this country have remained averagely 25 to 28 per cent for 30 years. So, you can’t borrow to fund agriculture, build industries or do anything because it is impossible to take a loan. Meanwhile, they keep telling us that we are growing at 7 per cent all on the back of figures from all oil and gas. We could see it but they kept telling us that there was no alternative.

So, the point I want to make now is that whichever government was in power today, whether it was Jonathan who continued or Buhari as he is now, was bound to face the problem we are facing, especially because oil and gas stopped flowing. So, people are poor and unhappy, we know. But there is simply nothing anybody can do except to go through a slow process to recover from the disaster of 30 years of error. 

And I want to challenge any economist to a debate on the issue; what some of us said long time ago was, ‘cut down on imports’, use duty to stop people from bringing in champagne, red wine and all sorts of luxuries, jets; things that we don’t need but which we delighted in buying and dumping on our country instead of using effort to grow the local economy to increase manufacturing; bring machinery to support agriculture, we did nothing. 

So, today we have crashed. And Nigerians are very angry and we are sad. People have to steal a pot of soup now or drop a baby to carry gari; it’s a very terrible thing to happen. But I am asking anyone of them that which government in Nigeria would have been in a different position from what we are in now? In fact, it could have been worse but for the fact that Buhari is tightening the situation to cut down on the waste.

Now, compare us to Venezuela today, where there is nothing in the shops; people cross the bridge to Columbia to go shopping. Venezuela was richer than Nigeria; a very powerful oil economy

So, this is the problem. Economists and very greedy elite who see only their comfort when they see an economic policy; many of those who kept defending SAP were people who had plenty money abroad and couldn’t be affected either way. All they had to do was to draw down a few dollars and they had heaps of naira.

For you the journalists, this is the background to this entire problem, because I had been witness to it. Before 1985, the naira was equal to $1.50 cents; a naira was almost one pound sterling. They were determined to knock it down; they asked Shehu Shagari in 1982, he refused, they asked Buhari in 1985, he too refused to devalue. Somehow they managed to clobber the rest of Africa by 1986; that is why we are here and that is why there is so much hardship. Even now, if we want to take a loan to build a factory, how can you do it? A million dollars is N330 million naira.

And the ridiculous side of it is, I was in Washington three months ago, my Special Assistant wanted to buy bananas; he was hungry. He saw one banana (one finger), he bought for $1. 70 cents; that is, N600 now. While N600 here will buy you two bunches of banana; which is to tell you that this so-called devaluation is rubbish. It’s just hype.

So, they corner us into these things and there is no debate; the political elite is not analytical enough or strong enough to say, ‘no we can’t do this’, like India and China did many years ago.

If you are not strong enough, realize that globalization and free trade mean competition. Otherwise, it’s like sending my five-year-old grandson into the boxing ring with Mike Tyson; you know very well what will happen.

Minister of Finance was called to the Senate a few days ago and they were asking her, ‘when will this situation change? She should have told them point blank, ‘this would have happened to any regime anywhere in the world’ because we were not ready. Having said that; we are working very hard.

7 comments:

Jeff Kingsley Jr said...

God will help us ooo

Harbolarkale Niyi said...

Their selfish behaviors has collapsed the economy of this country.

samaila sulaiman said...

May God help us

Kay Heavy said...

God will punish dem all

SPACO said...

The level of greedy in Nigeria is too much.

WOLE said...

This man has said it all. I remembered clearly Olu Falae was forming in the mouth defending and propounding theories for SAP, how SAP was the best option for Nigeria. As little as I was then I could see that this ignoramous Olu Falae was selling the future of Nigeria but he was too ignorant to see the future. Now the future is here. This is the outcome of SAP. I also remembered clearly how the empty head Badamosi Bababgida was ready to sell the whole Nigeria. This was when all these problems started

inumidun said...

God pass dem selfish people, running after dere own interest alone..