August 13, 2016

I Don’t Know What To Tell Buhari, I’ve Stopped Advising – says Prof Pat Utomi

Professor of Political Economy and Management expert, Pat Utomi, shares his thoughts on the state of the ECONOMY and other issues in this interview with Punch's Jesusegun Alagbe. Excerpt:

There were speculations that you were going to be a Minister or at least on the economic team of President Buhari. Were you not reached out to or you were simply uninterested?
First of all, I think there is too much emphasis on form rather than content in our context as a people. I think what is always important is our ability to work together as a people to change the society. There are different roles we can play as a people and it doesn’t matter when other people tend to criticise you as long as the right things are done. I was very uncomfortable with the whole rush of speculations leading up to that whole thing. 

What we wanted to do was change the direction of our country. We saw our country going in a set of wrong direction. Many of us said, ‘No, we can’t continue like this. This has great consequences.’ So we made our time, energy and every other thing available for the push. However, the only thing I can say is that the party (All Progressives Congress) did a terrible job at transition. They didn’t manage it well. Now we don’t see where the country is going; this is very obvious to me. But it is not a matter of who is where or not; that is not important.

Now, with the current situation of things, some Nigerians have been bashing this administration for not having a tight economic team. Do you share a similar view?I think what matters is do we have a set of cohesive ideas that are implemented by people who are very passionate about what they are doing, people who are trusted by those they are trying to lead? That is very important for any turnaround, because why you need a turnaround is because of loss of faith in the system. To get the system to run in a particular way, you need to have people who people have faith in. You could even have geniuses in the system who people don’t have faith in. They won’t get you anywhere. In that sense, therefore, I think we could have done a better job of trying to find passionate people who people have faith in and who also have clear faith in something.

Perhaps because the communication programme is also very poor, we don’t get a sense of where things are supposed to be heading, which may be there, but somehow it’s poorly communicated. So in that sense, there is a general loss of confidence in whether we as a party know where we are going or where the party is leading Nigeria to. Anybody who is sincere will tell you that. This feeling is pervasive to the extent that people like us who put everything on the line talking about change and all of that have been at the receiving end. People now ask us, ‘Where is that your change?’ I deal with this question every day. I can’t pretend that the change is there.

So there’s no change anywhere…
Well, there are some important things being done. There is a tendency to be a bit bashful about things in our context. Unless you have made a deep effort to understand why Nigeria’s circumstances are flawed, you won’t realise how terrible corruption is. In this country, aren’t you shocked when you hear all these revelations every day? I think no country should survive this level of graft. That this aspect is being focused on is an important achievement on its own and nobody should take it away. I don’t even think we have gone as far as we should go. 

The style should be different. I have been singing this song of how corruption has crippled Nigeria for decades. Suddenly, Nigerians are beginning to ask, ‘Is it that bad?’ Yes, it’s that bad; it’s even worse than has been revealed. It’s much worse because there is a total lack of how much corruption has plagued the system. I mean some people are so bifurcated of their dispositions that they don’t realise what they are doing and the consequences for everybody.

That’s why the guy in the National Assembly would say to himself, ‘What’s padding? Is it not just to put small things here and there and add everything up?’ To them in their conscience, what’s the big deal? For me, my argument for a long time has been that part of our problem is the structure. We don’t need this National Assembly at all as it is. I have been saying this since 1999. Nigeria does not need a full-time National Assembly. We need a citizen legislature, a unicameral citizen legislature. For instance, if you are busy on your farm at Ile-Oluji (Ondo State) and you just go to the National Assembly for a few days to make laws, you won’t be padding. You won’t be looking for Ministers to blackmail to get money and all of that.

So the structure of the country is wrong, the structure of the government is wrong. It assumes we are a rich country, which is not the case because of the way “oil thinking” damaged us. We are running a system that is way out of line with our resources. This is a major problem. Another issue about where and the way things are that I think people don’t give enough credit to is that just a change of government was a huge achievement. About a year and a half ago, a foreign journalist was asking me about my disposition. I said, ‘Look, I have consistently spoken on the subject of institutions and human development.’ 

One of the biggest reasons Nigeria is not reaching its potential is because there is a community both within and outside the country that believes that the democratic ethos has not settled in Nigeria. If you look at how Nigeria and Ghana were being compared globally two years ago, if you looked at the Index of Economic Freedom, if you looked at the so-called Failed State Index, you would see Ghana way ahead of Nigeria. The gap has been wide.

The question is why is Ghana so far ahead of Nigeria in the perception of people? Of course, everything is about perception. It is because Ghana had a change of government from an incumbent regime to another and then to another, in two cycles. Ghana is now seen as a more serious democracy. So for me, changing the government was an end in itself. It didn’t matter if we got a worse government. Just achieving that change was critical to institutional building in Nigeria. In the work that I did to ensure that change took place, that was, in fact, my top priority, before other issues that we’ve been battling with. 

Let us not feel as a people that because things are not going well right now, we should throw the baby out with the bathwater. I think we’ve achieved a significant thing by having a change of government. I think we are doing well by making people see how terrible corruption really is. But there is still a lot more to be done in that area. Then we can look at other areas which are not working down the line.

But could there be a real change when a government is changed but the people inside it and the system are not changed? Are we not stuck in the same cycle of having people with same old ideologies and principles just changing parties?You know things are progressive. At least people now know that if they do certain things which are wrong, they will be caught, if not today, but tomorrow. So they will be more careful. If you took everybody out, then you would get what we got at the beginning of the budget process. They took out the people who used to make budget and then they didn’t have anybody who has the capacity to make it, so the budget was a mess. Change is not about taking everybody out like that. In fact, part of my worry was that the people that we needed to retain were removed so fast. Look, this is part of the damage that the military did to Nigeria. A consistent unchanging public service that will change direction with some political leadership change is always better for the system because we need institutional memory. No organisation, whether it’s a business or government, can fare well if it lacks institutional memory — what the Germans call “veta shuuen.” We need that.

So I even think we changed people much faster. Yes, many people argue that many of the politicians in the APC came from the Peoples Democratic Party, but let me tell you why that is not the end of the world. If the core leaders of the APC have been able to firmly establish their ideologies of what the APC stands for, those people coming in, wherever they come from, will have to re-orientate themselves. In human history, in the history of political parties, people have always changed their orientations, parties have always changed their orientations. Now, would you believe that the Republican Party in the United States used to be the party of the Black people? Abraham Lincoln, who fought the civil war to emancipate the Blacks from slavery, was a Republican. But at a point in time, the nature of the leadership of the party changed; they changed their ideological dispositions and so the Blacks shifted over. So, saying people came from the PDP to APC is not really the issue. The question is that, is the core leadership of the APC able to define its ideologies, the way it governs, thereby affecting the newcomers?

My biggest concern in this regard was the electoral and the political party process. As a strong member of the APC, I think the political process has not been effective as it should be and I have never hidden this. I have said this to the Chairman of the party (Chief John Odie-Oyegun). Every time I see him, I ask him, ‘What’s the party doing?’ because the party should be the foundation. However, there is this tendency in Nigeria, and Africa as a whole, for political parties to be just about power.

Once power is grabbed, everybody abandons the party and runs into government. Before the last elections, I was talking with the Director of the International Republican Institute in Abuja (Robina Namusisi) and she raised this point about one of the problems in many African countries. She gave the example of an African country that after the party won the election, almost everybody from the party became government official — from Ministers, to advisers, and so on — until there was nobody in the party again. Then when another election was approaching, they discovered they didn’t have a party direction. I think the same thing happened to the APC. We had a number of strong people at the party secretariat, but everybody focussed on the government and forgot the party and so we have a problem because of it.

I have been raising this issue. Anytime I run into Chief Oyegun, I ask him, ‘Where is the party? Where are the policies? Where is your orientation?’ Anybody who runs into the APC must be schooled in what the party believes in so that nobody will just come and use the party as an electoral machine to get power. How do you expect them to behave in a particular manner? They cannot because they’ve not been told what the party represents and believes in. Maybe I should run for the chairmanship of the party.

Are you considering doing that?
Well, I don’t know, but it is a very important subject that we need to deal with. It has been part of the failure in Africa.

In July, President Buhari said he was averse to including the private sector players in his economic team because they were used to exploiting government policies for their selfish interests. What’s your view on the President’s statement?I agree completely with the President. You cannot have a former government’s economic team making policies that are going to affect your play. That is not proper. It almost amounted to insider trading. It’s wrong both morally and in terms of decision processing for the former economic team to include private sector actors. 

It’s like an actor making policies for and regulating himself. I think that’s what the President meant in that sense. But that doesn’t mean there should not be structures in place for consulting with the private sector. Their input is important. I keep reverting to one of Africa’s best examples. It’s a country called Mauritius. The discussions at their Chamber of Commerce are even more important than the discussions at their Parliament because once the Chamber of Commerce takes a position on something; the government almost automatically takes a position with them. That is why Mauritius is prospering.

Consulting with the private sector is important, but having economic players in the economic team is like self-regulation and that is not proper. However, I think the conversation is missing the real point. The whole thing that (former President Goodluck) Jonathan did with some private sector players like Aliko Dangote and others; that was unacceptable, that was wrong. However, we need people with private sector knowledge (but who are no longer in the private sector) to be in the policy team. For instance, the US Treasurer is usually somebody who once worked in Wall Street and then goes back to Wall Street after spending about two years in the position because their time is so valuable. I think we are not getting the proper conversation going on in Nigeria.

Due to high interest rate, inflation, scarcity of forex and other factors, many Small and Medium Enterprises have been pushed out of the system. Do you think the present administration is getting its economic policies right?But you see, if SMEs are really SMEs, their transactions should not be dollar-based. Why many of them are out is because we don’t have an economy that produces and so what we have is a chain of rent-seeking behaviour. This guy seeks rent from doing government’s contracts and then sets up a supply company to extract the rent from him; that is the kind of economy we have. Our model, sadly, is exactly like that of Venezuela.

…which is in deep economic crisis now
Venezuela has always been in crisis. This is the country that has the biggest deposit of crude oil in the world but cannot provide basic services and Nigeria has been imitating Venezuela continuously. I have been saying this for years. Let’s look at other countries with bigger problems that have struggled better. Look at Indonesia, an oil-producing country like us. Let me tell two stories about Indonesia, hoping we can learn lessons. Some years ago, Peter Lewis, a friend of mine who is a professor at the School of Advanced International Studies at John Hopkins University, U.S. (where I also have a permanent seat), wrote an interesting book called “Growing Apart.” The book is a comparison of Nigeria and Indonesia. In the early 60s, people used to say to Indonesia, ‘We wish you could be like Nigeria.’

But in the early 90s, people used to say to Nigeria, ‘We wish you could be like Indonesia.’ These two countries have always been referred to as “development twins.” I used to talk about these things such that when Chief Rasheed Gbadamosi was appointed by the Abdulsalami Abubakar regime as the Minister of National Planning and Development, he was the head of the Nigerian delegation to the Organisation of the Petroleum Exporting Countries. He once went to an OPEC meeting in 1998 and when he came back, he couldn’t wait to get hold of me. He said, ‘Pat, now I understand what you’ve been talking about.’ I asked him what that was all about. He said when they got to the meeting (it was during one of those periods of economic crisis when oil price was low like we have now, but much worse, around $9 per barrel), every member country was talking and shouting that their quota must increase. He told me that as the meeting was going on and everybody was shouting, he noticed that the Indonesian oil minister was just quiet and feeling like, ‘Why are these people shouting and disturbing me?

Can we get to more serious conversations?’ Chief Gbadamosi said the Indonesian minister just wasn’t engaging in the conversation. He then went to the man and asked, ‘Are you people not bothered? Don’t you want better quota?’ He said the man just laughed at him and said, ‘It’s you Nigerians who don’t know what you are doing. We don’t depend on oil money. We are making more money from gas than from crude oil and you Nigerians started before us in that direction.’ Another story I want to tell about Indonesia is from one of my visits to the country in 1997. It is a country that is said to have a terrible history of corruption. My host was a former oil minister of the country, Prof. Mohammed Sadli. He’s dead now. This man was living in a bungalow without air-conditioner; meanwhile, Jakarta, their capital, is hotter than Lagos. As we sat in his living room and fans were blowing, this man’s favourite subject matter was ethics. I thought to myself, ‘Imagine a former oil minister of Nigeria living in a bungalow without air-conditioner, just imagine what people will be saying about him.’

But you see, in the middle of the big corruption in Indonesia, President (Mohammad) Suharto was able to put together a team of PhDs in Economics, who were mainly graduates of the University of California, Berkeley, U.S. — who were widely known as “The Berkeley Mafia.” Many of the people in the team offered themselves selflessly to redeem their country, which is why now a country that was used to be asked, ‘Can’t you be like Nigeria?’ has done far better than Nigeria. Nigeria is now being asked, ‘Can’t you be like Indonesia?’ There is a pool of such talented Nigerians who are given to selfless service, knowing that just out of the quality of their mind and education, there are more important things in life than the size of their bank accounts.

It’s not because they are stupid or anything, but they just want to see things become better. If we are sensible enough, we should have seen it by now. Look at all the guys splashing money like 10 years ago, I know where many of them are now. The failure of leadership in Nigeria is the failure to do what Indonesia did. We should find the kind of people that Indonesia found and let them redeem this country. Even though President Suharto was busy making money for himself, he knew where his country had to go and he found the people who took his country there.

And that’s what President Buhari should do right now?
I don’t know what he should do. I have given up on advising people. I just want to become a farmer and see if I can produce something.

Recently, the Minister of Finance, Mrs. Kemi Adeosun, said Nigeria was technically in recession. As an entrepreneur, how do we navigate through this period?
As they say, when you look at a cup, it can either be half-full or half-empty. A recession is an opportunity. I have a favourite story in this regard of the Great Depression in the U.S. (1929-39). During the course of that depression, there was a gentleman called (John Richard) Simplot. He observed that when things were bad — when people who had skyscrapers were jumping to their death — most people wouldn’t be eating what they used to eat because they wouldn’t be able to afford it any longer. Instead of eating expensive meals, they would probably be looking for cheaper food. So he asked himself, ‘What is the inferior food that can now be turned into an attractive one?’ Back then, many people hated potatoes, they considered it a poor people’s food. They used to say it was a trashy food.

Meanwhile, potatoes were growing in the wild in the Idaho area of the country. Literally, you could buy a truckload of potatoes for just $1. So Simplot said to himself that potatoes would be the kind of food many would come to embrace because they didn’t have money again. But then, potatoes had such a bad reputation for being cheap that people were ashamed of being seen eating them. What did he do? The first thing he did was to think that if he was going to start marketing potatoes to people, he needed to find out how to store them because they were just rotten everywhere, just like in Nigeria where many farm produce end up in the trash. He then made some researches on how to preserve potatoes and he found out that they were one of the easiest foods to preserve. All he had to do was remove the water from them — that is, dehydrate them — and they would still retain their properties. If six months later you want to fry them, just put them back in water, and they will come up again. Simplot then began to slice them up and since potatoes had such a bad image, he wanted to change the image. He then fried all the slices and didn’t call them potatoes. He called them “French fries.” People fell in love with the French fries instantly.

Afterward, fortunes smiled on him because he ran into a guy called Ray Kroc who founded a company called McDonald’s. They came into partnership and every time customers bought hamburgers, they would also buy French fries and Simplot became a billionaire in the process (worth $3.6bn before his death in 2008) — in the middle of a recession. So we shouldn’t see our recession as a frightening moment, but as an opportunity to get Nigeria to begin to produce again. That is why I’m passionate about agriculture now because that is the future.

There are other areas we can begin to look into to sell. We can sell culture, which is one area we have been excelling. Our films and music are selling. We can sell our culture much better than we sell crude oil. We have talked a lot about our agricultural value chain. My favourite example always is rubber. Why would you manufacture a car in Nigeria where you won’t be competitive? Take rubber for example where Nigeria once had the best yield per hectare. This was a presentation I made at the Nigeria Economic Summit in 1993. Take the rubber and become its best producer in the world and export it, knowing that it is one of the most important components of manufacturing a car. We will probably be making more money from it than from crude oil.


samaila sulaiman said...

May God help our country

Harbolarkale Niyi said...

Wao! God will save us from this recession

olutoscene1 said...

God dey.

#Olu, can you see?

Gabice pumokumo said...

There is a lot of sense here. The best is usually not been considered until its too late. May Nigeria be not late comers.

Hassan Aderemi said...

Prof. do not give up on the project call Nigeria.

inumidun said...

God help us..

SPACO said...

Is well.

Unknown said...

Fantastic piece from the Prof. Honestly I'm better enlightened

Obiora Ekwueme said...

Fantastic piece from the Prof. Honestly I'm better enlightened