Why Nigeria’s economy is losing value under Buhari —Olawepo-Hashim

Mr Gbenga Olawepo-Hashim is the presidential candidate of the Peoples Trust (PT). He is a businessman and a big actor in the energy sector. In this interview, he speaks on the lapses in the economy under the administration of President Muhmmadu Buhari and why only a private sector-led economic initiative will rescue the country from the present decline. Group Politics Editor, TAIWO ADISA presents the excerpts:

 

PRESIDENT Muhammadu Buhari recently said that the economy is looking good and he will make it better. That seems to have taken the sail out of a number of candidates like you who have been hammering on the poor state of the economy. Don’t you think so?

When I see the president’s WAEC certificate, I will understand whether he even wrote economics.

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But WAEC has given him an attestation certificate… 

Anybody who read O.A Lawal or Teriba for O/Level Economics will know that the economic management under the APC government is a disaster. Even if you didn’t go to school, you can relate to some credible data immediately. The Brooklyns Institute just indicated that just within the past four months alone, over a million Nigerians joined the category of those who are acutely poor. That is to say they have fallen below that bracket of those who live on two dollars a day and there are 88 million Nigerians in that category right now. This has never happened before.

Secondly, it is a big tragedy that under a regime of high oil price as we have now because the excuses before was that oil price was low; we have a very high oil price regime now and poverty is on the rise, there is a run on the reserve of the country. It looks to me like the APC as a government has made a covenant with poverty and they are irredeemably committed to impoverishing Nigerians. The truth of it is that the president does not understand basic economics. Otherwise, he would not say that the economy is looking good.

Crude oil is selling at over $80 per barrel and insurgency in the Niger Delta has been subdued, if not wiped out. Despite all these, you are seeing the foreign reserves drop consistently. What do you think is happening?

What is simply happening is that, number one, the APC government does not have any economic management strategy and they demonstrated that from day one when they moved the economy of the country that has grown consistently for 15 years at between six and seven percent, into recession. This underscores the fact that it is not about oil price. It’s just that they don’t have a strategy. They don’t even understand the economy. So, if Nigerians want to see real development, the Nigerian electorate must immediately vote out the APC.

It is not as if we had a prosperous economy before they came because the size of the economy is so small. $510 billion GDP about 2013 was celebrated, but to 180 million people, it’s a small economy and it’s not able to grow people out of poverty. We need at least a $4 trillion economy and that’s our own target that within ten years under our new economic development plan, we will take Nigeria to a $4 trillion economy, which will make Nigeria a medium income country.

But at least, those who were there before the APC were still managing to sustain some relatively small growth, which was lost in 2015, due to bad economic management. Between July 2015 and 2016, we saw negative growth of -2.4 percent.

 

One of the talking points of these campaigns so far between the two major political parties is the issue of restructuring. What is your take on that?

The word restructuring has been so politicised that even the content of the discourse sometimes is lost. There are people who are generally scared when they hear that and for some, because it is the new fact that everybody wants to hear, they have to mouth it. The point for me is the content. When you are talking about decentralisation, you are talking about devolution of power.

We have been talking about that for more than 30 years now. Senator Mahmoud Waziri was the Treasurer of our group then, the National Consultative Forum, led by Alao Aka-Bashorun. The group that first talked about decentralisation of power and we attempted organising a national conference under the army and the army brought armoured tanks to stop us in National Theatre.

It was a well-articulated and well thought out position. We had the people who we called the technocratic group who were people who have been Super Permanent Secretaries in the days when the military came into power for the first time.

They themselves came to the conviction that an over-centralized Nigeria was unworkable and that we needed to decentralise and devolve power. Then we had those of us who came from the Human Rights Movement led by Alao Aka-Bashorun, Beko Ransom-Kuti. I was the National Administrative Secretary.

A lot of people who are talking restructuring today were with that military government opposing us. Some of them were contesting under them. They said we were talking rubbish, that we should allow them to do their elections, while we were focused on the issues that were germane, which was the structure of the state. But because a lot of Nigerians don’t have a sense of history, anybody can just appear during elections and open his mouth and then he will get attention.

This also encourages a lot of political fraud. Sometimes, we transport ourselves to be defrauded politically. I would have expected a good research on this issue. One of the things you see in academics first is that you pay tribute to the originator of a given idea. There is lot of intellectual fraud in this country.

So, I want to deal with the content. The content is that we need to devolve power. Over-centralisation is unworkable. It leads to corruption and inefficiency. To be quite honest, when we made the campaign on that note, it was not ethnic. That’s why we had Mahmoud Waziri as our treasurer.

Alhaji Tanko Yakassai was part of us. They didn’t see any qualms with what we were talking about. But when you regionalise it and you begin to evoke ethnoreligious sentiment around that issue, you cannot have a consensus around such an issue.

When I become president, my duty will be to rally the country and move the country together to achieve national consensus to solve problems in a practical manner, not to politicise simple issues and divide the country along the line. I will lead a national consensus on how to reform the Nigerian State to make it more efficient and more development oriented.

That was our perspective in the late 80s and early 90s regarding how to reform the Nigerian state and that’s still where I stand till today. The language is devolution and decentralisation and the discourse is how do we get the national consensus to drive this. That’s what my job will be as President and Commander in Chief, not to divide Nigeria around any issue, but to unite the country and move rapidly to solve problems.

 

One of the indices of development is job creation. The World Bank and so many agencies have told us that to stabilise Nigeria, the country needs to create not less than four million jobs annually for the next 10 years. As president, how do you think you can make this happen?

When we grow the size of the economy, jobs are automatically created. The Oxford economy in PriceWaterCooper study of available funds for infrastructure worldwide, there is $78 trillion US Dollars to be spent on infrastructure worldwide in 10 years. Nigeria is a country with massive infrastructural deficit that returns above average on investment and therefore naturally should be a destination for infrastructure funds from Edmonds funds, from pension funds globally.

The problem with Nigeria is that we have public servants as regulators who are putting stops on the way. They can do road shows to you in France because they will collect estacode to do the road show. The day you take your ticket and come to Nigeria, they will say okay he has come. They will show you pepper. They have an attitude that you have come to make money.

They have a belligerent attitude towards investors to start with. I know that as a businessman, when you go there and you are trying to build a project, they are arguing to you why it is not possible. They are looking for all the rules in the book to stop that project. That’s one of the problems.

Investors are also interested in sanctity of agreement, that once an agreement is concluded, it will be followed through, and if there is any deviation from the agreement, the dispute resolution mechanisms will be so swift. It’s not like somebody has violated a business agreement and we are going to court for 50 years. No investor has time for that kind of thing.

That’s why we must have a very robust arbitration system. These are things that the Ministry of Justice can handle in collaboration with the Chief Justice of the Federation. So, some of these things are not just simply political. We will rejig our legal infrastructure to make sure that Nigeria is more business friendly so that when an investor brings his money, he knows that there will be sanctity of agreement.

So, the issue of the ease of doing business, why Nigeria has scandalously fallen to 145 in the world is fundamentally due to our inability to net infrastructure funds, in as much as we have a high rate of return. If we can net just five per cent of infrastructure funds, that’s $3.3 trillion in ten years alone.

Secondly, you have a lot of remittances that have happened in the past from Nigerians abroad, even though we have not had a deliberate, organised investment oriented networking with the Nigerian diaspora, which can contribute a lot of capital for Nigeria’s development and job creation. In 2013 alone, over $27 billion, almost competing with our oil revenue, came from foreign remittances.

With an organized strategy, we can up it to a hundred billion dollars in a year. In 10 years, that is $1 trillion, just from infrastructure investment alone, and by rejigging remittances, I’ve told you how you can have $4 trillion investments in ten years. $4 trillion investment in ten years will bring Nigeria to become a middle income like Thailand, Chile, Malaysia and other places. It’s not necessarily going to take us to become like United States or Germany. So, it’s a very modest target that will create jobs. Infrastructure creates job .

The other point of job creation is also to integrate agriculture with industry and manufacture. Agriculture does not create value when it just lands in the stomach and the one that cannot land in the stomach is thrown into the rubbish bin. It becomes more meaningful when its tied to industry and manufacture. That’s where the value and jobs are created. So, we have to organise agric and integrate it with solid minerals and industry.

We have a financial sector reform that will deepen the amount of capital available in the financial market. A lot of guys got banking licence in cooking books. Some of them were former AGMs and all that. They have been using their banking licence to take a mileage on the economy and all they do is to crowd out real investors by collecting all the deposits and giving money to governments through bonds, just funding government borrowing and the private sector is crowded out.

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This government has been burdened by rising debt profile. Is that not an issue?

There is nothing wrong with borrowing, but what you use the money for. Nigeria is not a heavily indebted country. Nigeria’s debt stock is still less than 20 percent of Nigeria’s GDP. Before, it was about 12 per cent. Now it has risen by about 8 per cent and most middle-income countries in the club of Nigeria, their debt profile to their GDP is above 40 per cent. United States is almost about 102 per cent.

Their debt profile is bigger than their GDP. The issue is what you do with the money that you take. Is there a cash flow from where that investment is going? If you take money and go and build a road to nowhere that will not generate any economic activity,  that is a negative borrowing. So, it’s not borrowing that is the problem but what do you use the money for.

I will rather, for instance, use a lot of sovereign instruments to give comfort to investors who are naturally positions to do good investments than public institutions and agencies. Whereas, they have refused to provide sovereign guarantee for people who have brought money to invest in the country to back their uptaking counterparts, they are taking loans and bonds directly.

When civil servants and politicians take loans, it ends up at the FAAC. The foreign exchange market will go and take it out of the country. But when you back investors who are putting money with sovereign instrument to say if everything fails, you have my back.

First, they are spending their money and your liability is contingent liability. That spurs investment in a very harsh environment like that. So, my strategy will be to use my sovereign instrument to give comfort for real investments and benchmark those investment portfolios, rather than just continuously taking money directly and distributing it to civil servants and politicians who will not manage them well.

That’s the problem and I don’t know why they are not using their sovereign instruments to give comfort to investors. They will rather be taking money and spending it directly as the government. So, taking loans is not the issue. I actually believe that Nigeria is not heavily indebted, given the size of the GDP. But I have problems with what they are using the money for that we cannot see it.

 

The campaign train will be hitting the road in a matter of days. What are you going to be telling Nigerians on this issue of economy?

It’s so simple that for the past 27 years, I’ve been creating jobs as a private entrepreneur, locally and globally. So, when I’m in government, I will create jobs. One of the reasons why President Buhari does not understand how to create jobs is that he has been living on the government for almost 50 years. He rides in the government car, doesn’t buy petrol. So he cannot feel what the ordinary people are feeling.

But for the past 27 years, I pay salaries. If you see me ride a car, I bought it with my money. I fuel the petrol. I run my energy sources. So, I feel what the ordinary people feel. So, those who have never created jobs in their life cannot now get into government and begin to learn it. So, I’ve been creating jobs and they can believe me that I know how to do it.

Secondly, I’m going to unite Nigeria, which the APC government has not been able to do. Nigeria now is more divided than at any point in time in our history. I will secure the country and I think most Nigerians are really very worried about security. Security is key to many people, even before economy because without security, you cannot even do your farming.

Farmers cannot even go to farm in many states of the federation right now because there is no consequence for those who have been killing other people. They don’t see them punished and therefore there is no deterrence. It’s looking like the life of the average Nigerian does not count.

I will make the life of every Nigerian to count as President and Commander in Chief and it starts from day one. When there is killing and there is consequence , the killers are punished immediately, other people will be careful to run in excitement to want to take other people’s lives.