Saturday, April 21, 2018 5:38 pm
Professor Kingsley Moghalu, former Deputy Governor, Central Bank of Nigeria and President, Institute for Governance and Economic Transformation, granted ADEMOLA ADEGBAMIGBE and YOMI OSOBA an interview. He spoke on the Nigerian economy and how he will, if he becomes president, fix Nigeria. AYODELE EFUNLA snapped the photos
You have indicated interest to become president of Nigeria, what motivated you?
A crushing poverty, a level of crushing poverty in Nigeria is the primary motivation that drove me and I decided to put myself forward. You know that I have been in the government as a deputy governor of Central Bank of Nigeria (CBN),; you know that I have served for many years in the United Nations as a senior official. You know that in the years after my service in the government and the Central Bank I have been a professor in a Tufts University in the United States. In that period in which I was a professor, it was a period of reflection, based on the experience that I had about Nigeria, I had a healthy distance from the problem to have an independent evaluation of it. If I was part of the rat race so to say, it may not give me enough time to think very carefully about the problems but as a teacher and not being physically present for a short while gives me time to reflect and that reflection aid me to come to the conclusion that the best way to serve my country again would be at the political level of the presidency.
Your ambition is legitimate. Given the fact that people said there is no vacancy in Aso villa, how do you see your ambition vis-à-vis that claim?
Statements that there is no vacancy are fundamentally undemocratic. Nigeria, the last time I checked is still in democracy and that means that every four years, there would be elections for the presidency and other levels of offices for citizens who thought they have a vision to serve their country. That is exactly what I am doing, not about vacancy or no vacancy. The real issue is what the quality of life of the average Nigerian is. Nigeria has become the poverty capital of the world. We now have the largest numbers of who are absolutely poor among the countries in the world. Now if you are the landlord of a building in which there is no electricity, no water, none of the fixtures work properly, I think people have a right to say that they can look for another flat or they can look for another building. If you take that, if you juxtapose that with the political situation, will you like a sit-tight political leader to continue in office?
So, where there has been no performance, then the legitimacy to continue in office becomes optional. The truth is that the political class of Nigeria has failed. My quest for the presidency is not just a matter of tenancy or vacancy or no vacancy in Aso rock, it is a far more fundamental issue than that because my quest is based on my vision that is radically different- the type of political leadership for vision and competence. Poverty is increasing as the years go by, that is the fundamental measure of political leadership, the security and the welfare of the Nigerian people are not secure and their welfare is in terrible shape.
Again as I say, my candidacy cannot be reduced to convenient third force, fourth force, sixth force.. That is not the issue, the issue is Nigeria needs an alternative force and that is where I found myself. Let me explain, if you are diabetic, you are not supposed to be taking sugar, if for example PDP is coke, and APC is Fanta, there are all kinds of groups that may be Sprite, but Sprite is not water. If you are diabetic what you are supposed to be taking is water, so use that in the political system and the point am, trying to make is that Nigerians should not be confused in 2019. They should not confuse Coke, Fanta even though they are liquids, if you drink them, you may feel like you are thirsty, if you are diabetic drinking this kind of things is not good for you and at the same time drinking sprite is bad. Sprite has no colour but it has a lot of sugar, so you can confuse Sprite for water. So if I am water there may be sprite in the market and it could be easy to become confused between water and sprite so what I would say regard these third force or fourth force or whatever is that we just need an alternative force and that force has to be one that fundamentally has a vision to solve Nigeria’s problem. And that is the movement that I am part of, represent.
Is your movement going to transform to a party?
This is a movement of people across the country, mostly young people who want something very different from what is going on, we will join a political party. Yes.
Are you ready for this task? You just mentioned the fact that there is so much poverty in the land. There is the challenge of money politics whereby votes go to the highest bidder…
When you are talking about money politics, how can our life become better, and who can us help make it better? You know need people who have a vision, who have the technocratic competence, the knowledge to address the question of economic management in this country.
Who is your godfather?
I don’t believe in godfatherism at all. God is my father so that is the only father I have and that is God and in terms of human beings playing god, I am not in that business.
You were Deputy Governor of the CBN, how will you appraise the monetary policy of the past administration and how it is now?
Well you know, first of all you know that the Central Bank of Nigeria is supposed to be an independent institution, so its monetary policy should not be measured in political administration. The monetary policy of the Central Bank has been tight for some years now. The reason is because inflation has been extremely high, it is now beginning to come down very gradually but when I was in the Central Bank as a deputy governor I was one of the members of the monitoring policy committee under the governorship of Lamido Sanisu Lamido who together were very successful in bringing inflation down from double digits into single digits. We did that because we took very strong action when the inflation began to rise to the level we were uncomfortable with. So we instituted a tight management, but later on inflation again began to gallop away, but you know inflation in Nigeria has become a bit structured and it is difficult and it is necessary to control inflation.
Giving your experience.. the value of the naira depreciated to the extent of $1 dollar to N500 at a time, what will you say went wrong and how can that be corrected?
What went wrong was that politics entered into foreign exchange management. The current political leadership, when the price of oil failed, the value of the Nigerian currency depends on to a large extent on the price of oil because it is the price of oil that determines how much that enters the coffers of the central bank as a foreign reserve and how much that goes to the fiscal side of the government for their fiscal operations. Now the value of the naira has become a false measure of whether Nigeria is doing well economically or not, but the real measure of whether Nigeria is doing well or not fundamentally is whether or not the economy is productive. Here we don’t have a productive economy but we want the naira to remain strong. Politically it is popular to have a strong naira but there is no productivity fundamentally to sustain that strength.
So what is happening is that the Central Bank is keeping the foreign exchange market on steroids, constantly pumping dollars in order to maintain a false value of the naira so that people can feel that the naira is stable or strong. But the question is what is the real value of the naira and it is the productivity of the economy that should determine that not how much dollar that the CBN pumps into the foreign exchange market every week. The point am trying to make is this, let us face what the real issue is – is Nigeria economy industralised or do you export complex products? No. Is the source of your foreign exchange revenue diversified? No. we are still 90 per cent oil, with all these the value of the naira cannot be what Nigerians want it to be, so we should go and fix the fundamental problems first and then the value of the naira will evolve naturally in a way that reflects market forces.
We cannot fix the artificial value of the naira, now there are multiple exchange rates operating in the central bank today, that is again very, very bad in economic management, it is harmful to the economy because it means for political reasons there are a lot of wasteful subsidies going on, these are the reasons the economy of Nigeria will not fundamentally, structurally improve. We are running a “fake type of economy,” for political reasons but that is not how country that is serious develops.
Appraise this government’s fiscal policy…
Fiscal policy is how you manage and spend government revenues, if we are to measure it whether or not the budget of this government has been efficiently executed, we know that year in year out the performance of the budget is less than 30 per cent. So that is failure in any exam. The fiscal policy of the current government has not been successful because every budget they had made comes extremely late and has not been effectively executed. The fiscal policy has been a failure because the level on expenditure on re current items still remains excessive in the region of 70 to 80 per cent.
For all these reasons when you have a fiscal policy that is busy paying salaries instead of investing in real areas in the econonmy- capital investments- then you cannot claim success and when you are busy paying salaries like if you want to do capital projects you must go and borrow and put Nigeria into debts, our foreign debts has gone to 9 to 10 trillion naira three years ago to 21 trillion naira today. That is not a pass mark in any exam. We are told that oh we are spending this huge debt on infrastructure, we are yet to see the reality of that, these are just claims, the common man is not feeling the effect of that borrowing. Meanwhile, 66 per cent of government revenue is spent servicing these foreign debts so Nigeria is in trouble and people are just playing games and trying to create the impression that we are doing well when we are not. GDP growth is not what economic development is all about. Economic development is about the welfare of the people – do they have a life expectancy, do they have good hospitals, do they have good schools, portable water available to poor Nigerians? These are the questions we have to ask ourselves. Do we have electricity in this country that is appropriate for our population?
Now when it comes to electricity, the vision I have for this sector of the economy is radical different vision from what is currently obtainable. Industrial zones should be powered by gas, residencies don’t need to be powered by gas, solar can power residencies effectively so that we use our gas and hydro, the little we have, to power industrial developments, that’s a very new departure from what presently obtains, a conceptual departure. We will create a market, an enabling environment as a matter of government policy for renewable energy to be used in Nigeria. The environment also favours this, there is a lot of sun in the north, and in the country generally there is a lot of wind, so these things should be deployed more efficiently in our electricity generation plans and we need to now increase the level of gas powered generation. We know there are so many complications in that sector so the best way is not flogging a dead horse, it is to find a new horse and that new horse in my view is the solar and other type of renewable energy.
You have spoken about solar usage here but many are not durable, nor working…
No it is because the use of solar is not popular here. As a matter of energy policy, you regulate the market in a competitive way to say ok, renewable energy companies, come into Nigeria, with massive amount, there is a market for it, people can buy solar panels and fix and use to general electricity but there is no deliberate effort in this direction. What we are trying to do is that every year, we are trying to see if our 4,000 megawatts can become 5,000 or 6,000 this is what we do year in year out. What I will bring to the governance of Nigeria is Big Bold Thinking – Innovate and Grow. That is the title of my book where I laid down my vision for this country.
You raised an alarm over the real sector in the country, what will be your industrialization policy?
I believe we should have industrial zones in the six geo-political areas of Nigeria, I believe that those zones should be supported by government policy by creating an enabling environment for manufacturing. One of the ideas that am talking about is have effort to channel the gas and hydro electricity to those industrial zones so that they can actually perform in terms their ability to manufacture without power interruptions. Now those zones have to be given special attention, special privileges. Infrastructural development as a matter of priority of my government will go to those industrial zones, make sure they have electricity, feeder roads, and transport linkages, this is how to encourage a manufacturing economy.
We will also look at our trade policy to make sure that our manufacturers are not exposed to unfriendly trade laws, for example dumping whether from China or other countries, you know when goods come in that are so cheap, that manufacturing that is domestic cannot thrive because it is not competitive. Then after sometime there will be a level playing field because you have to compete, you must bring down the cost of production but at this point you must understand that with the way it is – the electricity consumption, the cost of production of industrial goods in this country cannot be as cheaper as it should be but if you provide that sustainable electricity then the price of goods will begin to come down, that is structurally what will address inflation and a number of other issues. Industrial policy also has to be designed, in terms of what advantages each geo political zone has. Industrial policy requires iron and steel to support manufacturers, so it is difficult to talk about industrial renaissance when Ajaokuta steel is not functioning. For decades these things have been allowed to rot, it is just one story after the other but now we need to develop the political will to put things the way they should be.
I know that you have traveled very wide; many people confuse development with growth, so we want you to expatiate on how you are going to handle the human development indices…
You know my main focus is going to be human development, the acquisition of skills, provision of quality adequate health care, access to education, these are the things that actually build an economy especially the educational sector. Now we are going to look at structural poverty and address it.