With employment rate at 21 percent and poverty index dangling at 33.1 percent, the Director-General of Nigerian Economic Summit Group (NESG), Mr. Laoye Jaiyeola, speaks with Adedayo Adejobi on how the think tank group is engaging the federal government on policy advocacy, the role of government in making Nigerians feel the true essence of being out of recession just as he churns out NESG’s projection for the economy. Excerpts:
What’s the unique essence of the Nigerian Economic Summit Group and what has been its contribution to the economy to date?
Let me give you the background and history of the Nigerian Economic Summit Group and what we’ve been doing; maybe that will bring out the input. There was an election on June 12, 1992, in Nigeria and it was the best election ever held in Nigeria. Subsequently, that election was annulled and the resultant riots and actions that took place in Lagos, particularly meant that offices were shut down, people could not access their places of work. A number of things were halted and so the corporate leaders gathered themselves and said rather than leave the government to run things the way they deem fit, why not begin to engage them? So, the likes of Ernest Shonekan, Bryan Anderson, Pascal Dozie and so on gathered ourselves and asked how do we ensure that we facilitate an environment where it is easy to do business in Nigeria? Subsequent to that meeting, we had our first summit in 1993. And subsequently, we’ve had about 24 summits and the whole essence is to facilitate an environment that will make businesses to thrive. In doing that, we operate as a think-tank and a private sector-led organisation, not funded by the government.
First, we operate as a dialogue partner. How do we create an environment for dialogue not only for the government, but for civil society, academia and bring people together on what we call PPD (public-private dialogue)platform? We do that through the annual summit that we hold. We make sure people come to discuss issues that relate to policy and we run this around the level of policy commission. Close to 43 groups and many of the platforms that we operate, then we serve the role of a watchdog. Then, we use research to drive policy. In dealing with government sometimes we conduct research into areas and present facts to the government and these researches are not just test research.
The next thing we do is stakeholder validation to say, does it reflect what we are seeing, not just bringing best practices alone? We communicate with government, so government themselves can look at how things are going and what should be done. We play the role of a connector and whether we are connecting business with government or government with business or government with the government, which we do from time to time. So more often than not, we bring investors coming from other countries together with the government. And the last we do is, playing the role of the intervener. Because for you to be a watchdog, sometimes, you need to be a connector; sometimes you need to plant yourself in there to see things too that we do through our fellows. Basically, those are the ways we’ve been operating and we’ve done that now for 25years.
In 25 years, what has changed?
Once upon a time, you couldn’t talk about privatisation and regulations. In fact, we talked about commercialisation as a phrase to make it work and a lot of things that we see today that we sometimes take for granted. Today, I can see you have your phone, you make calls and those things. I remember the time we agitated that let’s privatise the likes of communications industry; let’s see what we can do in terms of people’s pension, all reforms in the pension area, all the reforms are all those things we asked for, those are the things we see. Had it been exactly how we wanted then, we could have done better. As I said, when you talk about vision 2020, people don’t remember how it came about. We started with vision 2010 when Abacha was there, then when Obasanjo came, he said no, he didn’t want something like that. You ask me, did they follow it? Not as well as they should follow it, not as well as we should, because if we do follow it, we would have had a reasonable improvement than where we are. But at least, there was a vision, there was something we were able to put together to drive us as a nation and as a people. And I would tell people, we are thinkers. Ours is to make sure we put enough evidence to guide how policies are implemented and we can only advise and we can only give opinions. The implementation, I agree with you, is not as we expected; it could have been a lot better. But one of the things we’ve learnt here is, keep on talking and keep on engaging, because if you don’t talk and you don’t engage, you probably won’t have anything done at all.
The employment rate is 21 per cent, while the poverty index is 33.1 per cent and Nigeria is perceived as Africa’s largest economy. What is NESG doing to help in the area of policy direction to help reduce this number?
One of the first things we tried to do was, we made it clear to the government that there are tough choices to be made. They are all reform matters. There is a battle about how much we’ll pay for fuel, how much subsidy we’re doing, how much subsidy is being lost and till today that battle is still there and people are talking about the recovery of over N1.5trillion, which is much more than our capital allocation. We can make the needed capital to come in, the fact is that we are endowed with resources, but do we have the capital to run the nation? No. Are there no other nations competing for the capital that we want? Yes, of course, every nation takes a decision and makes policies that can make the environment good enough to attract private capital; so we told them. We made it clear that if you do the cosmetic adjustment, we are heading for a recession. Unfortunately, it was business as usual and by June, we headed for recession.
The following summit was when we dealt with made in Nigeria. Now, how do we make the Nigeria environment good enough to do business? How can we do some value addition to some of the things we produce in Nigeria? We export crude oil, we import refined oil; we export cocoa, we take in chocolate, how do we begin to add value? Because if you begin to look at those things long value chain and this so-called lack of jobs will get mediated. These are the things we began to talk to them. The ERGP, specifically, we had at the beginning of last year. What we did was, we told the government after our economic report, which we issue annually and we focused on how we can grow beyond numbers. We brought up the issues of human capital challenges and said there were three key things to work on- areas of investment around transportation. All we need to do is a social investment – to allow some inclusion.
It’s bad that today the human capital index is out and we are still very low. But unless we begin to do some detailed backward integration value chain analysis that allows people to be employed along those work areas, unless we begin to pay attention to the issue of health and education, we wouldn’t grow. Whilst I say for government at the federal level, it is important to note that the state governments are not free.
The effectiveness of our products is still not good enough, we don’t use enough seedlings, we don’t use good fertilizers, our extension farming practices are terrible. We got ourselves involved in the last three months in the fertiliser and seedlings bills and we went to see the farmers. It was clear that many of them are in practices that are not doing well, because again, if the farmers do very well and they have the right quality, they will go a long way in mitigating poverty. So in terms of policy, we make a lot of effort, but we can only advise.
Isn’t it worrisome to NESG as an organisation that things are like these, despite all your contribution in the last 25 years?
I think it is worrisome, not to us alone, but to every Nigerian. We all just need to continue to do what we can do to get better, and we have suffered the impact of massive devaluation upon the livelihood of people to the extent that we still run a lot of import-dependent facilities. You find out that everybody is poorer than he was before the devaluation, because before devaluation when we imported, those prices were reflective of devaluation. It’s one thing for us to look at those policies and put them out there, we need a number of people to take them up and begin to talk about them because the fact is, unless we put our hands and begin to demand results, not only from the federal and state governments, we’re not going to get results. But more often than not, there’s a thinking by most of us Nigerians, we think ‘oh, they would do it, somebody would do it; it is not my own, it hasn’t come to me’ and not knowing that if you don’t labour in suffering for it, tomorrow it might get to you. We are worried about it and it’s something that frightens us because if we don’t do anything about it, the implication for all of us is dire.
Aside organising the yearly economic summit, what milestones would you say the group has achieved?
I will say my friends in the media are not doing enough. At the end of every of those summits, there’s always a green book that we produce that states everything and we send it to almost everybody and those in the media, to tell you these are things government has agreed to do, these are the things that private sector has agreed to do. And one of the things we expect our friends in the media to do is to monitor and begin to call people to question constantly and say you have agreed to do this, how far?
It’s a lot better if all of us put a lot of pressure on government to say you committed to do this but you’ve not done it.
But again, some of these policies take a long time to have impact; it takes about five to six years. Our job is never to leave them alone. Like I told you, we have 11policy commissions, 43 thematic groups. Take infrastructure, for instance, we have those that focus on rail, road, water and sanitation, so all the works that you see ministry of water and mineral resources and others doing, we are pushing them. We work not only with the executive; we also work with the National Assembly. We have a platform that is called National Assembly Business Environment Roundtable; it’s made up of ourselves and some sections of business and law. Ours is to make sure we give support and input from time to time to ensure the laws are passed, the policies are right in terms of engaging.
We do all of these things and they cut across 43 groups. Sometimes, we go to the ministries, sometimes they listen, sometimes they don’t. Nigerian Economic Summit Group doesn’t take on government. There are Nigerians that volunteer to engage government; they spend their money, resources and time to make sure they keep this engagement going. In recent times, you see one or two development partners supporting the work we do, but it is majorly volunteers that do the job. There’s been a lot of work; we’ve been talking about sustainability in Nigeria, the issue about climate change, the issue about when Nigeria wanted to sign the climate agreement and the private sector didn’t get involved. When they are going to submit their report, we had to get involved and say come, these have implications on businesses. Why don’t you get private sector involved? So we had to bring the paper out, get private sector involved and even in the so-called implementation. We make sure we follow. We are working with government and sometimes sit with them to ensure monitoring.
How do you monitor and evaluate?
But all these things are done by volunteers. We believe that we shouldn’t leave the fate of our nation in the hands of only government. We should support by ensuring that we shape policy, influence policies and make our knowledge and expertise available. And in most cases, government won’t tell you they don’t want; they would say we accepted to do it, except they don’t have enough money to carry it out, and apparently what we do is keep it going constantly. So, year in year out, we are in the process of putting together a green book and what we then do is that we distill all our policy recommendations across all the policy commission and we give each policy commission what to do.
What impact has the NESG had on government?
There is something we are probably releasing in the next two months. We are looking at 25 years impact of the Nigerian Economic Summit Group, and I tell you that once upon a time pensioners were queuing up and nothing for them. I recall we said let’s change from our defined benefit scheme to defined savings scheme, where people can set up their money and save it. It was as if you guys are thieves; how can I bring my money to private sector? But today that scheme is working and it has put together about N8 trillion cash, which is government security which we’ve been able to manage and structuring very well. They would be deployed to good infrastructure that would build nation rather than being kept on government loan, but at least, it has mobilised tremendous savings. Look at the power, for instance, it is not well done and managed to the point of government and investors and there’s a need for those that would move it forward. But if you look at other areas in the liberalisation in terms of what’s happening in the telecommunications industry, banking industry, you’ll see it’s about how do we make the environment for doing business better.
But our major challenge is we’ve seen some reversals. If we have been consistent in the path? We followed our path, learned our lessons. One of our major problems presently is the absence of a clearly defined developmental objective that is accepted by all and everybody follows squarely, then they are forced to deliver. You’ll see the absence of proper coordination, even within the government; it makes delivery difficult.
It takes more time in getting results than we should get; those are the challenges we see in the place of governance and no doubt the cost of governance has allowed for too much money being filtered away. But in terms of some of those things we’ve achieved, at least we’ve opened areas where we’re forcing government to ensure that evidence-driven decision is key.
What other programmes do you have apart from the economic summit and research?
The value is ensuring we agree and we get work done. We operate through policy commission, sometimes about 4,5,6 times a year working with government to get things done. When we need to train, we train when we need to educate, we do. For instance, there’s been a lot going in the area of renewable energy. When government was going to do energy mix ,we put renewable energy people together, offered them our offices to start meetings and we’ve conducted research in that area.
Nigerian economy is said to be out of recession, but its growth is slow at 2.3 per cent. What are the indicators that show it is no longer in recession?
The fact of the matter is not about feeling it. When is a nation in recession? They say they must have had negative growth for two consecutive quarters. We haven’t had that negative growth recently. We had recession in June 2016, but now, we are technically out of recession. Now why people say we are still in recession is because, if, for instance, you grew by1 per cent and a man has had devaluation, for example he was doing about N200 to a dollar, now he has to import for N360 the things he is paying for in terms of pricing, The price has gone up and he hasn’t caught up with the changes in prices- his salary has not reflected to show how much devaluation he has. He has not been restored to the state he was before. To the extent that Nigerians have not been restored to the state they were before recession, they don’t feel the impact. But technically we are out of recession. But have we restored to the level where we have made life better for people? No, we have not.
What should be the ideal government’s role in the scheme of things?
The ideal role of government is to make business environment better for people so that businesses can thrive. I don’t believe government should always create job, I don’t believe government business is to own any business; it is to facilitate the environment so that people, who have the capital can come in to create the job.
The role of the government is to make businesses good, ensure the environment in terms of peace in the land, orderliness, litigations are handled and the laws are clear.
Nations like Dubai, Singapore, Indonesia and others, have pulled out of OPEC and diversified from oil into other sectors of their economies. Has the government followed through your recommendations on diversification ?
Ours is for them to agree to accept it. We are one of the many advisers. However, the problem of this economy is that it’s oil dependent.
The bulk of our income, expenditure, all come from oil, so no matter what happens to oil, it affects us in terms of how the economy is diversified. So we need to begin to tap the various sectors to begin to give value. Take agriculture, for instance, we shouldn’t be exporting anything raw or crude. We should begin to extract value, so you create environment to ensure there’s value, logistics are good enough then we begin to extract value from it, so that across the value chain, you engage people, earn money. If you emulate nations like Norway that realise their income from oil and then say, you know what?, we don’t care what happens to oil because oil is a wasting asset, whatever money we have from it, we’ll keep it for generation unborn. Let us spend what we have maybe, we’ll become more entrepreneurial, creative maybe as a nation, we’ll not waste our money on subsidies that cannot be sustained or overheads that cannot be sustained and priorities of levels of government that we cannot sustain. But because we monetise everything we get from oil and spend everything, that’s why we are up and down today, up and down tomorrow, but in terms of the economy, is it diversified? Yes, it is because oil just accounts for 10 per cent of our GDP
What is your economic projection for 2019?
My projection remains the fact that unless we deal with this human capital issue, regardless of how much we grow our GDP, we are in trouble because if the people are not healthy, we can’t have a healthy workforce. So, for me, it’s a major challenge that we are sitting on and we are not looking at population growth. Unfortunately and I hope that we don’t spend half of the year sleeping and politicking because usually, years like this, we spend half of the year not doing anything. I don’t see anything significant in the horizon in the New Year for two reasons: oil price are not looking very good; we are dealing with the issue of increasing wages of workers and it might be inflationary; our agric is not. And so the oil prices are looking down, inflation is likely going to turn up. And we are going to spend half of the year politicking. So it calls for concern; we need to hit the ground running and be more serious than we are taking it. Whether at the federal or the state level, we don’t have the luxury of time. Sometimes, we think we have, but we don’t have the luxury of time. Things are changing in very quick succession.