OBADIAH  MAILAFIA: Nigeria Needs an Economy that Can Compete 

Obadiah Mailafia

Obadiah Mailafia

Dr. Obadiah Mailafia is an economist and a politician. After earning his doctorate in economics from the University of Oxford, he worked as a university lecturer in the United Kingdom and later as a senior economist with the African Development Bank before he was appointed in 2005 as the deputy governor of the Central Bank of Nigeria. From 2010 to 2015, Mailafia was the chief of staff to the 79-member nation African, Caribbean and Pacific (ACP) Group of States based in Brussels, Belgium. He ran for president on the platform of the African Democratic Congress in 2019. He speaks with Nosa James-Igbinadolor on the economy and leadership

What is your response to the empanelling of the Economic Advisory Council by the president?

I think it is a welcome development. I wonder why he did not think of this in 2015. We have lost so much ground since in this country, but better late than never. Yes so, I warmly welcome the development. The team we have is a good one, an excellent one. They are all very excellent people in one capacity or the other or at least most of them. The chairman, Doyin Salami is a sound economist, so is his deputy Mohammed Sagagi, so we can all heave a sigh of relief as a country that at least for once we have decided to get it right under this administration. Now that is the positive picture. What we are not so sure about is that…don’t forget it’s an advisory council and you can only give so much advice and your principal might not listen to your advice and I hear in this case they would be reporting directly to the president, so I hope that the president will take on board their recommendations. That is just one thing; taking on board their recommendations isn’t the same thing as getting those recommendations implemented. In the case of Obasanjo and I hate to make this comparison, the reason why his economic team worked was that he actually empowered them. He empowered them to not only recommend, but implement. He gave them oversight responsibility over implementation, that’s why it worked. We copied this model from the U.S, where they have a Council of Advisers to the President and it works there because the president puts the whole machinery of government behind the council to make sure their recommendations once approved by the president is rigorously implemented. So really that’s where the nitty-gritty is, whether the president will take on board their recommendations and whether their recommendations will be implemented. As for that, we can only hope that the right thing will be done.

Do you think that the empanelling of the Economic Advisory Council is an acknowledgement by the president that the economy isn’t doing as well as it should be doing?

Well, I would imagine so. I don’t know when last the president went to Wuse market, Alaba market or Aba market and spoke to the traders there. I can assure him that if he spoke to them, he would be alarmed. This economy is going down precipitously and dangerously. People are suffering and there is hunger in the land. I hope for the life of me that he understands that we have to do what is necessary to accelerate growth because without accelerated growth, poverty is going to bite harder and with poverty will come insecurity and lawlessness. So, it is an acknowledgement but is he going to turn a new leaf and understand that we have to do things better than before. So, to be honest with you, I really commend the president for this decision and you know, even for local and foreign investors, it sends the right signals because you see, people make a difference and there are reputations that you can’t buy, either you’ve got it or you don’t. You can’t buy a sound reputation in the market; you can’t buy a sound economist or an administrator’s integrity from the market and you can’t fake them. So, I think he has put a good team of economic advisers together, what he needs to do is to empower them to perform by putting the whole machinery of government behind them. Look we’ve lost so much time and so many opportunities under this government, look at Ghana; they are just taking so many leaps and leaving us behind. So, we need to get back to work again. Again, there is not much a cerebral team of economists can do if they cannot look the president in the eye and tell him certain home truths, such as the fact that the level of insecurity we have in the country today did not exist even in the darkest days of General Sani Abacha. The level of lawlessness, the level of banditry, the level of impunity has never been recorded as it is in the history of this country, not even during the civil war. So, if he really wants a team that will help him deliver, he has to listen to them. You see, this administration has a big problem that will not allow them deliver, once you are critical, they see you as an enemy and that’s not how democracy works. Some of the people that love you the most are those that will tell you unpalatable home truth. Truth that people are dying, that there is a lot of evil and wickedness in the land, that there are things we must tackle if we are to make progress. We can’t make progress and have a sane and safe country if there is lawlessness. So, the president needs to put a grip on these issues and this will help build a thriving environment for business, for investments and for opportunities for the very talented youth that we have. You see, the country is basically hanging on the precipice. The bitterness that people feel because of the one-sided and private driven agenda of this administration isn’t going down well with most people across the country. So, against this context the economic advisory team needs to be sincere and look this president in the eyes and tell him that we need to run Nigeria like a civilised country so that we can have a chance to thrive before it is too late.

In view of the dire macroeconomic situation in the country which areas of the economy will you advise the economic advisory council to focus on?

Well, to be honest, there are many areas that need to be looked into. Firstly, there is a desperate need to diversify the economy away from dependency on petroleum. Secondly, they need to be able to balance the books, because right now the government has a revenue crisis on its hands and the debt situation is getting out of hand. And thirdly, they need to work on the expenditure framework. A lot of money is going down the drain and nobody knows what is going on there. It is not about having a yearly budget, it is about what the budget is achieving and the budget is not achieving anything. Fourthly, we need to work on the central bank. CBN has been invaded and impacted by some bandits. We can’t keep multiple exchange rates because it is just a drain pipe, what the Americans call a pork-barrel. We must fix it. There should be a single exchange rate and everybody must be subject to that single exchange rate with no favouritism of any kind. Fifthly, we need to create a competitive economic environment. Right now, we don’t have an economy that can compete for investments; we are losing investments to Ghana and Rwanda, investments that we cannot afford to lose if the government is keen on creating jobs and engendering growth. Sixthly, we need to work on our tax policy. In an atmosphere of slow growth, you just don’t increase taxes unless you want to kill the goose that lays the golden egg and it seems that’s what they want to do. We need to expand the tax base, not so much as increasing the rate. A lot people and SMEs are not captured in the VAT. Let’s not be lazy, let’s make an effort to expand the VAT net by bringing in those who are presently outside it. Don’t forget that a lot of the VAT paid by companies are not even remitted to government, so there are many ways we can be innovative in expanding the tax base and even double and triple the revenue and income that goes to government, it is not just by the lazy approach of increasing the VAT rate. Again, I reiterate that in a time of slow growth, you don’t punish businesses who are trying to keep afloat by increasing tax rate. It will make things even more difficult for those who are faithfully paying their taxes and trying to give to Ceaser what is Ceaser’s.

 Finally, and generally, the economic council needs to take bold steps to restore confidence. Confidence is not a quantifiable variable and yet it is the most important, because in this globalised financial market place that we operate in today, confidence, reputation and image matter more than even the nitty-gritty of figures and reality because what people feel and how they feel affects the behaviour of markets. So, we need to be able to offer confidence to economic actors. Once people know that there is credibility is fiscal and monetary policies, it is going to have a huge impact and, in that respect, we cannot afford our economy to be run by economic illiterates, but by those who are very economically literate and we should be empower them and allow them to do their work. You may not always like their message, but do not do like the Romans whose emperor used to punish those who brought bad news. So, let the president bite the bullet and do the right thing. Time will pass very quickly and we need this team in place and we need them to start working from yesterday.

What are your projects for the economy between now and 2023? Do you see any spark of light in the darkness?

Well, I do. I do not want to sound very pessimistic. The economic team in place is made up of very sound minds and if the president listens to them, then I think we have hope. If we manage our fiscal and monetary policies, governance and expanding the institutions of governance to deliver on their mandates then we will get it right. But my greatest source of optimism is the Nigerian people, especially the youths whose innate talent can be brought to the fore by great leadership. Poor leadership is our bane and dangerous private agenda as well as incompetence is what is killing our country. It’s simple: have a national agenda for the country, have a generous heart, be open minded, be focused, have a vision for the country and be bold and courageous in taking measures that will give a big leap to the country. That’s what we need.

I hope that the people in the villa have the mind to understand what is at stake. I hope they will be able to understand the correlation between the overarching insecurity and economic decline.

To tackle insecurity, we need to improve economic growth and opportunities for employment. Unless there is a mass based agro-industrial revolution that will employ the mass of the unemployed, then we have a problem in our hands.

Secondly and I have to be very honest, there is a general impression that the people in government have secret agenda. That is not good enough. You can’t be an effective leader that people will follow if you have secret agenda. All you want is the good of your ‘own people’ and you import people from Mali, Niger and Guinea and you force them on your own country and force others to accommodate these aliens that are being brought. Nigerians are not idiots. Nigerians are seeing everything and they can’t and won’t swallow that stupidity. It is only the people that are doing it that do not know that what they are doing is unacceptable stupidity. This is even especially so when the aliens that are being forced on other Nigerians ancestral lands have a genocidal agenda. People are watching and people will never accept it. If I come as a leader with a dark agenda that favours outsiders over my own people, then I’ve lost trust and lost legitimacy. So, tackling this insecurity requires transparent honesty including honesty of mind and honesty of purpose.

Of course you are not just an economist, but also a politician with aspiration for leadership. Talking about leadership, what do you see going forward as the prospects for good leadership that can lead the country aright? 

You know if you look at a country like Germany, like France or even the United States. In our country, somebody like Obama would never have a chance of making it to the presidency. His economic background would be a barrier. The system spotted a talent and believed the talent. The U.S, the heartland of capitalism was in a crisis and they needed an unusual leader and the system supported that leader. Our system has a structure that supports those who have stolen a lot of money, raped our treasury and accumulated war-chests of loot that they can use to buy positions and power so that people, who have worked hard and refused to defraud the government don’t have a chance even if we have the talents. We have structured our electoral system in a way that godfathers determine who gets what, when and how. You see the godfathers have a problem. Right from the military godfathers to the civilian ones, they are mentally retarded people and they will never allow anyone, who is intellectually endowed to come out because they fear such people and they will not be able to control them.

You know, I once read somewhere that in a community controlled by monkeys, even the best amongst you will begin to behave like monkeys so as not to get into trouble with the big monkeys. So, before you know it, the whole country becomes a heartland of monkeys in order to please bigger monkeys. You cannot tell me that in a country of great geniuses, these are all the kind of people we can produce as leaders. No, you can’t tell me that! There is a deliberate anti-intellectual culture by the political elite in Nigeria, forgetting that governance is the most intellectually tasking occupation on earth. The Chinese who have run the state for the last three thousand years will tell you that ruling a country is like frying small fish that demands the right amount and placement of fire, right amount of oil and right amount of seasoning. It is a metaphor for right leadership that demands right IQ and right EQ that is obviously lacking in good measure in Nigeria because people are afraid of telling the truth because telling the truth will deprive them of future appointments and future jobs. No, we need to tell our leaders the truth! Truth like the truth that a leader should not have either a hidden ethnic or religious agenda! The culture of leadership has to change, the language of leadership has to change. If you look at our comparators, India, Malaysia, etc, they are not our mates anymore. We have become a joke and a global laughing stock.

Everywhere we go, we are shamed, attacked and even killed.

You see, Awolowo once said that a country is respected by only two variables; the level of its economic prosperity and the quality and integrity of its leaders. These are the two things that give you respect in the committee of nations. On both counts we have been found wanting.

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