Mr. Asue Ighodalo recently ended his tenure as the Chairman of the Nigerian Economic Summit Group. He is a Nigerian lawyer and founding partner of the law firm of Banwo and Ighodalo, a corporate and commercial law practice in Nigeria. In addition, among several other board positions he currently holds, Ighodalo is the Chairman of Sterling Bank Plc. In this interview, he speaks about the Nigerian economy as well as his tenure at the NESG. Obinna Chima provides the excerpts:
Looking back through the number of years you served with the Nigerian Economic Summit Group (NESG) that culminated in you becoming the chairman, what would you say your greatest accomplishments are?
During our strategy sessions last year, we were able to look at where we are today at the NESG and where we think we should go; the sessions were quite revealing. We aim to evolve into a major think-tank independent of any party apart from our stakeholders. We will be a major policy formulating and influencing environment that will help shape public thinking on the direction we think the economy should be going. We will focus a lot on our research base; we are already working a lot on evidence-based policy formulation and we have also restructured our secretariat to be able to deliver that institutional framework. These are some of the things I am proud of and I see as the future of the NESG. The new chairman who was heavily involved in formulating our strategy going forward would take it and run with it. But to speak to your question directly, we achieved so many things during my four-year term as chairman; you will find more information in the green book published after every summit, its widely available. We have a policy innovation centre that we just set up where we do a lot of work with Bill and Melinda Gates Foundation and the MacArthur Foundation, looking at the social issues in Nigeria and how we can help our policy formulators to focus on these social issues. When this government came in and said they wanted to raise 100 million out of poverty, it was something we took extremely serious at the NESG. Unfortunately, in the last few years, it didn’t seem as if the implementation of those policies worked very well because we seem to have more people going into poverty. There is a combination of endogenous and exogenous factors. In the last few years, we had the pandemic, which unfortunately the world had never seen before. For the first time in living memory, movement of people was restricted, Covid-19 shut the world down and its impact was terrible on individuals and the world economy. The number of people we lost, economies and companies had to shut down, world logistics became totally dysfunctional and on the back of that the Russian-Ukraine war followed. So, the world has had a lot of massive shocks, a combination of all that and some of the things we haven’t done well internally put our economy where it is today. There is a lot of work to be done and I think the NESG will continue focusing on the things that need to be done.
Can you highlight specifically some of those policies under your chairmanship that were adopted and implemented by the government, and maybe some that still require attention.
Let me go back to the environmental roundtable where we worked with the National Assembly and other stakeholders to look at laws that affect business and investment in the economy. During this period, the Companies and Allied Matters Act and the Petroleum Investment Act were enacted, we worked with the National Assembly, Nigerian Bar Association and other stakeholders to ensure that we had fit for purpose laws. Those are examples of policies I am proud of. There are other policies such as monetary policy, fiscal policy and trade policy that we shared our input. Some of the suggestions we make to government, they incorporate. I think the problem is not so much about having appropriate policies, but more of the implementation process and I think that’s where we need to pay a lot more attention – both this government and whatever government comes into place next year. If you go into any government department you will see tonnes of documents that have policies, proposals, policies’ suggestions, many don’t get implemented for different reasons. Our focus should be on effective implementation, there are too many leakages in the system which don’t allow for proper policy implementation. There are too many subjective views and subjective positions thus we need to work on our public sector to make them more fit for purpose especially with the implementation of our policies. We continue to do our best through our policy commissions, through our annual summit, through usual and consistent engagement with government. One of the things I also tell people is that every government in power has come with his own ideas and manifesto and his own views on how he wants to run the economy. So, parties like us (NESG) can only help support that process.
What is your assessment of fiscal and monetary policy in the country and how best do you think we can improve on the relationship between both sides of the economy?
I think every government decides its own policy direction. And I will come back to what I said initially – it is an implementation issue. There will be some governments to whom inflation targeting is key; there will be other governments that will focus on interest rate and foreign exchange policy. Most times economist say you can’t do all at same time. So, for me, the key is really what is the position of the government and how well is it going to focus on this position to ensure there is achievement of the indices. I don’t criticise government for its philosophy because we choose the government based on what they say they can do. So, I don’t criticise any government based on its policy or philosophy. My criticism is on the implementation mechanism. We have too many gaps, too many leakages and lack of effective implementation. If we look at our foreign exchange policy, we can disagree with the monetary authorities, but whatever policy they decide on, they should implement effectively so that we’ll see the impact on the economy. You know I’d like to be liberal in my thinking and say that we all want a much better Nigeria. We all want a Nigeria that is a developed Nigeria, where peace and justice reigns; where we remove as many people from poverty as is physically possible. So, I start from that premise. Unfortunately, it’s not everything that’s been done that seems to suggest that’s the premise we are all on. But I start from that premise that anybody that’s in a leadership position always wants to do well and they want the best for Nigeria; that is why I said I’m not going to criticise any specific economic philosophy. What I advocate is that you must put in place the policies that would ensure the implementation of that philosophy in such a way that we’ll have a better country and a better economic environment. Again, one of things we’ve done at the NESG is to offer alternative views on how we think things can be done effectively and efficiently for the good of all us Nigerians.
If you go out there you see queues almost everywhere. What do you think is the way out of this perennial problem and what is your opinion on fuel subsidy?
You know I was talking to you about growing an inclusive economy and looking out for people that are really poor. Unfortunately, in other economies, they have social security nets. In Nigeria, there is no formal process by which we take care of the truly poor people. And I think the initial thinking for the subsidy regime was a way in which you could lower prices of energy used by our people such that the impact of high pricing doesn’t affect them. But when we are in a situation where we are spending so much money on subsidy, where our revenue, debt service and repayment is higher than the money we earn, we need to take a step back and look at how we can help those that require support and also ensure that we have a strong fiscal base. Those who manage our economy say the problem we have is a revenue programme, my feeling is that the way the Nigerian economy stands today; we cannot afford fuel subsidy. Secondly, we are subsidising petrol, who are the users of PMS? Is it the truly poor that are the users of PMS? So, I would remove subsidy and I would channel the gains of the savings from subsidy removal into different aspects of a particular infrastructure – health or education – those are the areas in which we can help the truly poor. So that’s what I’ll do especially when we are in a position where we are not doing very well. We can’t afford subsidy. If you are in a home and you can’t afford certain things, then you recalibrate and that’s what I will suggest we do. Government must have its reasons why it hasn’t done that yet, but with all economists, that’s one area that I think there’s alignment. All those who are economists agree that we can’t afford this. We need to look at other effective ways of help the poor. I think the problem of our economy is multidimensional. But one of the things we must resolve immediately, and I know government is trying its best, is the issue of security. There is no economy in the world that is under such major security dysfunctionality that can develop, grow and be stable. So, if we’re going to look at things holistically, we need to deal decisively with our security issues at every level. Then we need to look at our economy, what are the real issues? If I was going offer my own views, I will say it clearly that we have a lot more people that are unemployed, underemployed and not gainfully employed today than we had at seven or eight years ago. There are certain figures that we’ve seen recently that said that seven years ago, we had 68 million gainfully employed Nigerians, today we are only under 40 million. That is not a good indication. And you can link unemployment with insecurity. When people are gainfully employed, when people have things to lose, they don’t get entangled in these things that cause insecurity. So, for me, a major, major issue will be the issue of unemployment – job creation. How do we encourage jobs to be created? Who creates jobs? The private sector. How do you encourage the private sector to invest more in this economy? So, government must create an environment where it’s not difficult for private sector investors. Just last week a friend of mine who’s investing in the health sector sat in front of me and said ‘I just want to talk to somebody. I brought a lot of investment, my own money into the health sector in Nigeria and every turn is problematic. To get approvals, to even move medical equipment which is supposed to be zero duty to this economy, at every turn.’ Investment is like water flow. There are people that still believe in the Nigerian economy, that believe that we have a population that is one that will encourage investment and from which you can buy and sell. But if we have a population of poor people, they can’t even buy and those investments become a problem. And that’s why you see a lot of investments shying away from coming into Nigeria. So, I would support the private sector and encourage investments and part of that also has to do with monetary policy. If I’m coming into an environment where the minute, I bring my money into Nigeria it loses 50 per cent of its value, that doesn’t make sense. That’s why we need to have proper policy coordination. Our regulators should understand that they are supposed to be enablers; they are not supposed to be strangulating businesses and making life difficult for us. There are certain aspects of what our regulators do that suggests that they don’t understand their roles in an emerging economy, and they need to understand that. And we all need to be talking to each other which is also the essence of the NESG. Where do we or how do we attract patient capital into the Nigerian economy? There are trillions of dollars of capital in the world that are looking for where to flow to, but they are not flowing here because our environment doesn’t seem to encourage that. So, I’ll try and create an environment where that level of patient capital earning zero interest flows in here into our infrastructure development. I think what people just want is certainty, just policy certainty. They need to be able to trust the system; they need to be able to know that the system would work in a certain way. One other thing I would talk about is in my area. People also need to trust rule of law and our dispute resolution processes. There’s a lot of work to be done but I’m a very optimistic person. I’m really optimistic that with the right kind of focus, the right kind of leadership, and with the appropriate understanding, we can move Nigeria in a space of four to five years. We can reset Nigeria on a firm path to economic development. There are countries, such as Bangladesh that was in a bad place in 2010, Vietnam was in a bad place in 2010. Those countries are changed countries now and that’s in a period of 12 years. So, I know with the entrepreneurial capacity of Nigerians, with focused leadership, I know that Nigeria in 10 to 15 years can be a totally different country. A major part of our problem is that there is no sense of being Nigerians. There is a sense of being Ijaw, of being Igbo, but there is no sense of being Nigerian among us. We must create that sense. Once we create that sense of being Nigerian and we don’t think it doesn’t concern us, or we don’t benefit from it, then we may have a different country. The duty of our leaders going forward is how do we forge a national consensus and the true spirit of being Nigerians? I envy the Americans sometimes when they say I’m an American. The Americans believe that the state is there for them; that nothing will happen to them and that they will be protected by the state. And with that, they are committed and realistic. And it’s like that for the Israelis too, even the Egyptians. Like if you go to Rwanda post the genocide, everybody is nationalistic. So, maybe what we need to do is work on our national psyche. Let’s be Nigerians. It hasn’t been achieved since 1914 but maybe we should start the hard work now and see how we can achieve it. With that, it is easier for us to absorb all these policies that can be painful in the short-term, so as to get a longer-term benefit.
There is a recent report by the NBS. You’ve spoken so much about poverty. 133 million Nigerians are said to be in a state of multidimensional poverty. How do we reverse this trend?
People are poor because they don’t have money to feed and money to meet their daily obligations. You don’t have money because you don’t have work or you don’t have the kind of work that can give you the level of money that will take you out of poverty. So, I’ll go back to job creation. We need to be able to create an environment where we create more jobs for our people. Which aspect of our economy can employ the most people? Maybe agriculture. Maybe, because agriculture is becoming technologically important now and the more technology, the less people will be employed. It may be agriculture; it may be trade. Whatever it is – it may even be manufacturing – there’s no country in the world that is developed without a strong manufacturing base. So, we need to focus and sit down as a government and review our direction for job creation and ask, how do we achieve it? How do we do encourage our private sector to invest in different aspects of our economy that creates more jobs and how do we educate our people to be fit for purpose, to be able to work in these areas? We need to keep on creating jobs, be it in agriculture, manufacturing, services, be it in trading; just look at that area of economy that creates the most jobs. Then we need to get into our rural areas. How do we encourage the economy of our rural areas? I have a personal project in my village, I set up a micro-credit financing for certain amount of money to empower widows and women for trading and for their farming. People apply, they have the loans for six months or one year and they can reapply with a minimal interest charge. So, what we need to do is just help the rural areas and then we start looking at when we bring out the products from rural areas, do we have the roads that can take them to where those products are needed. And how do then start adding value to those products. If we pay attention, we’ll be amazed at the level of jobs we would create. For me, the important thing for this economy is job creation. Let’s create jobs as much as we can. Let’s support people who want to start their own vocation, their own ventures. That’s what we need to do. And when the government is crowding out the private sector from financial support and financial availability, then that causes its own problem. People that want to start their businesses or want to invest in their businesses do not have the financial wherewithal to do so and they cannot to turn to our financial institutions because they do not have the resources. For me, I think Nigeria is not a difficult country to rule. Nigerians need to be able to trust leadership, they need for you to not say alone, but do, and they’ll follow you when you do. But if you say and do differently and distrust comes in, that’s when Nigerians start losing faith in leadership. But once Nigerians haven’t lost faith in leadership, they follow their leaders. If you look at Nigeria’s history over the years, you’ll see that Nigerians are probably some of the easiest people to rule. I think what we need is leadership that loves the people. Once we have leadership that loves the people and the people know that they are in position of authority and power for a period of time to contribute their own quota to the development of their country, then it’s easier for us to achieve greater things.
So, what do you think would be the low-hanging fruits for whoever becomes Nigeria’s next president?
There are many low-hanging fruits, but I’ll tell you a few. One of the things that we seemed to have lost is trust and understanding of our capacity. So, the new government should quickly set up a strong team; a strong advisory team so that certain key offices of states should be made to be manned by people that have the track record regardless of whether they are politicians or non-politicians. And there are great people on all sides of the divide – civil society, political class, democratic class, business class, academia. For everything, let us just look for the best possible persons within the confines of the constitution. Let’s look for the best kind of persons possible so that we can formulate those policies and implement those policies that would move us out of where we are. We are not in a very good place as a country, but many of us are truly optimistic that with just a bit of tweaking we can do so much better. So, my first low-hanging fruit is a strong team. The new government comes in with a very strong team, a focused team, with the determination to work in the best interest of Nigerians. Then there are all those other policy issues. I would remove fuel subsidy if it’s still in place so that we can transfer the resources and locate them to areas that would help grow the economy. This fuel subsidy is not doing anything for us. We are losing so much money and it’s not helping the development of the country in any way. I would converge the foreign exchange rates. The issue is not really the level of the exchange rate, it’s the stability of exchange rate. For investors and for people that are participating in this economy, it is the certainty and stability. I will look at how to have an exchange rate regime that is stable and certain. You know multiple exchange rate regimes just benefits a few people. It doesn’t benefit our economy on the whole.
Those are three things that could be done immediately a new government comes into place. You know it takes time to look at other things and then start looking at where we can help. Maximum work needs to be done on job creation. We need to be able to work on creating an enabling environment. We must deal with our security issues. People don’t want to come and invest in an area or an environment of unstable security, or insecurity. Our people are not farming as hard as they should because they are afraid of going into the farms. People don’t travel as easily as they should do because they are afraid of moving from one place to the other. Not to talk of bigger issues like Boko Haram, Niger Delta militancy, see how much money we are losing from theft—whether it’s ground theft or sea theft. The combination of both of them will cost a lot of money. See what revenues we could have been able to harness for the country if that level of theft was not in place. We’re the only country in the world that’s an oil producer that didn’t benefit from the high oil price during the Russian-Ukraine war. So, there are many things systemically wrong that we need to deal with and can be dealt with. Anybody that comes into government in May 2023, actually needs to roll up their sleeves and start looking at what is in the best interest of our country.
What is your outlook for 2023?
I’m optimistic about 2023. I’m not as pessimistic as many people that say ‘oh, we don’t have good candidates.’ I’m one of those people that believe in making lemonade from lemon. Whatever you get, you see the best you can do with what you get. There’s a lot of good and some people say not too good in all the candidates we have. But I think that we can make the best out of our candidates. One of the things I’ve always told people, and if you remember some time back people were joking about, ‘oh, it’s not the leader that’s bad, it’s the adviser that’s bad.” I can tell you the other way round. Leaders that have great advisers and listen to their advisers and take directions from some of what their advisers are saying once they are good advisers, would always do well. History and experience from other countries are replete. Some people that we consider to be great personalities themselves, have been surrounded by strong and great personalities who have turned their countries around and have done well as leaders. What I’ll be looking for –and I’m not critiquing any particular person or the other — but what I’ll be looking for as we go into the polls in February, I’ll be trying to look at people’s antecedents and past records and in combining that, I’ll be asking myself the question, “which of these gentlemen if they get into position will use good people and will listen to their advice? Will not make themselves captive of the usual leadership cabal that we have in Nigeria? Who will love Nigerians and want to work for the improvement of the country and a better Nigeria? So that’s what I’ll be looking at. That’s going to be my comparator for them. These (presidential candidates) are what we have. How do we get the best of what we have? Who will form the strongest cabinet of Nigerians that know what they are doing and love Nigerians and will help grow the economy, help create a Nigeria where no one is oppressed, and we are all happy. You know there was a time they used to say Nigerians are the happiest people in the world, I think that’s a long time ago. We must remove poverty from our system, create more jobs and ensure that we have an economy that is ready to grow at double digits. It’s not impossible. If we have a population growth rate of nearly three per cent, to rebalance, we need to be growing at about nine per cent. It has been done before. Between 2002 and 2008, we were growing at an average of nearly seven per cent. Now, if we had continued at that growth rate and improved on it, you don’t want to imagine the level of development we would have had in our country today. If we can grow at that growth rate, I can promise you that in the next 10 to 15 years, we’ll be a different country. If you remember, around 2007, Goldman Sachs and the major world institutions, were looking at Nigeria as being one of the top 20 economies in the world by 2020. That means they had projected that if we had continued growing at that rate, by 2020 we would be one of the top 20 economies in the world. So, what went wrong? There was a disconnect between 2008 and today, what we should do is to take the lessons. Like I said, I don’t want us to dwell on the past, for me the future for Nigeria is bright. When a number of young people come to me and tell me they’re leaving the country, I tell them that I can understand their reasons for leaving the country, but I don’t think it’s the right decision. But it’s difficult to tell any young person that thinks they are a world citizen not to leave the country today with all the problems we have, but i keep telling them. I’ve had nearly 30 of my staff leave to go to different countries in the world and I keep telling them I don’t think it’s the right decision, but I can understand. Few years ago, I would tell you that I don’t understand, that I don’t think it’s right, but today I say I can understand but I don’t think it’s right. It will take a level of immense courage to be a global citizen and not take your chance of leaving Nigeria because life is hard. People leave home at 4am, and get back home at 1am on a daily basis. And I tend to look at our leadership and I say you know you can solve this problem of lack of effective transportation, even congested roads you know, with a bit of thinking and a bit of imagination. But for some reason, we don’t get that level of thinking or imagination from our leaders that can solve this problem. So, I think there needs to be a lot more thinking in government and a lot more consideration and love for our people. So, what we need is more true servant rulers. What we seem to have today are rulers.
Finally, after the NESG, what next for you?
I’m in my law firm. One of the things we set out to do when we set up our law firm 32 years ago was to create a law firm that’s definitely one of the world’s best. So, now I will work harder. Now I will have a bit more time. When you are the board of the NESG and definitely when you’re the chairman, it’s a lot of hard work, plenty of hard work, particularly when you have specific objectives you want to achieve. Our secretariat is working 24/7 and as the leader, you have to support the secretariat fully. Sometimes I’m here at work and i will just get a call that we have an urgent meeting tomorrow. Whatever it is I’m doing, I have to move my calendar and arrive there. It’s difficult and you’re think-thanking, you’re collaborating and talking with your colleagues, you’re working with different policy commissions, they are reviewing what has been done, you must be up to speed. So, it’s tough work but I tell you, it’s been one of my most fulfilling roles as an adult. The part that you can contribute to policies that can move your country to the next level, whether accepted or not. One of the things that I keep telling people is that from the beginning the NESG was formed because we wanted to create this bridge between the public and the private sector. Our founding fathers saw that the economy was in bad shape and one of things that we needed was to have a bridge between the private and the public sector. That was why the first summit was convened in February, 1993, by Chief Ernest Shonekan, when he was head of the interim government.
From that time till today, there’s certain policy recommendations that we made that have turned into law and have actually turned part of our economy around; we are responsible for the growth of the economy particularly between 2002 and 2009. If you recall before 1995, the foreign exchange in Nigeria was totally strangulated. We had the 1962 Foreign Exchange Act before 1995, and then you couldn’t take money out of Nigeria. Anytime you needed to take money out of Nigeria, you needed a Central Bank’s approval; there were all kinds of strong restrictions. Based on the advice of the NESG, there was a total deregulation of foreign exchange in 1995. The same thing with foreign investment. Remember, there was a time in this country foreign investors couldn’t go into certain areas of the economy, or they couldn’t go into more than 60 per cent or 40 per cent, but we totally deregulated based on the advice of the NESG in 1995. It helped with total deregulation of the investment framework and that’s how the Nigerian Investment Promotion Commission was established. And then privatisation. We worked on Vision 2020, we worked with the government on the ERGP, the PIA, power sector and different areas of the economy in which we have had massive change. There has really been nothing more fulfilling.
