Dike Onwuamaeze
A former member of the Monetary Policy Committee (MPC), a respected intellectual and Professor of Economics and Public Policy, Prof. Akpan Hogan Ekpo, has expressed concern that the implementation of President Ahmed Bola Tinubu’s bold reforms in the spirit of “Renewed Hope Agenda” was resulting in untold hardship to millions of Nigerians.
Ekpo, who is a professor at University of Uyo, Akwa Ibom State, and former director general, West African Institute for financial and Economic Management (WAIFEM), expressed his concern in an essay he penned titled, “The Nigerian Economic Crises: Before It is too Late,” in which he stated that the economic philosophy that could ensure urgent recovery is developmental state economic blueprint, which implied the visible hand of government in economic activities.
The former Vice Chancellor of the University of Uyo said: “My concerns center on the pieces of advice given to President Tinubu in implementing his Renewed Hope agenda under the so-called ‘bold reforms.’
“The implementation has resulted in untold hardship to millions of Nigerians who were already suffering under the tenure of former President Muhammadu Buhari. The ‘reforms’ are not in the interest of the working people and other vulnerable groups.”
The economist pointed out that, “the private sector may reap some of the benefits from the current intervention by government. However, while the private sector is one of the engines of growth, it is not an engine of development. The primary objective of the private sector is to realise returns on its investment. Development is the main objective of government.”
He, therefore, advised that, “Tinubu’s economic team should not allow, as it is happening, businessmen and their various pseudo-organisations to become policy-makers. Their motive is essentially profit making and accumulation for themselves and their families by capturing the state.”
Ekpo stressed that, “the country’s problem is not from the revenue side if more taxable persons are brought into the tax net. In addition, if all the subsidies given to the rich are withdrawn and paid into the treasury, there would be enough revenue to run the government.”
According to him, “it is an open secret that an economy must not only grow double-digit but such growth must be sustained for at least 15 years to have a dent on poverty reduction. Growth is only a necessary condition for economic development. The Nigerian economy exhibits positive growth rates though less than population growth. The positive impact of growth on poverty reduction is very marginal. What is required is the implementation of concrete projects and programmes to move millions out of poverty. Market forces would not reduce poverty even in the long-run. In fact, market forces need poverty to intensify primitive capitalist accumulation.”
He added: “To have the intellectual class in poverty coupled with the already reserve army of the unemployed is dangerous for the country. Something must be done before it is too late.”
The economist surmised that the entire reforms of Tinubu’s administration rested on market fundamentals coated with neo-liberalism that would not solve the economic problems of Nigeria.
“It should be stated that countries such as those in Asia rejected neo-liberalism in order to leap-frog into sustained growth and development. These countries conceptualised, formulated and implemented home grown solutions to escape from backwardness and underdevelopment.
“The World Bank and the IMF have become too visible in our appetite for advice. Their one-size fits all policies must be rejected if Nigeria is to make progress.
“The Nigerian economy is for now not a normal one. For now, the appropriate exchange rate regime should be a managed float with emphasis on managed. Opening the foreign exchange market would result in distortions and shocks which the economy cannot absorb.
“The economic crisis requires the visible hand of government to restore recovery. The economy is sinking and reliance on the private sector and market forces would further deepen the crisis.
“The economic philosophy that can ensure urgent recovery is that of a developmental state economic blueprint, which implies the visible hand of government in economic activities.
“President Tinubu exhibited this in Lagos State when he fully supported and invested in the GSM network which is today’s Airtel. Today, the GSM is private sector owned but government was the catalyst.
“The present economic realities support a public sector led economy, which may later become private sector driven and/or a public-private partnership.
“A visionary and transformative leader must give the people hope. Let your administration, Mr. President, walk the talk through concrete action so that your “Renewed Hope” agenda does not become renewed misery.”
Ekpo, who was a former board member of the Central Bank of Nigeria (CBN), warned that the: “CBN’s autonomy is a sine qua non for macroeconomic stability,” and cautioned that, “amending the CBN Act to allow for a chairman of the board would create serious problems for the economy. There are several reasons why the CBN’s governor is also the chairman of its board. The economy is dynamic hence certain decisions on the monetary side of the economy like the exchange rate issue may require quick decisions.
“The board of the CBN should have very few politicians – same for the MPC, which is the engine room of the bank. However, the governor and it management team should deliberate on how best to involve the branches of CBN, which are essentially cash centers into policy making.”
He advised the CBN to exercise caution in requesting banks to recapitalise to avoid mergers and acquisitions, which would lead to further unemployment and uncertainty in the banking and financial sub-sectors in the short and medium terms.
