ECONOMIST PROPOSES NIGERIA NEVER HAD AN ECONOMY

Dr Chukwuma Agu of the Department of International Studies, an economist of wide repute, has asserted that Nigeria never had an economy. Agu also referred to the present ongoing economic crunch and naira crisis as history repeating itself. He made these bewildering remarks at Finotel Hotel, Awka during the paper presentation in a 2 day Economic Summit organized by Voice to the People Project in collaboration with Anambra state government.  Telling it like an intriguing story, the doctor of economic philosophy left all Anambra major stakeholders in attendance fired up with full coloured mental pictures of an Anambra that could learn from history, see the present economic situation as a blessing in disguise and properly harness both her human and physical resources towards economic emancipation and financial freedom. Agu said that doing thus portrays Anambra as truly the light to the rest of the 35 states of the federation.

Citing history and in-depth research results, Dr Agu, who also has been appointed by Anambra state’s executive governor, Chief Dr. Willie Obiano, as the chairman of the Committee on Internally Generated Revenue, illustrated that Anambra state is living far below its potentials. Chukwuma went ahead to show that this is because there is lack of synergy between government and the private sector. Agu noted that though change is here, it is not the kind of change we applied for. He therefore said that though he is not opting for Biafra, Nigerian Federal Government does not have the solution to Anambra’s economic problems. He further demonstrated that the Igbo region has not helped themselves.

Going back to what he referred to as “the story that would not be told”, he contextualized the present situation, positing that Nigeria had gone through this stage before but mismanaged the opportunity. That was when he said that what people are calling economic crisis is an opportunity if we want to utilize it.

About ten years ago there was a boom in the whole of Africa. And both the IMF, the economists, the UN started clapping for Africa. It was hoped that Africa had finally arrived. In Ethipia, the Chinese made massive investments. It was thought that Africa had finally found the magic for growth. contrary to the trending thought, the economist wrote a paper saying that he was yet to see any country that got developed as a result of natural resources. That the structural foundation needed to be able to grow Africa on a sustainable basis does not yet exist. Agu noted that though Nigeria receives a lot of money in Foreign Direct Investments, the whole money goes into exploration and exploitation of natural resource. He observed however that unfortunately most countries that had grown in the past had been able to transit from natural resources to industries of finished products.

At this point, the economic sage outlined certain problems with dependence on natural resources. He said that natural resources are always in an enclave as only two percent of the people that own it, enjoy it, the rest don’t. therefore when government begin to give a inordinate or disproportionate attention to natural resources, it disenfranchises a large portion of the population.

In a nut shell, he said that the crash is as a result of this, all over Africa. He noted that we had never really had an economy and that oil was used to cover our nakedness and that today, because oil price is low, the capacity of the central bank to support the naira is weakened.

He revealed that whereas the state has 3.5 billion as her internally generated revenue, she is owing about 14.1 billion. He noted that a large percentage of the debt is owed to commercial banks with short term interests and short term loan and volatile repayment terms. He then explained that many states were declared insolvent; unable to take care of their day to day responsibilities, and that was why the federal government gave out the bail out money that went on the news recently. He then pointed out with dismay that giving the money was a mistake as the money was not targeted on anything that would produce economic value butt on settling bills used for consumption. He then projected that the end to the dismal economic situation is not in view. He noted that restructuring is almost impossible as the capital to achieve that was not saved for.

Agu drew illustration from the “coal” experience that used to be very valuable but today is of no use. He projected that because there is a great investment in alternative means of powering engines, a time would come when crude oil will be as coal. He noted that given that the present budget runs a 40% deficit when it used to run 5%, with reduction in the value of the naira, the deficit widens. He also noted with dismay that Nigeria, compared to other countries, has very low funds in her reserve and therefore cannot withstand economic shocks.

He also pointed out from CBN report, that South East, compared to other parts of the country, receives the lowest in revenue from the federal government. He said that despite this, south east is not doing badly and that is because of individual effort and not the government.  We are doing better than most other regions in electricity and water because of private input. We dropped so low in secondary education and even further in tertiary education,” the economist illustrated using a statistical drawing from a research work. Agu said that we are not doing enough to give enough incentives to the young ones to love education. In his words,“if it takes putting Airconditioners in a school to encourage children to attend, we should do it. We need to be deliberate about investing in our young.”

He said that the reason our children are not enthusiastic about formal education because they keep seeing graduates after five years existing like vegetable and living on handouts from their uneducated trader mates. He observed that given that they are ambitious, they shortcircuit the trend and go for trading. There was also evidence that the south eastern states have a big gap between per capita tax and per capita income. This he said is because the middle men between the entrepreneurs and the government, namely, tax collectors, do not allow most of the money collected get to the government. In his words, “Unless we dismantle that man standing between the government and the people, we won’t go so far ahead.”

Speaking on the continued low expenditure on agriculture, the keynote speaker reminded Ndigbo that the civil war was lost as a result of hunger. This was because, given we depended on importation for our basic dietary needs, when there was a blockage as advised by Obafemi Awolowo, the finance minister in 1966. At this point, Dr Agu observed that given we are still landlocked without a standard sea shore or airport, the radical call for Biafra cannot be pursued militarily with success.

Agu also decried the deplorable state of our health sector because it is not getting enough attention. “There is a particular hospital in Aba; if you go in as a pregnant woman, you are definitely coming out a corpse…all because we are not investing money in areas we ought to.”

He also frowned at the fact that we in the east are also not taking advantage of certain programs meant for our benefit, such as Agricultural Creative Guarantee Scheme Fund, ACGSF, a federal government project where money can be issued guaranteed by the central bank so that if you can’t pay the money, the central bank will pay. He revealed that it is with this money that the northerner invest in agriculture thereby supplying us most of our food items.

The economist also went ahead to expose why Nigeria remains stuck in growing debt. “We mostly use the money borrowed on consumer goods, oil and gas, and general services; thereby wasting the whole money, gaining only increase in corruption, brain drain. Our agricultural practice remains as crude as it was centuries back.” He also revealed that we use half of our revenue on servicing debts.

Reading with the eyes of an economist, the economist predicted that in the days ahead there will be massive unemployment, a lot of macro instability with inflation likely to escalate, a total crowding out of the real sector.

He said that we have two choices in the situation; repeat the mistakes of the past or do it right this time. Referring to the past, Agu said that when this kind of situation was encountered, the first thing the government did was to shrink; they started laying off and started reducing the sectors that government should invest in. “That was the period they cut off educational subsidy, agricultural and health subsidies. Most of the problems we are seeing now is as a result of the sudden cut off of subsidies in them.” He said it would be a mistake for government to shrink now and suggested that, rather, government should invest in areas of high returns.

He also decried the practice of poverty alleviation and hand outs saying it always makes people lazy. He said it is an insult to south easterners who, according to him, are not structure to live like that. He rather suggested building industries where the people can work and earn wages based on the value they have added.

The philosopher criticized the individualistic trend in our business practices and advised it would be better if we borrow a leaf from institutions like Shoprite, Hyundai motors, and build institutions. It was at this point that he frowned at the way the government bought her shuttles from india when he had a brother that produces motor vehicles – Innoson motors. He intimated that what made Toyota, Hyundai motors and some other international firms so great is because their governments and people have understood and harnessed the power of collective effort. “No matter how wonderful several individuals’ effort can be, one institution of collective efforts dwarfs them all.” He then advised that government should start investing in big players like Innoson motors. The government should call research and development to help such big players so that they develop into institutions, he admonished. This he said will increase their employment capacity and making them multinational firms. Agu at this point suggested that a table be provided where failed businesses and problems of businesses are recorded. This he said would help the government know and address their problems. He said that this approach would reverse the distrustful and antagonistic attitude of business owners towards government. “You need to recognize the power of organization and the organization of power.” This, he said, is what gives the north an edge.  He also proposed that as dollar prices imported goods out of reach for the larger number of the middle class, the state needs to increase their capacity to supply the alternative products. In the light of this, he proposed building of big shopping malls like Shoprite. The economic philosopher ended by saying that we need to start celebrating impactful individuals so that the children can adopt the right value system. And thus did Dr Chukwuma Agu lay out the blueprint for firming the economic foundation for a more prosperous Anambra state.