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.
