Dr. Kalu, the chairman of the Institute for Policy and Economic Development was Born in August 14, 1939 in Ebem, Ohafia Local Government Area of Abia State. He was educated at Kings College, Lagos. He holds three degrees in Economics and Public Finance and is a Yale Stimson Fellow. Over the past four decades, his works in the field of economic policy and development planning has spanned many regions in East Asia and Africa. He has participated extensively in research work on developing countries and has lectured at the university level. While at the World Bank’s East Asia and Pacific Programmes Department, Kalu contributed significantly to micro- and macro-economic work on the economies of Japan, Korea, Taiwan and Hong Kong.
Dr. Kalu joined Skoup & Company Limited as head of the economics division. During his tenure, he directed major studies covering both industrial and agricultural sectors including oil, LNG, steel, petro-chemicals and agricultural infrastructure and credit.
Apart from the aforementioned, Dr. Kalu has held many ministerial positions in Nigeria, including Commissioner for Finance and Economic Planning in Imo State, Nigeria; Federal Minister of Finance under two regimes; Federal Minister of National Planning and also Federal Minister of Transport.
Over this period, Dr. Kalu has served as chairman in numerous institutions such as ECOWAS Council of Ministers, African Development Bank, Council of Economic Advisors, Centre for Advanced Social Studies (CASS), Port Harcourt, Nigeria — and as a member of the Development Committee at the World Bank. Dr. Kalu had played leading roles in the formulation of Nigeria’s economic reform policies.
His role in Nigeria cannot be overemphasised. As a great scholar, he helped to lay the basic foundation for Nigeria’s policies of economic liberalization, globalization and privatization. He also represented Nigeria at various world conferences.
Though currently back in the private sector, Dr. Kalu frequently engages in the formulation of policy at both the state and federal levels in Nigeria. He was designated Nigeria’s candidate for the Deputy Director General position at the World Trade Organization (WTO) in 1999, and later appointed as Ambassador Extraordinary and Plenipotentiary to the European Union (EU) in 2000. Recently, he was appointed to serve as an advisor on a special Niger Delta Technical Committee to find a final resolution of the Niger Delta crisis in Nigeria. In January 2012, he was appointed to chair the Federal Government’s Special Task Force on the Nigerian refineries.
Currently, he serves on the board of several organizations both within and outside of Nigeria. Most notably, he is the chairman of BGL PLC; an investment bank that is a major player in the financial market and is well known in the public sector in advisory and private sector consultancy. Dr. Kalu’s work and contributions are regularly referenced in current economic and financial publications, magazines, and newspapers. Dr. Kalu, though not a card-carrying politician, continues to be pro-active in the Nigerian political-economy arena.
In this exclusive interview with our South South Bureau Chief, Mr. John Oghojafor, in his country home, Ebem, Ohafia, Abia State, he spoke extensively on measures the government can adopt to lift the country out of its present economic predicament, among other national issues. Excerpt:
The Minister of Finance recently raised the alarm that the country’s economy is in recession and added a caveat that it is just for a short time. Is the Nigerian economy actually in recession? And if so, what are the impacts on the common Nigerian in the street?
We can use a very blunt analogy. You, like me, are almost bald. It’s like the two of us discussing what style of hair we want to cut. Countries that complain about two negative growths in two quarters and that they are in recession, are countries that have railways, they have steel mills, they have roads, they have shipping lines, they have all sorts of things that we don’t have. And the issue might just be that some of the things they are exporting, the demand for them drops and they are dropping their workers. Their factories are there and the raw materials are there, but it is just that the demands have dropped. Or, the taste for their products just changed and what they were selling they could not sell again. We in Nigeria are not even near there.
Our problems are so much of structural deficiency, the basic structures are not there to start talking about recession. So, if I say in recession, workers will be laid off, workers are already off. Those who worked before were not paid, those who are working now are not being paid. Salaries are not being paid. What more recession can be worse than that? So, it sheer sophistry to start talking about whether or not we are in a technical recession. It is a symptom of lack of understanding. Structural problems here outweigh the condition where we start talking about fine-tuning. We are not in the realm of fine-tuning. As I said, it is like a bald man discussing the style of hair he is going to cut.
Four years or so into the privatization of the power sector, it is still comatose with generation hardly above 2,000 megawatts. Yet the operators are insisting on higher tariff. You were a member of the think tank committee set up at the inauguration of President Buhari and its report contained some recommendations on the power sector.
It was not the only committee that was set up. There were about three committees. Dr. Christopher Kolade was the chairman of our committee and I was the vice chairman. I had written a report before on privatization and commercialization. Now, there are four key areas which I emphasized that are strategic to the success of the privatization of the power sector. And these are the technical expertise, previous experience, finance and strategic plan. At this point in time, the power sector is such a key sector because it affects everything. It is like blood in your body. So, get those who know the business and quickly review existing contracts and only make adjustment where it is required. For some, maybe they underestimated or over-estimated, but otherwise, if they are technically competent, you can help them. For others who are non-starters, because the issue is that those who are going to vet should have no vested interest so they can look everybody in the face and say, “look here, you have had it for two years, what have you performed? We hear you are running around Chicago looking for somebody to take it over from you.” You can just tell him, “ok, just forget it”. But if you thought he made effort, you can compensate him a little bit.
Get the people who know the business, they are all over the place. They don’t have to come from Enugu or from Kaduna or from Abeokuta – they are all over the place. And when they come and they are doing it right, all those who are interested in that sector can now buy into it as the thing is growing. Not those who will take it over and the thing never grows. So, those who want to invest cannot invest because the thing is just moribund at the level where it is operating. Vet quickly and move forward. To privatize means you turn it into the private sector. Government should have no business allocating millions upon millions to it. They (investors) should know how to mobilize funds because it is supposed to be a profitable enterprise.
And now that you have to go forward, you are talking about tariff. They are taking the tariff issue out of context. By the time you are start talking of tariff, you are talking of level of credit inefficiency and the cost at which they charge, how much that charge is below their cost? You have got to relate it to the efficiency of production, to the cost of production and a margin for profit which is normally dependent on the current rate of interest. If you can’t cope with it and you want where you will be making 40%, then give it up and move to another sector. You can’t come to power and want to reap the kind of profit you reap in other sectors. I’m just giving that example, am not saying it is not possible. But the profitability of power depends on the users of power. Industries have to be growing, agro-businesses have to be growing, the household sector has to be buoyant, that is where you can reap the profit in power. You can’t see a doldrums’ in industries, in family incomes, wages and salaries, then you just go and start increasing tariff.
Diversification of the Nigerian economy has been in the front burner in recent times due to the dwindling fortunes from oil. Some are suggesting agriculture and mining as ways out. What is your take on that?
I have spoken about this severally. See, we talk about diversification as if we are trying to invent something. There is nothing we are re-inventing or inventing by talking about diversification. This is the thing that should be going on naturally because we are at such a low level in production. Not only low level in production, we are still at the basic level in valorization; valorization in the sense that you produce, you turn it to another product and you change it to another product. It is not just value chain but product chain, from oil you go into aromatics, into pharmaceuticals, and so on and so forth. Here, we have oil and gas, what did we do with it? We couldn’t even diversify because we wasted the funds, our educational system collapsed, we had the wrong people in place. I mean, you can count ten different factors. Diversification should be a natural product of your policies, as you are encouraging different levels. And of course, it is being dictated by changes in demand and the structure of demand. So, you need to know that you can’t just be selling palm oil and palm kernel, you need to move into soap, you need to move into perfumery, you need to move into all kinds of greases and all sorts of things. The same with gas, the same with oil, the same with wood, the same with cocoa and the same with cotton.
So, the issue has never been diversification, the issue is the right leadership, the right management and the right incentives to make people who are moving into the business sector to decide their niche and produce where they can make money and where they can create new products and so on. That is the problem. It is not like we just wake up one morning and say we want to diversify. We have been diversifying, but we didn’t put money, we didn’t put technology, we didn’t put expertise, we didn’t put the scale of economy behind them. So, you can imagine a large economy like Nigeria, we should have been so much more diversified as to be creating new products and creating high quality higher products. And of course, when you do that, you are solving so many problems – employment, skill utilization, creating new products and increasing your export basket. You can increase your import basket at the same time but you are also supporting it with a bigger export. So, it is not just import substitution as some people would say we are into export production now we should do import substitution, no. Those two go together, there is no dichotomization.
You are aware of the recent activities of militants in the Niger Delta. When you take that side by side with what is going on in the North East, talking about Boko Haram and then the protests from the South East, some are saying they are signs that the country is due for restructuring. Do you support restructuring?
Well, first, let me say that the flames that are burning all over the country suggest that we had very poor leadership up to now. Two, if people say they want restructuring, it may not necessarily be the most proximate issue. By God, they have every right to say, “let’s sit together we want to restructure”. I have been part of it, I have been involved although I was not at the National Conference. I have my own ideas what we need to do. I believe that we have had cleavages of all sorts, problems of all sorts, emanating from different nationalities. That is natural. But at this point in time, if we really need to restructure, let’s go for the real thing. What do I consider as the real thing? We are not restructuring to create an advantage here and disadvantage there. Let’s decide to build a modern nation.
Let’s create the structures that 50 years from now people will say, “my God, this is a modern nation”. We don’t have one now. What do I mean by that? We should go back to the local government. Let’s have the kinds of local governments that have responsibility for meeting the basic needs of their citizens within that local government. They are to be financially empowered, technically empowered, politically empowered and institutionally empowered. In terms of size, we can take a minimum of say 650,000 to 750,000 population size for each local government. This is because it will vary depending on the density and so on and so forth. Now, if you divide the country into 650,000 to 750,000, the number of local governments will drop drastically to about 300 to 400 instead of the present 776 local governments. But within those local governments, you can stipulate the kind of level of expertise that people would have to possess to be there. So, when they mobilize their funds or get whatever additional funds, there are people who can sit around and plan meaningfully to provide basic amenities, water, primary education, roads, basic security, etc.
Your intent is not ‘Yoruba says this’, ‘Hausa-Fulani says this’ or ‘Ibo says this’, you are saying you are looking at a modern Nigeria emerging. Those who live within those local governments are empowered politically like we had. That is what we had, it is not like something from the blue. That is what we had. If you want to be a mayor in Warri, whether you are from Zaria or from Ogbomosho because you lived there and people like you, they will support you to become a mayor. If you are a retired engineer or a doctor, you can be employed there, if you are a teacher you can work there. Whatever skills you have, you can work there, your children can work there. If they want to move away they can move to another local government and they are also citizens there.
With the unit of 650,000 to 750,000 you will redraw that map. After you redraw that map, that is the permanent restructuring that you really need. You can then go further. By the time you divide these into states, you may end up with 25 states, perhaps 30 states; it may not be the present 36 states. By the time you get there, if you want to call them regions or zones or whatever, you can carve out five, six or eight and then you have the centre with those residual powers such as foreign affairs, military, standards, etc. So, they are clear what should be at that level. I’m not just talking from my historical perspective. If you divide the local government as I have said above, you will find that each area has a lot of resources – solid minerals, grains, oil, gas, wood, name it. They have the engineers, they have the doctors, they have the technicians, they have the skills in terms of the quality of leadership to look in and say “how do we develop this local government?” And when you get them viable, of course the states will be viable and the region will be viable already by determination.
To me, you are not going to be talking who is in charge, whether Hausa, Yoruba or so. Whoever wants to live there let him live there. When you carry this out, over time, you will be reviewing this demography to make way for adjustment. Of course, it is not going to be permanent. That is how modern states are organized. So, if we are talking about restructuring, let’s go to the local government. Let’s stop talking about ethnic wahala and religious quarrels. Let’s go to the local government. Let the current government take it and throw it and say “this is our own view”. You take it and review what you got from the national conference and the people would say, “thank you sir”. They will go and face it. However long it takes them, if they ever agree, you know that a modern Nigeria will emerge that will now remove all these problems of tribalism, creed, religion and so forth.
Before, I led a group in Lagos, Ileya, we were exchanging meat in Christmas; we were exchanging rice with everybody. Let’s restructure back to that era where Mallam Umoru Altine, a Fulani, became the first mayor of Enugu City, where somebody from Orlu would be mayor in Port Harcourt and so on and so forth. That is the restructuring we should be going for. Right now, we are avoiding those issues. We are trying to restructure and we are talking about indigenes — Ibos, Yorubas, Hausas, this and that. See, I believe in cultural value and cultural growth. But that is more relevant when you need to do your cultural festivals. But that must be taken out of governance. Governance is for those who want to serve. And you have enough resources not to be swayed by what is happening elsewhere. By the time the number of states is down to 25, 27 or 28 and of course as you have access to international relations, international capital, then you can mobilize and give credits, give allocations to do joint projects like reading library. Railways will not be handled by local governments, or even a state. Those joint projects, yes. The centre can come in and when they come it has to be by discussion with the states and the local governments. That is the restructuring I’m talking about.
What is your assessment of the Buhari administration in terms of security in the country as of today?
Well, I don’t like talking about pass mark or no pass mark. But you can see that, at least, tension has reduced. You see, I was particularly happy about that because it pains me for people to continue to accuse the leadership of being behind Boko Haram, this and that. But have they sat with the man and talked with him? I may not know everything but I think, I felt happy that I can still say “yes, my original hunches are correct”. I heard him (Buhari) discuss the Caliphate or Boko Haram, or all these ISIS on world television, on CNN with Amanpour and I thought he was speaking his mind the way he was talking. But there are people here who are bent on sticking to their own ideas, “they want to dip Koran in the sea”, “they want to conquer this”, “they want to do that”. I said “see, the way you do that, the law should operate, you take the person to court. This is not in the Constitution, this is against the human rights of people.” Let’s not keep putting ethnic interpretations into a lot of these things.
As a follow up to your assessment of the security situation, what do you make of the prevalence of the Fulani herdsmen attacks on hapless farmers across the country?
It is totally unacceptable. It is an aberration. It is a mark of lawlessness. It is a mark of lack of control, like we have no authority in the land. We don’t go by the experiences of other people. But in other countries, if one person is killed without explanation, the presidency gets involved, the head of state gets involved, the governor gets involved. But here, you have people slaughtered and we get the impression that they are not given the attention they deserve. Okay, as I said, me, I always reserve judgment because I say, well, you and I don’t know exactly what somebody is doing or not doing. We can only act on what we saw in the paper or what we heard. So, we don’t want to conclude that nothing is being done. But it got to a proportion where you begin to worry. How can people just keep quiet and people herding cows are carrying guns? A civilian can’t just be carrying assault weapons all over the place, it is not done. Even in war times people who carry guns are authorized to do so. There has to be an instruction to which you stick. So… that really caused a lot of concerns, not only locally but abroad. People were asking, is there really a government in place? Why would somebody allow that? But lately, you heard statements being made…that they must be pursued. But it is a function of how tightly we manage our security. They should be able to round up and make examples of these people so that others will desist. That is my position.
What is your position on the Cattle Grazing Bill that is before the National Assembly now?
Well, first of all, I don’t know the content of the Grazing Bill. So, perhaps the question is: is it something that should be handled at that level, or the state level or at the local government level? With my idea about how you want to restructure, you can see how that should be looked into — the local government option. The local government could just decide to have that, particularly local governments in the North where their own 650,000 to 750,000 will be over so much larger areas. And like the President was talking about the little effort we had made at sustaining forestation and maintaining greenery. It has been a major effort, so those people don’t need to move going all the way from Sokoto to come to Degema to come and look for grass for their cattle. It is absurd. So, that is why I say I don’t know the details of the Grazing Bill. The first question that should be asked, as I have said, is: should it be something that should be handled at the National Assembly? Why should it be at the National Assembly? If it is handled at the National Assembly, in line with what my views are, it should be left for the local (government) authorities to decide whether they have such facilities. Why is it such a big national question? People buy these things (cattle) at the local areas, it is not like something that you have to buy at the national level. So, to me, that is not even where the issue should have come up. It should have been at the local governments where they can easily pin-point the areas.
Has there been any experience of such practice outside this country, maybe in the Western world?
There is no such thing. This is not my field, but I think, this is 2016, Nigeria should be a major cattle, dairy and meat processing nation, breeding cattle, slaughtering cattle, packaging meat, packaging meat products and so on and so forth. It should be modern business. This modern business cannot start with where people have to be suffering these cattle trekking all over the place looking for grass. They should be properly catered for. It is big business in most countries, Australia, Canada, U.S, Argentina. The issue that we are having now don’t arise there because they have already sorted out how they want to do it. They certainly don’t graze into people’s farms, certainly not! I went to University where they have a lot of dairy, you can stay there for donkey years you don’t see any cattle because they are in their locations and they are fattened, they are grown and taken care of. For what bloody reason must this be a national issue? It doesn’t make any sense.
Is President Buhari’s anti-corruption war on the right track?
You see, we are in such strait and we are looking for solutions. Here we were with 100 dollars per barrel of crude oil and all kinds of revenues going out of our ears. We should have leveraged such revenues such that there was no sector we did not touch. But see how the moneys were evidently frittered away. So, I’m hundred percent in support of identifying corruption, punishing it, recovering the loot and putting strait jackets to prevent its re-occurrence.
Now, it is for the legal people, it’s not for every man in the street, to get strong laws, strong enforcement, equality before the law, sanctity of sanctions. When you put those things in place, it doesn’t have to be something that has to be in the front page of every newspaper every day. We want to see people who violate the rules, who circumvent the laws, we want to see the way you allocate funds and the way you release funds. You see, because people wonder how these funds are released. If you go to any bank today, they would ask you to sign this, sign that. If I have to sign all these how did all this money escape out of the vault? Of course, it all did not certainly come from the vault, but by and large it did. A cheque comes in for so much cash, shouldn’t there be a system to say “ah, why would you need so much?’, at least it should be transferred to somewhere from where the cash can be taken. Instead, you come there with a big van you load up these things and, bad enough in domestic currency, but also in foreign currency. Something is wrong. So, it is not the feverish pitch you put in when talking about corruption. What is important is: are the structures in place to thwart it and to make sure you detect, punish it and prevent it right from the source? Those are the issues. So, the issue should not be whether I’m for the way it is going or not for the way it is going. You see, there is so much more to governance than just fighting corruption. And everybody knows that. Of course, the government has said they are doing a lot more. They have put up a long list of all sorts of things they have been doing. But people who don’t know that keep on saying it is all corruption, corruption and corruption. No matter how you belittle it, it is a crying shame. The rest of the world cannot understand why we had all this money, yet we can’t have steady light, we don’t have better quality schools, we don’t have better quality hospitals, we don’t have better roads, we don’t have more seasoned air transport, railways, we don’t have large-scale labour-intensive manufacturing to employ our teeming labour force. Why can’t we, with all the money that we have had? And they say the reason is that a lot of it is siphoned out of the system and made inactive. It is like where the Central Bank withdraws money, stops it from just floating in the system and creating inflation. We withdraw money that should be creating wealth. Instead, it is in the pockets of people who have no way of spending it productively even in their whole lifetime, not only within but outside. That is what we are talking about. So, we shouldn’t be talking as if it is a question of whether you are in this side or the other side. We should all be terribly concerned. So, to me, that is one of the things that enamoured the international community to the coming of Buhari; somebody to be straight, methodical and forceful in creating those structures that will prevent the corrupt practices that have been so far perpetrated.
Some try to trace the origin of corruption to the era of Babangida in power and they say his administration actually institutionalized corruption in Nigeria. You were a member of his cabinet and the Finance Minister for that matter. How do you feel whenever you hear such comments?
I think it is stupid to be so precise. Nobody can be so precise (laughs). You see, the people who made the military coup in January 15, 1966, what did they say? Corruption was one of their reasons. Rightly or wrongly, and I think there could be some exaggeration, people associated the late Okotie-Eboh with a flamboyant lifestyle and with corruption. So, to come back 20 years later to say it started with Babangida administration, I don’t think that is true. As for me, a lot of people say ‘oh you were there, you were there’. I was there in finance for three or four months. I was there and they were busy talking about the paper I wrote about privatization and globalization and how to do this and that. They debated IMF loans and it was felt that “oh, this man who supported IMF loans.” The issue was not a question of supporting IMF loans but supporting the appropriate funding of your foreign exchange so that those who need it get it, so that the exchange rate could be sustained. Whether you got the loan from IDB, FDI, EEC or wherever, the issue is the supply of foreign exchange in relation to the demand of foreign exchange and therefore preventing depreciation that is not in consonance with the viability of so many projects lying there waiting for the budget. Those projects don’t know whether the money is borrowed or is saved, the important thing is that it is available to use. And it is what they produce that creates that supply that prevents inflation from going up.
Studies have shown that most countries that embark on the deregulation policy made careful preparation before implementing it. For example, the Iranian model of deregulation made adequate preparations for the citizenry a couple of years before they started deregulating. Do you see the recent deregulation of the downstream sector of the oil and gas in Nigeria by the government as properly planned for?
I don’t know what could be described as if they had just started deregulation. You see, the oil sector has been devilled by all the other issues – national leadership, misplacement of efficient personnel, etc. When you set up a corporation, you are supposed to give it a leeway to grow. Those who are there, you have all these skills in the management of oil and gas but the ministry keeps interfering. So, with all the interference, the issue of deregulation which should be decided as a matter of course by creating new refineries, you are moving into petrochemicals, you are moving into aromatics, you are moving into feed stocks and so on, all of these come out of petroleum. But we didn’t let the business people who knew how to do it take their decisions. So, the deregulation was very poorly done. It is not about an Iranian model of deregulation. We didn’t have the right leadership, they were not given the leeway. There was no sustenance of the merit system where the decision-makers are there by experience and training. They would make those decisions, not somebody from the Villa or from the ministry. It is the corporation that should have created this and of course, as you move down the deregulation line, those things are all private sector operations. So, I don’t think we can necessarily get anything to learn from looking at the Iranian model or whatever because when you look at such things you have to put them in context of the history of those countries. Refineries, the basic thing, we couldn’t sustain. Other African countries are producing at 98%, we are producing at 20%. That is just the basic refining, not to talk of deregulating to other things.
Just recently, the Minister of Finance, in a follow-up to her claim that the Nigerian economy is in technical recession, also said that very soon the country will go into international borrowing. Does that align with your views that it is necessary for Nigeria to go for IMF or any other lending international institutions for loan at this time?
(Laughs), well, the issue is that by July, 2016 oil price has fallen from $100 to $40, the government cannot implement the 2016 budget and in the same breath we are hearing that the 2017 budget will be ready in October. So, the basic question is not whether you are going to borrow from wherever, it is whether with your demand and supply of funds are you able to carry out your programmes or not? That is the basic question. It is not whether you are going to borrow from IMF or not. I remember in those days, some people came to me and said “why IMF loan? You can borrow it from UBA and Union Bank and things like that”. It is not the source of funds that should be of relevance. If anything, it should be the terms on which you borrow. What are the interest rates? What is the grace period? Would the cost be enough for you to do business with the money and pay back? Would it give you enough grace period to finish and start earning revenue before you start paying back? The terms structure of the borrowing is more important than where it is coming from. If it is coming from an international organization like IMF or World bank, it is for you to agree on what you need to do for your economy to improve. The question of needing it is a foregone conclusion because if you don’t need it why must you start talking about borrowing in the first place? Let me say that there should be no area which the government can’t get into even if it means borrowing to add to what they have. You see, the labour force is growing at 70 to 80%. We are supposed to be the third largest population yet we don’t have major industries. Where are you going to put all these? Agriculture has been shrinking even though it should be growing more. That is just the structure of demand. After food, you have to meet other needs. Although you can go into food processing and refining and so on, but non-agriculture is where labour force is actually important. And like you have observed, when you borrow you have to stick to how you use it for. Nobody is going to teach you. You have to discipline yourself to do it. Let’s raise long-term funds for needed infrastructure from those who would give you advice and technical expertise.
Against the backdrop of what happened recently where some international grants extended to this country for the purpose of assisting in AIDS programme were reportedly diverted, are you not worried about the efficient management of such borrowed funds from international institutions?
My position is that what about our own funds, don’t you worry about how they manage it? So, it is not just the ones borrowed from abroad, it also concerns the ones raised at home; the bonds raised at home. States are floating bonds; the federal government is floating treasury bills and so on. You have to worry, obviously, yes. The only question here is that we know that because of the way they (international institutions) are set up, first of all, they don’t come and give you a cheque, they don’t even give you the cash. They give you as according to your programme is approved. Some of it could be paid directly to your suppliers, whether they are equipment or whatever. So, the chances of that being mismanaged are so slim compared to where you get people who want to lend to you and they are only interested in how you are paying back. The last source of fund that we should be worrying about being mismanaged is the other people they run to because they want to do deals with them. You can’t do deals with these (IMF and World Bank) ones. And that is why they give the impression that they are terrible just because you can’t do deals with anybody. They (IMF and World Bank) will tell you, “See, this is what you need and that is where we are going. This is the lowest price you can get it.” That is the place where I worked and that is how it works. I have heard that all sorts of things are happening now but it is no excuse.
Let’s talk about the free fall of the naira. The Central Bank has intervened to check the fall which is already hitting 380 to the dollar. How do you see the apex bank’s intervention and also what are the macro-economic policies you suggest to check the tide of depreciation of the naira?
It goes to answer the question on the demand and supply of foreign exchange. When Largade came here, she came here like she would go to Greece or Turkey or Malaysia or Indonesia. We are a member of the IMF, that is why she comes here. If we are not a member like North Korea, she would not come. And I expected Nigeria to say, “Okay, with this big decline in oil revenue, we need help before we can readjust”. When you do that, that helps you to stabilize things. One of those things you stabilize by getting those funds is your naira. So, by the time you get all these things, instead of using hard-earned foreign exchange, you are getting money from UNICEF, UNDP to pay for the cost of IDP and so on, you are reducing the pressure on naira and the foreign exchange we have in the Central Bank. A government goes out to see what is feasible and what is economically viable. When you have done that, you have done your duty. It is the demand side, and you also have a duty there. If you decide to, within the rules of international trade, reduce the importation of this or that, small amount, you do it. IMF, World Bank and your bilaterals will understand why you need to. So, you see what you are doing, you go maximize your resources, you also try and minimize your needs. By the time you get it together you bring down exchange rate. It is not for Central Bank to say they are intervening. What the hell are they doing? Are they magicians? The idea is to use all the policies that affect demand and supply and see how they can make it efficient. That is the rule. Once the they cross each other, that is the exchange rate. The totality of supply and demand is so large. If there are small, small discrepancies, that is what happens in every country. You don’t peg it. Every day you watch from your offices the movement of your currency exchange rates. So, what is this pegging and all that? Go and mobilize and do the priming of your demand and leave it at that. And that is a continuous policy adjustment as you do it in relation to what you want to do, what you want to encourage and what you want to discourage. Not to go arbitrarily and decide to intervene and peg the exchange rate. The other day, they announced that it will settle at N250 to the dollar. I say look at these clowns, they don’t even know how to mobilize. They are saying that and the ordinary man in the street is feeling comfortable.
On a lighter note, you have been out of government for quite a while. What has been keeping you busy and fit?
Well, look at the environment around here. When you are here, it is peaceful. We don’t do any counterfeiting here, no drug and so on. I’m consulting. You know I was chairman of BGL and those guys messed me up. I’m a consultant and not much of a farmer. I grew up in Lagos and so, I’m not a rural guy although I used to go to farm with my grandmother.
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