Former Chairman, Nigerian Economic Summit Group (NESG), and current President of the Pharmaceutical Society of Nigeria (PSN), Mazi Sam Ohuabunwa, has asked all lovers of equity and justice to rally round the Igbo to ensure that they produce the next president after Muhammadu Buhari in 2023.
He described those opposed to a president of Igbo extraction in 2023 as selfish individuals, who only want to cause confusion and create a greater division, enmity and unhappiness.
In this exclusive chat with him, the former President of the Nigerian American Chamber of Commerce spoke on such nagging national issues as diversification of the economy, border closure, and minimum wage increase among others.
Aro News: For equity, justice and fairness, shouldn’t the next president of Nigeria in 2023 come from the South East geopolitical zone?
I think it is a magical extrapolation. All those who are saying that the next president of Nigeria should come from the South East are only being fair. If we have a Federation and we believe that we are all members of the Federation – the North, East, West and South; and all the other zones have had the opportunity to produce the president except the South East, I believe it is only fair to let the South East produce the next president. It is equity, and if Nigerians really mean that they want peace and unity, I think that should be the natural option. I agree that we may get to a point in the country where that may no longer be necessary; where we shall look for the best person to hold the office of the president. Yes, we may get to that level but we haven’t got there yet because we are still talking about the federal character; it is part of the constitutional provision. So, in political leadership, the same Federal character ought to apply; you can’t change the rule of the game midway. We used to hear, ‘it is the turn of the North; it is the turn of the West, it is the turn of the South.’ Now, it is the turn of the East and we are hearing confused voices. You know, it is self-serving; those who are making that noise don’t love Nigeria one bit. They just want crisis for the country. I think the logical thing to do is to allow all the geopolitical zones have a shot at the presidency. After that, we can then say, ok, everybody has had a chance, at least to appease every section and to show that we are equal citizens and that no section of the country is much more important or of higher value than the other. Now that it has gone round, we can then say ok, let’s go for the best; let the best win. You know, that could be accepted but not to change the rule midway. You don’t change the rule of the game in the middle of the game. You will see that it is a self-serving decision. People just want to ride roughshod on others. Those people don’t love the country. They want to cause trouble; they want to cause confusion and create a greater division, enmity and unhappiness. And I don’t think those postulations will stand. It is the turn of the South East and I think every Nigerian who loves equity and fairness will support the South East. I have heard some Northerners, Southerners and Westerners as well as other people, who mean well for the country saying it is the turn of the South East, but those who are selfish and want for themselves alone are saying other things. However, I believe that at the end, God will disappoint them
Aro News: Nigerians, particularly the common man, are lamenting that the border closure has negatively affected their quality of livelihood, since essential commodities like rice, are no longer within their reach due to high prices. Was the government right to have closed the border? Shouldn’t it have developed an alternative measure to control smuggling rather than border closure?
The truth is that closing the border is a sign that we have failed as a nation. It shows that we are incompetent as a nation. It shows that we can’t even man our borders. It shows that we don’t have trustworthy customs and immigration officers. It shows that we have nobody that is trustworthy in this country; all of us have failed. That’s what we have told the world. You have borders where you have the police, customs, immigration, the army and other security agents and you say you can’t control what comes in or what goes out through the borders. What does that mean? It means that you are all failures and because of that, you now cause trouble for the rest of the world. We are living in a world where we have the ECOWAS free trade agreement, which guarantees free movement of people, goods and services, and you closed the borders; it is against that ECOWAS convention. We have just signed Africa Continental Free Trade Agreement and you closed the border; it is against these two conventions. In my own personal opinion, it is a retrogressive step because it doesn’t grow an economy. The time we ought to have closed our border has passed. That was when borders could be closed and then you could use that to build internal strength, but we don’t have that opportunity anymore; we have lost it. We are in a global world, and everybody cannot be driving on the right and you want to drive on the left; you will cause accident. So, this is a very grievous action. I thought that this was done maybe to respond to emergency security breach. For instance, you heard that some people were planning to invade your country and you closed your borders so they won’t invade your country, or to have more time to prepare to fight them; not to fight goods and services. You can’t fight those things. When you are through with all these inconveniences you are causing yourself and your citizens, you will open the border. If any man closes the door to his house so that nobody would enter, can he go out? He cannot go out. But one day, he will need to use the toilet or go and look for food. Then he will open the door and those things he was preventing from entering will enter. This is a very retrogressive way of managing an economy. If the people currently in customs are not good enough to man our borders, then let’s remove them and bring others. There are people in this country who have the competence, the managerial skills and understanding to manage our customs and make it effective; people who can manage our immigration and make it faithful. We cannot be a nation that is unable to do anything very well. We are not talking about borders that are unknown; we are talking about borders that are known. I thought what they should do is to find a way of closing borders that are not manned by security agents. But, to close both the known and the unknown, manned and unmanned borders is a sign of national failure and I feel very sad. It doesn’t reflect well on us; it shows us as generally incompetent people who cannot manage the most basic function of government.
Aro News: Recently, the Yoruba Council of Elders said Nigeria is at a crossroads, considering the level of insecurity such as kidnapping, banditry, armed robbery, famers/herders clashes and Boko Haram insurgency among others. Is Nigeria truly at a crossroads
We are beyond crossroads; we are heading to the precipice and very close too and that is not a comfortable place to be. And it will require divine intervention to pull us back from the precipice or a change in the governance structure of our country. The structure so far is not able to promote high productivity and competitiveness; the structure so far is in support of the haves against the have-nots. The structure makes it difficult for ordinarily hardworking people to prosper. The structure makes it possible for those who have contacts and connection to thrive. A very small percentage of Nigerians don’t know that there is bad weather; they are cruising while majority is in bad weather. So, when you now complicate that bad weather with injustice, unfair and inequitable treatment of some people, coupled with everybody’s life now being put under threat, then that complicates the matter the more. So, it doesn’t require the Yoruba elders or anybody to say so; this country is not in the best of shape, and we have been travelling this road a long time. We are in a difficult stretch right now, and it will require divine efforts or some significant turnaround in our polity, where we will think of how to make life better for one another. For instance, if I meet you building a kiosk on the highway and I am the government, can I stop you and ask if there is anything I can do to make your life easier with the kiosk? Is there something I can do? If you are building in the wrong place, I take you to a good place and say this is not the right place to build a kiosk, instead of destroying your kiosk and telling you to go to hell, which is what governments do at different levels. This economy can be turned around. I have always said that this country can be a First world country in four years. There is a book I wrote and I asked: when will Nigeria become a first world? My proposition is that it is possible. I was born into this country over 60 years ago and I have always been told I am in a Third world. My question has always been: when am I going to be in the first world? Even those that were in the same category with us in the 60s have all gone to the first world and we are still in the third world. So, it is possible. It is just that it takes a different perspective and commitment to turn out a great economy different from what we have. We are doing touch and go; playing hide and seek politics and economics. The day we face our economy without care about the political consequences; and then not just facing it by our own limited knowledge but getting a proper and well educated; well debated political and economic direction, the country’s economy will move forward. My economic thoughts may not be the best and yours may not be the best, but if we bring 20 to 25 good people to sit down and knock out an economic good policy and bring other people to comment and critique it, we will come out with a vision. And when we have a vision for Nigeria, which all Nigerians understand and buy into, we will go to where we are going. But today, two or three persons will come together and do what is their fancy. Economy does not respond to fancy; it responds to proper economic policies, which comes out of rigor.
Aro News: What will be the implication of the new minimum wage of N30, 000 on our economy?
The implication is that we are going to have a runaway inflation. Secondly, there will be labour disquiet because many states will not be able to pay. When the government sector finishes, it will be the turn of the private sector. So, there is going to be some kind of instability in labour/employer relations. There will be inflation; there will be discordant tune in economy. Nigeria will have a worse situation because before the increase, about 70 percent of the national budget is spent on recurrent, which is to pay salaries and overhead; less than 30 percent is spent on capital. In fact, there was a time capital expenditure was about 20 percent but with this, maybe, less than 10 percent will be left for capital expenditure. So, we eat up everything; we grow the farm and eat up the seed leaving nothing to replant. Since we have nothing to replant, there will be infrastructure deficit because capital projects will not happen. We just spend the money paying salaries of civil and public servants and having retinue of escorts, retinue of PAs, SAs, and PAs to PA, SAs to SA and all that. We just burn our money. I don’t think we are showing enough seriousness that we want to heal our economy. Until we begin to buy the bullets and do the hard thing, the economy will not do much better.
Aro News: What should the government have done?
Government should have resisted increasing minimum wage or reduced the staff at a level they can pay those who are with them higher wages to instigate higher productivity. You don’t pay wages when productivity is low. The entitlement of an employee is the salary he starts with. Increasing his salary is a function of his productivity, and too, your own ability and availability as an employer to pay. But, government responded to pressure from labour and also used it as a political gimmick because it was just before the 2019 elections. That shows that it was not done purely based on economic consideration. It was done just to score some political points and perhaps, bribe the workers so that they don’t disrupt the elections or whatever, but it doesn’t show sign of proper thinking to stabilize and defend an economy like ours. So, we are going to suffer the consequences, which are inflation and labour disquiet, and at the end of the day, the benefits would really be lost.
I believe in paying workers well but it must be indexed to productivity and it must also be a consequence of my ability; how much money am I making to pay salaries. The relationship between workers and employers is like I employ or hire you, give you job to do and if you produce the job, I meet my obligation. You can’t force me to pay you what I cannot afford and then I succumb. I don’t think it is complete tough economic thinking. I don’t think it is done with the best interest of the nation. It is done with political interest to protect the political class. Until we have people who are willing to buy the bullet, face the bullet if they have to, but do what is right for the economy, our country will continue to be going forward and backward. We won’t be able to get to where we want to go.
Aro News: Government has always talked about diversification but it appears that has not happened; how far do you think the economy has been diversified?
Well, the economy is diversified when you look at the Gross Domestic Product (GDP) contribution because the total output of a nation is measured by the GDP. In those days, we used to have oil contributing over 30 percent, and agriculture contributing over 40 percent to GDP. So, all the GDP we had was from oil and agriculture and both contributed over 70 percent of GDP, but today, oil is contributing only about 10 percent of the country’s GDP. Agriculture is contributing about 20 percent. Other things have come up, like the telecommunications and services. So, we have larger contributions from other things. We have solid minerals, mining, tourism, and entertainment among others. The GDP of even manufacturing has also improved. So, if you combine oil and agriculture, you cannot even get up to 50 percent of GDP anymore. That is the diversification.
However, our economy is diversified but in terms of foreign exchange earnings, we are still dependent on oil. We still get up to 90 percent or more of our foreign exchange earnings from oil. Now look at it, oil is contributing about 10 to 12 percent of the GDP but it is giving us 90 percent of foreign exchange income, which shows that oil is a component of the economy that does not create much labour because if it creates more work, it should have been higher in GDP contribution. So, its contribution to GDP is low but its contribution to foreign exchange earnings and national income is so domineering. That is why we say that our economy is mono-cultural; it is a mono-economy, meaning that one economy is bringing all the money that the country needs. But, in terms of diversification, getting other facets of the economy to contribute to general output, there is a diversification. But, these other areas are not producing much income. Agriculture is peasant farming; industry competitiveness is low and most of the other things are not producing foreign exchange. So, that is why we say, yes, diversification is coming in terms of breaking the GDP but we have to create more productivity and values for other sectors of the economy so that they can provide income as oil is coming. We are hoping that one day oil should go down to less than 50 percent of total national income. We should get more from agriculture through export. We should get more from industry through export and so on and so forth.
Aro News: It is not just enough to keep hoping that one day we should get less than 50 percent of our GDP from oil. What practical step is government taking to ensure that there is a change?
What we need to do is to first, move our focus away from oil, and do what the Norwegian countries are doing. Norway, for instance, receives oil money but does not spend it. It ploughs it into Sovereign Wealth Fund. It uses it as investment and then only the interest or dividend that comes from that investment is what the government spends; it doesn’t spend oil money. As long as Nigeria is spending oil money, nothing will improve except oil dies in the market or the prices come down or nobody is buying it. It is so cheap, even cheaper to sell oil and make money than to plant crops and they mature, you process them, add value and then you export them. So, Nigeria needs to make a deliberate decision and say for instance, next year or two years from now, oil will not contribute more than 50 percent of our income. We must make the balance from agriculture, industrial and other services. That is the only way government can re-orientate itself. As long as it has cheap oil money, there is really not much it can do. It won’t pay enough attention to industry or agriculture. Most of the things we say about agriculture are mere wishes; we don’t take concrete, lasting action because we don’t depend on it. It is a natural behaviour. The day we find that oil is no longer selling, you see that our economy will diversify in terms of income generation and productivity. We will then begin to export other products. We will then focus on groundnut, coffee, processing and exporting palm kernel and oil; things that used to give us money because before oil, these agric exports were giving us money. But, because it is much more difficult to deal with, we are following the least line of resistance. So, the first thing government needs to do is to take a decision that we will not spend oil money beyond this level.
Number two, we must be an export oriented country and if we are export oriented, then every policy should be on how to sell our products and make ourselves competitive in the global world. That is the way to ensure that we stop being dependent on oil. As long as oil is selling cheaply and we are getting the money without sweat, it is going to be a long journey.
Aro News: Experts have predicted that oil will dry up in the next 20 years. Suppose that happens in the next 20 years, what will be the fate of Nigeria in the global economy?
If oil dries up in 20 years’ time, we will first be in trouble; there will be serious crisis. We will go into deep recession. Why did we go into recession in 2016/2017? It was because the oil prices went down; that’s all. We were not making enough money to be able to fund the economy. When the oil prices recovered, we came out of the recession. So, the moment oil disappears either through low prices or low production, we will go into serious crisis. Nigeria will be in turmoil because today, with all the oil we are selling, the poverty rate still hovers between 60 and 65 percent, where those who are living on less than $2 per day are more than 60 percent and we are selling oil. Can you imagine what will happen when we no longer have oil to sell? People will eat dust. The situation we found ourselves in Biafra will even be better, except we begin the diversification now. However, like I said, the moment that happens, we will suffer for a while but Nigeria will be forced to find alternative. We are human beings; we shall be forced to look for alternative means of survival; that’s the only thing. The first phase we will be in turmoil and we will suffer. Then, we will recover and we will no longer depend on oil. We will become more creative and innovative. We will focus on value addition and creation. Now, in the oil and gas industry, there is no value creation because we are not refining. Can you imagine that we are not refining? Do you know why? We are yet to have our own refinery and everyday you hear about turnaround maintenance. This Managing Director (MD) will promise to get the refineries working in two months’ time and another MD says he would do that in five months; there is no motivation or consequence. Whether we do it or not; so long as we sell oil and the money is distributed, everybody is happy, our problem will persist.
Aro News: At a time most Nigerians cannot eat three square meals per day, government is increasing the Value Added Tax (VAT), which burden will ultimately fall on ordinary Nigerians that are already suffering, what is your take on that?
Well, when one finger touches the oil, it soils the other fingers. FG was first blackmailed to give more money to workers. How does it get the money? It doesn’t have it; so, government has to look for other ways of getting the money. That is what the government has done. Now, if this VAT was only for civil servants, it would have been okay. The minimum wage is just like a Greek gift; government has just given the workers with one hand and taken it with the other hand. You said you want a higher minimum wage; okay, take it but it must be taken back through the increment in VAT. But, what the government forgets is that majority of Nigerians are not on wages. Majority of them are self-employed, unemployed or underemployed and they will pay this 7.5 percent VAT without any increase in their income. Government just takes their response to those who are demanding higher wages to punish the rest of Nigerians; that is what it is. The VAT should have been for public and civil servants; those whose salaries are increased and who can afford to pay it. What about those who don’t have salary increase; those who have been on a particular salary for 20 years and those whose salaries are coming down because of inflation and bad business? What will happen to such people?
So, this is again lack of holistic economic thinking. It not holistic; it is just a partial, knee-jerk step to solve a problem.
Culled from The Sun