In a recent interview, Vanguard engages Prof Pat Utomi, to sought for ideas on how Nigeria could come out of her present economic depreciation. His expertise in the field of Political Economy and Management makes him a fitting figure when discussing the current search for a workable paradigm in Nigeria.
In the discuss Utomi examined the intractable challenge of governance in the country and submitted that Nigeria’s pattern of governance is hostile to meaningful growth.
Nigeria is now at a crossroads and needs to get on its feet, how can that be achieved?
We have to begin by recognizing that what is at stake is the future of the nation. And we have to find the discipline to recognize what we have at stake. The trouble with Nigeria is the challenge of politics and we can’t even have a serious minded conversation anymore.
Everything is extremely partisan. Logic does not prevail anymore. People are justifying wrong decisions on the grounds that if you don’t agree with them, you will be termed anti-party.
Nigerians are not thinking together to know that what is at stake is so huge. Let me not sound frightening but in fairness, we have to realise that the way we are, if we get policy-making right and get some form of consensus around it and people begin to believe in it before things will actually really change, it will be at least between 18 -20 months. So you can write off 2017. This trouble we are in will continue in 2017.
Economists talk about the J-Curve which is lag that follows such restructuring and the effects. What borders me is that I don’t see a consensus on a policy thrust. We get a lot of gleam- talk. Everything is still at the sloganeering level. I often turn to what Mahathir Mohammed did in Malaysia when they started the new economic policy which then led to Vision 2020 in Malaysia. I think the political leadership in Nigeria is so naïve to realise that they have done more to bring Nigeria to the brink of disintegration just by their own daily actions and failure to lead.
On political leadership
I am writing a book which is titled 50 years. It is about 50 years of state capture in Nigeria from 1966 to 2016. It is about how a group of young military actors captured the Nigerian state and held it captive for 50 years. They have either run Nigeria or when the legitimacy question makes it difficult for them, they bring their surrogates to run Nigeria. And the consequence is the wastage of a generation.
A generation that could have been a generation of prosperity has really become a generation of despair. Until we can honestly have a conversation that brings people to an understanding of what 50 years of state capture has done to us, I think we are still going to play these games of sloganeering. The shouts are about turning to solid minerals. I am flying around the world since I am retired and have nothing else to do. And on any of my trips, when you mention Nigeria, everyone will start to laugh. Nigeria has not even done the basic studies that will make people who are interested in mining to come in. Before mining can kick into our quality of life, we should be talking of about 15 years. But you hear them talk about diversifying into mining every day as if jobs will be in the sector by next year.
You spoke about policies, Nigeria had SAP, NEEDS Documents, Seven-Point Agenda and Transformation Agenda among others but they did not take the country to anywhere, how can such trend be stopped?
Implementation is the heart of policy. Every policy spells out clearly implementation guidelines which capture the role that stakeholders will play. It involves timelines and others. Broad sweeping statements of what those in charge will like to do, is not policy-making. It can be a vision statement. But many times we call a vision statement a policy. In the face of this, Saudi Arabia has decided that it can not continue to depend on oil.
Right now, the biggest consulting firms are fully employed. They are deciding what Saudi Arabia will be doing in the long term, short term and medium term. They are deciding how they are going to be less dependent on oil in five years. In Nigeria, who do we know is doing that type of work right now? There is a certain elite trait in Nigeria that lacks the discipline of execution. That makes us enjoy gleam talk and the bottom line is that we are waiting for oil prices to go up. That is the truth. Which are the ministries chasing this new direction? What are their targets? Who are the champions of each goal that we are holding accountable? And is there any rule that says if certain things do not happen in six months, the person in charge will be fired?
You are an advocate of diversification, sometimes you talk about the value-chain in so many products, how can Nigeria make that work in the face of the present realities?
When you say you are diversifying, how are you doing that? What are you diversifying into? Nigeria used to be the biggest exporter of cocoa in the world. 70 percent of the cocoa still produced in the world is still produced in West Africa and Nigeria produces less than five percent. Ivory Coast produces most of these. The numbers that we have suggest that Nigeria is still a better place to produce cocoa than Ivory Coast. Who do you know is sitting down to know how Nigeria can be back on that path?
I was the chairman of the South/South Economic Forum that created the Brace Commission. During that summit, we said to the South/South governors, who are the most dependent on oil, as it were, that they should give us eight thousand hectares of land that we can dedicate to cocoa, rubber and palm produce. We asked them to allow us to look for international operators that will join us in doing the project.
There are people around the world who are ready to get involved as long as government assures them that they will not be the usual nuisance that government is in Nigeria. They will invest and produce more cocoa than Ivory Coast is producing and that will earn Nigeria more foreign exchange. I think there is something fundamentally wrong with the nature of government in Nigeria and I take it back to 50 years of state capture in the country.
In all of these, do you think fiscal federalism should be employed now as one of the measures towards creating self-sufficiency among Nigeria’s component states?
Of course, fiscal federalism will help us because when Nigeria actually had a federation, development was prioritised. There were growth and development. If Nigeria is to be returned to the idea of a developmental state, we must restructure to a point where development is bottom-up not the prebendal culture where everyone comes to the centre.
How can that be achieved?
The real big problem that we have is that the institutions we have will prevent progress. Unabashedly, I am saying that the biggest problem of Nigeria is government. In Nigeria, government does more to prevent progress than to make progress happen. I can do an academic study of how governments have done more to prevent progress in Nigeria.
We have a situation whereby a governor approves something, the next one will come and say no. The project dies. Money wasted. Why would anybody come to invest in such a country? We can overcome all these by cleaning up the political process. That is what South Korea did. The country used to be like Nigeria and it got to a point when people became fed up with money-bags.
Nigeria’s electoral body once went to South Korea and they were told what the Koreans did to clean up their electoral process. The Koreans told them that their process was such that only their money-bags dominated the process. They now made talking the qualification for people to have their names on ballot papers. Talking in that circumstance means debate in the schools, marketplaces, and other public places. How many people will consent to that in Nigeria?
I don’t care whether it is through a revolution that Nigeria will get better because I have lived for too long, embarrassed by the passport I carry about. One day in Paris, I ran into a classmate of mine from Thailand named Kohit. We last saw in 1981 when he finished his PHD and went back to Thailand. I finished mine in 1982 and came back to Nigeria. The first words that came out of his mouth were ‘’what happened to Nigeria, you guys were the smartest?”
Nigeria does not have an aluminum plant and our steel companies are not working, how can Nigeria revive its auto industry in line with the yearning for multiple streams of foreign exchange?
Development involves rigour. The motor industry in Nigeria was established on the back of a development strategy thrust that came out of Latin America. The person who proposed this idea called import substitution/industrialization was the Executive Secretary of Economic Commission of Latin American countries in the late eighties called Raul Prebisch.
That is why it is referred to as the Prebisch Thesis. The Prebish Thesis was significantly domesticated into our region of the world by the first black man to win a Nobel price in economics, Sir Arthur Louis. He wrote the book on economic policy in the Gold Coast(Ghana). There were some basic tools in what was offered by the Thesis. Many of us latched on to that to get started.
Our Asian colleagues realised very quickly that it had limitations and that there was a need to move quickly out of that to export-led industrialisation. Unfortunately, we created permanent infant industries in applying the Prebisch Thesis. I keep telling people who ask me what happened to Volkswagen to read an article I did in The Week Magazine which Nduka Obaigbena was publishing then. The first week I arrived at Volkswagen, I told them that if I had my way, I would shut down the plant. I said that import substitution had gotten us going down the path of industrialisation. But if you look at the industry the way it is, you know that Nigerians are just being punished by buying cars triple the normal price. That situation is because of the tariff and absence of inputs needed to build a competitive motor industry.
I highlighted that what Nigeria should do was not to keep waiting to build a Nigerian car, which in competitiveness analysis is not likely to happen. However, I said that what Nigeria should do was, having been as it were through this strategy, to incorporate into the global manufacturing family with European partners like Volkswagen, Daimler Benz, Layland and others, to be competitive in producing certain components in the motor industry.
I predicted that the industry would die. It died and I was blamed for it. In fact, a former Minister of Industry and I had a heated argument on it when he started the auto policy talk. I am not against having a Nigerian car, but how are we approaching it? We need a new approach.
I can tell you that Morocco is thriving in an auto development strategy. If Morocco can be thriving, we can thrive much better if we approach it intelligently. I know a few major producers of auto components who have been waiting to see what can be done in Nigeria about that. We can build up an automobile manufacturing sector but not a Nigerian car.
On intellectual input
The reason we are not doing well is because there is no intellectual atmosphere for sound discussion in Nigeria. I often talk about progress and modernity and when I do that I remember a German philosopher, Yogen Hevamas. He said modernity is about the public sphere and quality of conversation that goes on. It is about making the most intelligent choices.
A Nigerian Professor, who is based in the US, Olufemi Taiwo, in his book titled, Africa Must Be Modern, observed that the trouble of Africa is that Africa has refused to be modern. And part of this refusal is the absence of a serious public conversation. Any time you say something that is not in line with government thinking, you become an enemy. And so government makes enemies of their best friends. That shows that government is not ready to be modern. And because we refused to be modern, we can not have a conversation that will lead to progress.
For there to be a genuine change, Nigeria needs intellectuals in government and from what we are seeing now, intellectuals are not visible in government and even when the politicians get there, they rarely engage intellectuals, how can that trend be stopped?
It comes back to the point I made about the class of 1966. That class is stoutly anti-intellectual. And that is why Nigeria is where it is. The Awolowos, Okparas, Sardaunas, had intellectuals around them. I am talking about people like the Alukos. Who do we see around power today? All we see are pimps. It is so painful that some of the ideas we talk about in Nigeria are not accepted by those in power.
But some think that part of the problems in Nigeria is too many ideas from the World Bank, IMF, and the Breton Woods. What is your take on that?
When people can’t lead, they look for excuses. Our own Kalu Idika Kalu was on the World Bank team that worked on South Korea and the country took off. I am not saying that World Bank ideas are the smartest, but Nigeria has people who are smarter than those people at the World Bank. I was in Malaysia during the Asian financial crisis in 1997. I was at a World Bank meeting and Malaysia refused to accept the advice of the IMF on the Asian financial crisis because they had a clear logical track they wanted to travel.
And IMF and others who had a different prescription agreed to watch them use their model. Indonesia chose to run the IMF track and couple of months later Malaysia was the first out of the woods and the IMF was humble enough to admit that Malaysia’s options were more logical. These bodies are not bullies, what they always do is to tell you what they think will work, but if you disagree and it is logical, they will agree.
There are many ways to skin a cat but every way has its discipline which you must pursue. There is a lot of noise by the so-called Washington consensus about the private sector. I have always been a private sector inclined person but I have always said that with a certain kind of discipline, there is nothing wrong with a private sector strategy. Most of what worked in Singapore was public sector discipline.
But look at our public sector culture which is a culture of “go and take your share.” It is a culture of lack of rigour. When do public sector officials get to their offices in Abuja? When do they leave? How much time do they spend talking to contractors and political cronies?
How much time do they rigorously attach to solving state problems? You still have to find a way of not creating private monopolies instead of public monopolies. Both can be disastrous. Every choice made, has its logic and discipline. Ordinarily it is a strong civil society that makes that happen, unfortunately, the civil society here is weak.
Should there be dictatorial tendencies to make things work and what do you make of calls to restructure the National Assembly?
Every choice has its risks. There is no question that a benevolent dictator is a cheaper way of getting things done. But if that benevolent dictator happens to do the wrong thing, then you are dead. The reason Barack Obama on his first visit to Africa as President of the United States of America said that Africa needs strong institutions and not strong men, is that when you have strong men, when the strong man goes, the man that replaces the old strongman would want to justify his strength by undoing what the previous strong man did to gain legitimacy.
It then leads to haphazard policies. But when you have strong institutions, there will be boundaries because what institutions do is to create boundaries. Our history is the history of so many strong men. Where have the strong men taken us to?
They come and shout, we praise and clap, then we are back to square one. If we had built up strong institutions, it may not matter if we have a bad leader, nobody will notice because the institutions will carry us. Americans didn’t notice that George .W. Bush was a terrible leader because institutions were there. No matter what you think of Trump or Clinton, America will continue because they have strong institutions that will carry them to go in certain directions. A good leader will move things further ahead somehow but the strong institutions will ensure that there are boundaries.
On strong institutions, Dictatorship and Part-time Legislature
The concept of a benevolent dictator is romantic because people talk about what Park did in South Korea, but their institutions got strong enough to put Park in jail later. When Korea was being built up, they needed strong entrepreneurs so they created the concept of the Chaebols. They are the guys, who built the Samsung, Hyundai, and others. But do you know how many of them that have gone to jail?
That is why the next guys will behave well. It is useful to have passionate leaders but we have to be careful of how we endorse benevolent dictatorship. I probably have been the most consistent person who has been saying that part of the problem we have is that oil money inspired bloated public institutions and have been consistent on my position about the National Assembly.
We don’t need over 400 people, who don’t know what they are doing to ensure oversight functions. I have also continued to say that what we should have when we are really rich is a citizens’ legislature, which is a part-time National Assembly. The state of Texas is richer than Nigeria but they have a part time legislature. That is also how it is in most states in America’s Mid-West.
Can anyone show me what great change apart from padding that has taken place because we have a National Assembly? The National Assembly is structured in such a way that the people there will never vote for restructuring because of what they get. Maybe recession will make Nigerians to think properly and get out of the big trouble that we are experiencing.
Your opinion on the government’s disposition to the recession is obviously in tune with the public mood, but what do you suggest the government does in the interim regarding the recession?
We should also ask ourselves what Nigerians should do because there is always the tendency of asking what is the government doing. There are times that government even with the best intention can not do what needs to be done because of many limitations. What needs to be done is to make us develop a changed attitude to economics and how the economy works.
Most Nigerians who are complaining have all been spoilt by oil economy. A man, who is complaining and blaming the government comes to the office in the morning, leaves by 5pm having done absolutely nothing. And such a man is wondering why his salary has not been paid. He is unable to relate his not working to the revenue of the organisation. That is part of the entitlement mentality that oil has created in us.
All of us have a role to play because everybody goes to the Villa because they want something. Part of the reasons I am out of the country quite often is that I can spend a few hours there and earn my money. But in Nigeria, I don’t want to carry my bag and sit in somebody’s office waiting for hours to see him just to get one contract. For me, it is humiliating, so I leave them alone and go to places where I will be paid objectively just for speaking English for one hour.
The truth is that we need to begin to produce. We can only produce ourselves out of the recession. It is the responsibility of government and the citizens. As citizens, who are entrepreneurs or who are supposed to be entrepreneurs, we need to ask ourselves about the things we can produce and sell to others and earn revenues.
The only thing we sell to people is crude oil. Why should that be the case? The second thing that we need quickly to get out of recession is for the government to spend its way out of recession. But we have to be enormously careful not to spend the money the way Nigerians spend money because if we are not careful, it will go into the pockets of political parties and it will leave the shores of Nigeria.
Government expenditure must go to the small guy, who earns small money monthly and her consumption will drive production in that way. But if we do it like the Sure-P project, then it will not achieve what it is supposed to do.
There are many things we can do that are useful in order to stimulate the economy. My hope is that we have more similar projects with the one I am currently into which is the Integrated Produce City. It is a fusion of agriculture and industrialization. The government must do anything to facilitate those kinds of things and not be an impediment because the truth is that government frustrates start-up businesses.
Government is the biggest risk in Nigeria.