INTERVIEW: “Nigeria must see global oil crisis as opportunity to grow economy”

The Executive Secretary, African Capacity Building
Foundation (ACBF), Emmanuel Nnadozie, a professor, was
in Nigeria recently. He spoke with PREMIUM TIMES’
Business Editor, Bassey Udo, on the state of the economy,
Naira devaluation and corruption.
PREMIUM TIMES:​ How has your mission to Nigeria
been?
Everything has gone very well. It gave me the opportunity to see
firsthand some of the projects we support in Nigeria, such as the
National Institute for Legislative Studies and the African University
of Science and technology.
The vision of the Foundation is to see an Africa that is capable of
achieving its own development. We have a five-year strategic plan
ending this year. From next year, a new five-year strategy will run
from 2017 to 2021. It is a strategy that essentially tries to provide
the substance to promote an Africa capable of achieving its own
development.
The strategy will build human institutional and leadership
capacities; promote and build soft capacities relating to the society;
change in mindset, improvement in attitudes and the ways people
do business.
Specifically, we target critical areas identified by countries. Almost
every African country wants to industrialize. They want to
diversify their economies and become less dependent on primary
commodity exports. They want to add value, and so, for us the
challenge is how do we produce the critical skills needed for these
things to happen.
How do you create or build the institutions necessary for
promoting structural transformation? For a country like Nigeria,
our challenges concern security, infrastructure and, the
industrialization, and more importantly, youth unemployment.
So, our priority areas of intervention would generally focus on
these areas.
PREMIUM TIMES: How would new Nigerian institutions
benefit from your support?
Most of the time, policies are designed, but the issue is how to
make sure that things needed to be done are done. So, there’s still
a significant challenge of lack of implementation. That one is
something that we can tackle very quickly. But as we go along the
road and we have other discussions which will help us now to
look at what we could be considered to be the serious capacity
needs because we do a needs assessment whether of skills as
well as of institutions. And then we can come up with a strategy
that we can use to do that.
PREMIUM TIMES: The Buhari administration has been in
power for more than eight months. It appears the
economy has been stagnant and nothing seems to be
working. What’s your view on this?
Any new administration will always need some time to really get
started. It’s never easy, especially when it’s a new political party
that comes into government. So, you won’t expect to see them
able to move as quickly as the party that succeeded it.
Regarding the economy, I think the administration has been
unlucky. It came into office when the price of crude oil – Nigeria
primary export commodity – has collapsed in a very significant
way. So, it means revenues have declined in a major way. That
definitely will create problems for any administration in power.
In other words, they’ll not be able to make the necessary social
investments or capital expenditures needed to really drive the
economy, or to really re-energize the economy.
PREMIUM TIMES: What’s the way forward?
The way forward is to see this price collapse as an opportunity
not as a crisis. For far too long Nigeria has been talking about
diversification, economic transformation, agricultural
modernization and a massive industrialization, and these have
never really happened. Now is the opportunity.
This is a rude awakening to say this is the time to tackle these
problems and make the necessary investment in energy, in rail,
road infrastructure and improve the business environment for
businesses to invest and utilize the resources here.
So, at present, prudence is very important to manage the little
resources that the country has and avoid the excesses and
wastages of the past. Government has to stop the leakages in the
economy so that it maximize available revenue.
Government has to improve upon the revenue collection to build
on the work done on domestic resource mobilization. Nigeria has
not done very well in mobilizing available resources, and so
there’s efficiency issues.
But the largest proportion of the problem is illicit financial outflows.
So, when money is in short supply is a time to say, wait a
minute, we’re losing billions of dollars every year.
For the whole of Africa, it’s over to $50 to $60​ billion and
Nigeria is number one on the list in terms of where this problem is
happening.
So we have to stop the bleeding by paying attention to
strengthening the capacity of all the stakeholders or organizations
and departments that work in this area, especially Ministry of
Finance, the Central Bank, the Customs agencies, the legal
profession, specialized accountants.
We have to establish a Transfer Pricing Unit, because the greatest
source of illicit outflows is really business, especially the role of big
companies and multinationals, who use all kinds of tax avoidance
mechanisms, tax evasion, transfer mispricing and so on, to really
siphon money out there.
It’s really a big loss of revenue to the government. So my advice
would be prudent management of resources we have already.
Government should begin to do something to improve the
environment for businesses, pay serious attention to economic
diversification right now, and of course do some belt tightening. I
think the exchange rate policy has to be looked at very carefully.
PREMIUM TIMES: Do you think the Naira should be
devalued?
Economics is not as intuitive as some other subjects. Many times
one has to do counter-intuitive things. That’s what economics
teaches us. But, unfortunately, many people don’t listen to people
who have spent some time understanding how economics
works.
One needs a safety valve, and that really is what you have to pay
attention to. My suggestion would be, if the administration is in
doubt, it should bring different parties together, representatives of
business, stakeholders and other non-governmental bodies, and
then have a discussion to really understand what their own points
of view are, and they’ll be surprised what they would learn. That
would help them to really know what policies to do. I’m not going
to prescribe to them.
The Central Bank of Nigeria’s policy of allocating foreign exchange
may not be achieving the desired goals considering the disparity
between the official exchange rate and the parallel rate, the
incidence of smuggling, and it’s not possible for them to police
how the FOREX given is utilized.
PREMIUM TIMES: What’s your view on the fight against
corruption?
I completely agree with President Muhammadu Buhari’s statement
that if Nigeria does not kill corruption, corruption will kill Nigeria.
No country can stand the massive level of corruption, otherwise it
will be completely destabilized and the economy will be in ruins.
And therefore, if anybody is in doubt, it can see precisely how
corruption can lead to state failure. Some signs of it happened in
some parts of the country, because of certain things that
happened. So, it’s a worthwhile fight, and it’s something that
needs to be done.
But, having said that, the end does not always justify the means.
You have to be sure that in fighting this evil called corruption, you
don’t undermine your own systems, your own democracy, or
your own judicial system.
It’s important that the rule of law be followed. This is a country
that’s based on a constitution, and I believe that people are
innocent until proven guilty. You can’t judge and condemn people
and sentence them in the media. You must ensure that you have
systems in place to make sure that you take them through the
process of the law and ensure that they get a fair hearing, and if
they are guilty, then they should go to jail. The maximum penalty
should be put on them. So, my point is that we have to fight this
fight.
PREMIUM TIMES: Do you have any plans to train EFCC and
ICPC to help in the corruption fight?
If we have a request from the Nigerian government to support in
that area, we’ll be more than happy. Some years ago, we did a
study on corruption in Nigeria, and I was reading the book that
we wrote at the ACBF on corruption using Nigeria as the case
study, and it seems to me that even though this was many years
ago, it’s the same story that we’re still talking about today.
In that document, we identified some of the capacity needs that
still need to be addressed to effectively fight corruption. So, this
depends on what the government thinks, that there’s a role we
can play in supporting the anti-corruption crusade which we
completely subscribe to.
PREMIUM TIMES: What are these identified needs?
They are information, education and sensitization from the
leadership. There’s no successful fight against corruption without
a crusader at the top who leads by example. He or she has to be
incorruptible.
One must have institutions that will either prevent corruption or
fight it, if it’s already there; that will enforce the law. So, there’s a
collection of institutions that we know, starting from the
parliament or the National Assembly. They have a critical role to
play.
Also, the oversight and audit roles, for example, and then any
range of organizations from the justice system, from law
enforcement and the police force, and to those in audit and
procurement department, Auditor General and the rest, then also
to the other societies, the media, and other civil society.
So, there’s room in strengthening areas weaknesses exist – in
human as well as institutional capacities so that they can play their
roles effectively. Fighting corruption is not just an enforcement
issue; it’s a mindset as well.
You want to start educating younger people to begin to think
differently about corruption, so that they don’t believe that what
they see everyday is the way things should be. I remind people
that in the Nigeria we grew up in, there was corruption, but it was
not something everybody aspired to be corrupt, to making it
overnight.
It’s all linked to the issues of patriotism as well. Fundamentally, for
Nigeria to really survive, it has to pay attention to the issue of
unifying the country and creating a nation where people are very
patriotic and believe in it. We’ve never had a sense of pride in our
nation, and this is what encourages people to go and loot from
the centre, either for themselves or for their community.
PREMIUM TIMES: Do you see a new Nigeria?
Nigeria is almost on a precipice. Nigerians have to put in the
required effort to ensure their country succeeds. It’s not just the
p​resident or the administration that need to do this. It’s every
Nigerian that has to put in their effort. I’m optimistic that the
country will find ways of overcoming the challenges it’s facing
with ethno-religious fragmentation, challenges of security, and of
course, the economic challenges it’s facing right now.
I’m optimistic, because it seems to me that no matter what, deep
down, everybody wants to see Nigeria succeed. But, maybe
when they feel they’ve not be included completely, they begin to
agitate for one thing or another. But, if one goes deep down, one
will realize that everybody wants to belong to a strong and
powerful nation. Nobody wants to be part of a small country,
except for some misguided people.
For me Nigeria has to pay attention to the youth. There are far too
many young people who are becoming educated, but nothing to
do, and normally this should be a demographic dividend for a
country like this. But, if this is not managed properly, it could
become a demographic nightmare
PREMIUM TIMES: Can we win the war against illicit fund
transfer?
It’s a war that’s winnable if the will is there and the leadership is
ready to move in that direction. It’s not a war that can be won
overnight. The starting point is to acknowledge there’s a problem.
Secondly understand the magnitude of the problem; third is how
do we plug the hole and stop the bleeding. Nigeria has Financial
Intelligence Unit, Customs, Central Bank that follows transactions
and a Finance Ministry that will do overall policy. So, if one
strengthens the judicial system and train those who specialize in
this area, one can begin to tackle this problem as quickly as
possible. The Transfer Pricing Unit that has to be at the Central
Bank or wherever they feel they should be.
You need specialists, and they have to receive competitive salaries
so that they are not hired away by these multinationals because
that’s what happens. People build the skills and the multinationals
will hire them to come and advise them to evade taxes as well.

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