Odia Ofeimun

Q: Nigeria is in dire straits, how did it start and can we get out of woods?

Whatever may have happened during the military era, that is to say before the fourth republic, an era of the locust as it used to be called during Abacha’s dictatorship could have been corrected from 1999 when the Fourth Republic began. Remember Babangida was always saying, “we know those who will not take over from us,” so they brought somebody who always wanted to take over from them. It was when Olusegun Obasanjo came to power that the economic crisis deepened.

Nigeria was in a very dire situation. Oil prices had fallen and whatever was left behind for him wasn’t really enough to sustain a bullish prosecution of development. He had to have a very bad start because the preceding military regime were not regimes that prepared the way for the republic that was coming in. Usually soldiers who would hand over to civilians have a way of building traps and the economy was a big trap. They did not quite create the circumstance but the fact that they had spent the nation into recession and the international oil situation compounded the lot of Obasanjo’s regime. He had to face it. What Obasanjo was supposed to do was to reverse the consumerist approach to economic management which preceded him. He could not do it. He preferred a weak Naira when we had nothing to sell. He dithered over refineries. Because he wanted debt forgiveness, he was campaigning against raising the price of oil while hawks like Hugo Chavez in OPEC were bidding for price increases. Obasanjo spent his first term trying to become a big man in international circles, a respected leader, He worked so hard at it that he had no time in my view to do what needed to be done. He needed to build international relationship for domestic production, to manage the economy so well that even those we owed would realize that they were dealing with a man who knew his onions.

Unfortunately while he was gallivanting round the world and bidding for debt forgiveness which he did not need to do, the economy was spinning in directions he could not determine. If he had managed our monetary system well, he wouldn’t have needed to beg for debt forgiveness. Much of the monies that he imagined we owed was money that could have been wiped out by proper management of our monetary system. Unfortunately Nigerian leaders have a way of always following the advice of their competitors in the international market. If you follow the advice of your competitor, you will always be an underling in the international community. So you want debt forgiveness and the people you want debt forgiveness from are going to determine your options. Actually because of debt forgiveness Obasanjo was opposing domestic options that could have laid the basis for reducing import bills. But when oil prices started to jump, he was bullishly bragging about having done things. Our creditors over-determined Obasanjo’s options.

He never created a strong production base that could amortise any debts he ran into. You then had a situation where he appeared to be pilling up reserves after oil prices jumped but without knowing what to do with them. Whereas at that point in time it was not about having a bumper external reserve, it was about creating productive agencies within Nigeria that could make it unnecessary for us to need as much external reserve as they were building up. Once Obasanjo lost that fight he was bound to need a third or a fourth term because he had spent so much time beating about the bush, rather than developing the Nigerian economic system. All the successes he had were successes that did not depend on him. Everybody likes to say that he gave us GSM! You and I know that he didn’t give us GSM. At the international level, everybody was already plugging into it so he just plugged into it. What we did that could have changed the relationships Nigeria had in the international system, that for me is the important thing.

Obasanjo did not do them, so that by the time he handed over, he could tell you that he had a fairly strong external reserve but he left the Nigerian system as unproductive, corrupt, in fact more corrupt than he met it. Therefore there was really no basis for one to expect a great leap, there was no great leap he was going to push unless he got a third term and I think he needed that third term desperately in order to be able to acquire those economic means that he talked about in the grandiloquent speeches he liked to make. By the time he didn’t get a third term, the water had already passed under the bridge. Then it came to Yar Adua and Goodluck Jonathan.

Yar Adua would have made a lot of difference, he had already shown he wasn’t going to follow Obasanjo’s footsteps in so many things. It meant he had a capacity to disagree with Obasanjo’s position and he had enough disdain for so many decisions that Obasanjo took for everybody to see that he would strike a more developmental path. Unfortunately he couldn’t pull it off because of his health challenges. When Goodluck Jonathan came, he took some time to explain this. Jonathan took all the right decisions.

Jonathan took some right decisions. Give examples?

Oil started gushing and the prices started rising; and Goodluck decided to do what I consider the right things. One, he made up his mind he was going to build railways, he needed movement. Even Lugard and his exploiting colonial goons, when they came, even before they amalgamated North and South, they had started building the railways. Up till today, the most viable railway line has been left untouched, and that railway line starts from Idi-Iroko, Sagamu, Ijebu Ode, Ore, Benin, Asaba, Awka, Abakaliki, Enugu right through to Ogoja, Obudu and it goes through Taraba into Adamawa.

That is the best undone railway line in Nigeria because it is the most travelled line in this country. Anybody who is thinking seriously about the railways and doesn’t think about that line has not got it. The only line that can contest that line is the line going to Kano and ending up in the borders of Niger Republic which we should cause to go as far as the Mediterranean.

And then the position he took on Agriculture. True, they wasted more money on that Agric business than they needed to but that was a necessary step that if pursued properly could have at least relieved us of the very heavy duty on importation of food that we are still into at the moment.

And the importation of fuel, can you talk on that?

Why can’t a government ensure that across that belt from Ondo, Edo, Rivers, Bayelsa, Akwa Ibom, Imo, all the oil producing states, in each of them there is a refinery capacity that can immediately take care of any short fall? It is not rocket science, there are Nigerians who are trained to and they know how to do it. Any time we want to solve that problem we go to our competitors, those who do not want us to thrive to come help us out of it. So you have some big power that says I want to help you build a refinery but we will first build it in our country, uproot it and bring it to your country and then you pay three times for a refinery.

Odia Ofeimun

When you are confronted with that kind of scenario, shouldn’t you be concerned about how to build it yourselves?

What do you need to build a refinery with that is not possible by buying from different countries? You don’t need to buy a whole refinery from one country. You simply create it, a situation that makes it possible for all the components to be organised inside Nigeria by groups of people who know how to do it. There are Nigerians so well trained to do it that they help other countries in oil business. I mean we never think about it and therefore when solutions come, they are always the wrong solutions. The fact that within three months of coming to power, Buhari could not deal with the fuel sector and was still depending on the advice from IMF and other agencies as to how to solve the problems they have not solved in 30 years of trying, it tells you that there was something wrong with the Nigerian ruling class.

What can we do about the currency situation?

With a good sense of what went wrong, you know what to plug and, to be very honest, the Nigerian system was too buoyant to have been allowed to decay so fast the way it did. If you are manager of an economy as big as Nigeria’s, with people who are very hard working even when they are being misdirected, there was no problem with the Nigerian economy that could not have been solved before things began to go bananas. Even today it is still fairly easy to solve although most of the people, most of the agencies and organizations President Buhari would have needed to solve the problems have already decamped. To bring them back will be very difficult but should he want to do it right, first, is to take care of the banking system. Beginning with the central bank, if you are going to share money at the level of the central bank, share the money to those who are statutorily meant to have it. Be good at accounting for what comes in and make sure the leakages are properly plugged. You cannot plug the leakages if you are going to be taking emergency decisions about fuel and things like that.

That was the first emergency problem you should have removed from your purview, very quickly, so that you don’t have to be worried about the fuel crisis coming back. And then avoid the usual counter approaches which require a country to devalue or borrow. It is not because of the fall in oil prices that there was no oil in Nigeria, it is because the refineries are not working as they should. At any rate the cost of producing Nigerian oil is rising too high to be any comfort. If the refineries were working as they should, we could be refining our own oil. True, people would still have been taking oil across the borders to sell to other countries. But that’s an infinitesimal portion of the oil we would have been producing and therefore it wouldn’t have constituted a major oil crisis.

Even then, as a matter of deliberate policy, we ought sometimes to close our eyes to the oil that is taken across the border to neighbouring countries because we owe a responsibility to those countries not to let them be such poor societies that cant be good neighbours. If they are poor societies and we were a producing industrial and oil nation, self interest should dictate some mutual sharing. We need for our neighbours to be buoyant so that we can have a market to sell to. If we took care of our own oil production and people were smuggling oil to those other countries, there are moments when we should pretend not to see what is happening. We didn’t do that because of the foreign exchange situation that has become a central crisis.