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

Emmanuel Nnadozie, Executive Secretary, African Capacity Building Foundation (ACBF)

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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