INTERVIEW: My fear about INEC, 2019 presidential election — Moghalu

A former deputy governor of the Central Bank of Nigeria, Kingsley Moghalu
A former deputy governor of the Central Bank of Nigeria, Kingsley Moghalu

This is the continuation of an interview with the presidential candidate of the Young Progressives Party, Kingsley Moghalu.

The first part of the interview was published here.

Mr Moghalu, a former deputy central bank governor, spoke about his vision, economy, and security.

PT: What is the unique thing you are offering the Nigerian people?

MOGHALU: Good! A lot of what I have told here is already unique. I am offering the Nigerian people a different type of leadership. I am offering the Nigerian people the possibility of a transformational leadership in the nature of Lee Kuan Yew of Singapore, of Mahathir Bin Mohamad of Malaysia and Jinping of China. That is what my presidency will be for Nigeria. It will usher Nigeria into a new previously unforeseen possibilities that are all positive, because I understand what leadership is; because I have the political will to deliver on that vision; because I have the technocratic competence to do the job. This is a combination that we have not yet seen it. You only have people claiming the presidency on the right or ethnic irredentism, or who accidentally came into it without being prepared for it.

PT: The reason I asked that question is because you will see that the Buhari administration especially, have things it has done very well in the areas of security, anti-corruption and so on. It has been able to give money to traders here and there.

MOGHALU: (Cuts in) That is vote buying. I say it is vote buying. It is very interesting the timing of the ‘Trader Moni’ initiative.

PT: The point I am making is, if they have done so much, they have been able to get SUKUK Bond every now and then to fund road construction. So, it means they are doing well. Why do you want to disrupt such progress?

MOGHALU: They are doing so well that Nigeria is now the last on the human capital index. They are doing so well that Nigeria now has the highest numbers of people living in extreme poverty in the world. They are doing so well that we still have not more than 4,000 megawatts of power in a country of 200 million people. They are doing so well that about 11 million people have lost their jobs since this administration came into power in 2015. They are doing so well. Where do I end?

PT: That issue of poverty, how would you address it speedily, like few months after you step into office?

MOGHALU: No! Let me please be realistic, and let us all be realistic. My government as president of Nigeria will wage a decisive and successful war against poverty. Let me tell you how it will happen. We will be doing it over four years. I am not telling you immediately I take office as president everybody in Nigeria will be a rich man. No! But, we will focus on the structural foundation of poverty and attack those foundations. Those foundations are, first, illiteracy. When you have an educational system that is very weak, and does not produce the right level of human capital.

Second, skills. When you have a lot of the population without skills. Third, access to finance. When you have a lot of population without access to affordable finance.

These are the three structural foundations of poverty in Nigeria today. We will address them as follows.

One, we will reform the education system to produce human capital that is competitive for an economy that is led by innovation, not by crude oil.

We will reform the education system through teacher training, through curriculum reform, moving the curriculum more towards technology, science, skills, and entrepreneurship.

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We will reform how our young people learn to be more innovative, creative and original, rather than just cramming and reproducing stuff during exams.

We will invest in educational infrastructure. We will invest in education holistically by moving the budget from 7 percent, where it is today, to a minimum of 20 percent in my first year in office.

That is the 2020 budget, education will be 20 percent of it. Health care will be 15 percent of it.

Social infrastructure has been totally neglected in this country. And education and healthcare will form the basis of a society that is productive and making progress. We will establish skills training and acquisition centres in each of the 774 local government areas of Nigeria.

The point is to have our young people, whether leaving secondary school or leaving university (for those who don’t want to go on to university or tertiary education) to go and learn a skill, like being a mechanic or vulcanizer, IT skills in a modern technical way.

That makes them more easily employable or better able to employ themselves.

Thirdly, we will establish a N1 trillion venture capital that will inject equity capital into new ventures. This new ventures will be started by millions of people who are unemployed today, but cannot access capital. We have been running an economy that is capitalist but has no real capital. Credit, that is access to credit from the banks, is almost impossible for many reasons. Ii is either you don’t have the collateral to get a bank loan, or you cannot pay back at the interest of 25-30 percent. Venture capital is equity capital.

So, we will address that problem and we will address that from the equity angle so that you provide capital. Venture capital will invest in your business. They will co-own the business with you. They will make a profit, you will make a profit, and when they have made enough profit to cover their investment, they exit, and the business remains yours.

Many of these businesses created by thousands of young people will create millions of new jobs. So, when you talk about how we are going to address poverty, this is how.

We are going to, of course, open up the agriculture sector in many ways that provide new jobs.

PT: In the aspect of access to funding, while you were at the CBN, did you try to push anything in this respect to revolutionize people’s access to fund?

MOGHALU: Yes! As deputy governor of the CBN, I was in charge of development finance. We provided a lot of capital at the single digit interest rate to a lot of small businesses. But, in my own economic thinking, I have evolved to see that credit is not enough. You need equity investments in businesses. That closes the circle.

You have credits; you have equity. That’s the way it goes in a normal economy. The banking sector in Nigeria is 90 percent the source of lending or financing.

The economy is not structurally balanced with that type of situation. We need other types of finance. That’s why we have such a problem with access to finance in Nigeria. Banks are businesses and they must run according to their business models.

The definition of a venture capital fund is that they invest in risky new ventures. They may fail, or they may win. Out of that N1trillion, N500 billion will come from the budget for the social investment fund you talked about, which in my view, has failed.

But, it will be more productively used to promote production, rather than dependency, which is what the social investment fund actually does. It is a hand-out. I don’t believe in hand-outs. I don’t believe in giving a man fish. I believe in teaching a man how to fish.

The venture capital fund will teach a lot of young people to fish, rather than giving them hand-outs. N5,000 a month or whatever they claim to be paying, what does that do for you? N10,000 ‘Trader moni’, what does that really do for you?

A venture capital fund that has N1trillion can give you an investment of a N100,000, N200,000, N500,0000, N1million, if necessary, to start a real business that can employ people.

PT: You were CBN deputy governor, Financial Systems Stability. During your time and before you left, the MPR (monetary policy rate) was about 14 percent. It has remained there till now, and that might be the reason lending is difficult.

MOGHALU: The reason the MPR has remained high is because of the inflationary thread in the economy. One of the ways to fight inflation is to create tight monetary supply.

Unfortunately, that has consequences in terms of access to credit. In Nigeria, the infrastructure challenges make the problem even worse, because on top of the monetary policy rate, the banks will factor in the millions or billions they spend running the generators 24/7.

They are not non-government organizations (NGOs). They are businesses. So, they have taken that decision in order to fight inflation. That’s their own judgment. The Central Bank is supposed to be independent in its own operations.

That is why I believe we should not rely only on a credit approach alone to address the problem of access to finance. I recognize the inflationary pressure and the imperatives it creates for the Central Bank. We must go through a different way to provide access to finance in this country and that’s why the venture capital fund comes in.

I talked about N500 billion coming from the government. Now, another N500 billion will come from the private sector, so that it’s a public-private partnership, and the private sector arm of the partnership will manage the fund, not the government.

PT: What will your blueprint for the economy, which is so bad right now? How do you intend to revive the economy and make it work for Nigerians?

MOGHALU: I have said that my blueprint for the economy is based on a philosophical foundation. When people talk about a blueprint for the economy, the problem in the Nigerian economy and why it has not delivered any value in many decades, is because no leader in this country has come to leadership with a properly thought through economic philosophy.

If you don’t have it, you cannot have an economic vision, If you don’t have an economic vision, you cannot have an effective economic policy. If you don’t have an effective economic policy, you cannot have a successful institutional and market framework for the economy.

My presidency will be transformational, I repeat, because we will come with a philosophical foundation for the Nigerian economy. I believe we should be an entrepreneurial capitalist economy, that is to say capitalism with a conscience; not that the government will totally remove its hand for the steering wheel and the rich will be getting richer and the poor will be getting poorer. No!

It is not that type of capitalism I am talking about. But, it is in understanding that the free market is the best way to create value. Even China finally discovered this. Now, based on that economic foundation, we will attack the three secrets to creating a successful capitalist economy, namely making sure we have good property laws in Nigeria; making sure that the economy is driven by innovation, and third, making sure there is capital.

So, this is the path to economic transformation that we will take. We will also philosophically understand and apply to our economic policy. The difference between economic growth, economic development, and economic transformation are three different things.

Economic growth is just GDP (gross domestic product) growth. That is what most politicians focus on in Nigeria. But it does not address the problems of poverty, because a lot of that growth is not inclusive growth. So, we will try to create an inclusive growth environment that addresses the real questions of economic development. We will address the structure of the Nigerian economy by moving it away from dependence on crude oil rents. If I were to sum up my economic blueprint in one word, it will be that we will run an innovation economy in Nigeria. Inventions and innovations will drive Nigeria’s economy. We will invest in those inventions, pipe them into the markets and an economic boom will ensue eventually.

PT: Do you have confidence in INEC to deliver a free and fair election in 2019?

MOGHALU: Knowing what we know, seeing that the president has worryingly declined to sign the Amended Electoral Act, I have my fears. And my fears are precisely whether or not INEC will be independent enough to resist what is obviously the intention of the ruling party to rig the elections.

PT: On security, as Commander-in-chief, will you be able to criticize the military if they apparently violate human rights?

MOGHALU: Of course! Why should I not do that? My responsibility is first and foremost to the people of Nigeria, As Commander-in-Chief, I will hold the armed forces accountable to the standards of fundamental human rights they cannot be violated. Because if I do that, I will be violating the Constitution. So, yes, I would hold the military accountable.

PT: So, how would you deal with Boko Haram, the herdsmen and all of that?

MOGHALU: Well, on Boko Haram, we have seen that the current government has failed. They have not been able to contain Boko Haram, and the reason is because there is a massive focus on importing and procuring military hardware. There is not enough focus on knowledge in the Nigerian army. Knowledge in terms of intelligence, and how to handle delicate, sensitive military operations like counter-terrorism. We need to invest a lot more in knowledge in the Nigerian army, rather than just in buying weapons of controversial sources, quality or effectiveness.

But, weapons are necessary. I am just saying that the approach is not right. We need to involve the civilians in the areas affected by Boko Haram as their first line of defense, in terms of intelligence. I am not sure how effectively this is being done.

We need to win the battle of hearts and minds. We need to collaborate more effectively with our neighboring countries to stop the international dimensions of Boko Haram operations. We may need support from foreign powers to do this effectively. Have we done so? These are how I will approach the question of Boko Haram. On the herdsmen. When I become president herdsmen killings are going to end. They will not be tolerated, because anybody, any such act will be met with accountability swiftly.

There is no real political will in the present administration to end the herdsmen killings. I don’t think there is. The leadership of our national security agencies has been based not on professional considerations, but more on parochial considerations. That’s a problem.

My government will secure our borders. We are going to have a much tighter border security. Every border in Nigeria will be properly demarcated and we are going to have a proper manning of our borders to secure Nigeria. Our sovereignty cannot be secured if you cannot secure our borders.

Territorial integrity is a part of statehood, but Nigeria’s territorial integrity today exist only in name. People could roam into Nigeria at will, do whatever they like and we just sit powerless complaining.

PT: Are you going to build walls around Nigeria, if possible.

MOGHALU: I don’t want to use the expression that we will build walls. But, we will enforce the control of Nigeria’s borders. That I can tell you, like Donald Trump will say.

Now, the police will be reformed; to be made a 21st century police force, with the recruitment, training and equipping 1.5 million new policemen and women over four years. That is going to be a signature part of my approach to national security, a modern police force.

PT: Now, your preparedness, in view of the challenges you are going face. You said earlier that you are going to model your government and policies after those of some South East Asian and far-east leaders.

MOGHALU: I was saying I will bring the kind of leadership they brought to their country. It doesn’t mean I will do exactly what they did.

I am well-schooled in the art of manufacturing consent. The consent of the governed, the consent of the society into the vision that I, as a leader have. That is the first task of leadership. You must communicate with your people. You must tell the people your vision you have for them. You must establish a social contract, so that they themselves see their own responsibility in creating a change. It’s not a one-way thing. The citizens themselves have a role to play. They must hold leadership accountable. Transforming this country is not as impossible as we have been led to think, simply because we have had a series of incompetent leaders. That has conditioned us to believe that even basic achievements in normal society are impossibilities in Nigeria.

Our minds have accepted that we are children of lesser gods. We worship the gods of small things, like oil, and oil price, mediocrity and zoning, and all those types of things. I don’t worship at the altar of the god of small things. I am a man with a big vision for Nigeria and I ask Nigerians to give me the opportunity to let’s see if it will not work out.

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