By AYO ALONGE
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Two economic experts and university lecturers have spoken on the clash of views expressed by former Anambra State governor, Peter Obi and the Minister of Finance, Kemi Adeosun, on the management of the Nigerian economy.
Both Obi and Adeosun spoke at The Platform, an august event convened by the Senior Pastor of Covenant Christian Centre, Poju Oyemade. This year’s event had Vice President Yemi Osinbajo in attendance.
In their respective comments, Professor Abel Awe, a senior lecturer in the Department of Economics, Ekiti State University, Ado Ekiti and Dr Adebayo Adedokun, a lecturer in the Department of Economics, University of Lagos, both agreed that Obi’s prescription for national economic management, which emphasizes pursuit of a committed savings culture, as the best way that should be followed by any government in power, if the economy is to be revamped.
In his presentation, Obi who is acclaimed to have meticulously managed the finances of the state when he held sway in Anambra State, lampooned the Buhari administration for lacking an appreciable strategy in the area of financial management and economic development.
While in government, Obi managed the resources of the state in a cost effective way, which entailed cutting down on unnecessary expenditure and other forms of waste, to conserve funds and plough back such savings into capital market investments for the State.
Addressing the attendees at the event, Obi stated the federal government had encouraged profligacy among governors. He urged the government to improve on its poor savings culture and epileptic cost cutting system.
His words: “We are borrowing to build flyovers when many roads are bad. We even borrow to do decorations on them. I call on the Minister of Finance, please stop approving all these loans that state governors are borrowing, talk to them on cost of governance. Section 162 of our constitution did not help us to save because it says to share all but even the unions of motor park touts save money. No nation can survive without savings. The Sovereign Investment Fund Act says we should save our excess revenue but you and I know there can’t be excess after sharing. They (the federal and state governments) are about to share $1.65bn out of the $6b excess crude deduction. What for? The Nigerian National Petroleum Corporation, NNPC, and her sister companies are remitting $21.8bn and have scheduled time for payback. I appeal that you should not share any money because they are the ones we are now finding in houses.
“Minister, if we save $2.5bn from 2018 to 2030 at 7 per cent reserve income, it will give us $55bn. This will enhance stable exchange rate. Let’s start the savings process with the money about to be shared. We need to invest aggressively in education because out of the 57 million uneducated children in the world, 10.7 per cent of them are Nigerians. Even Facebook’s budget for the year is bigger than our nation’s GDP. Send funds meant for education to the school heads and parents directly not commissions or ministries or else the money will go through a transit of many checkpoints,” he said.
Continuing, Obi gave an account of his stewardship and how he effectively managed the economy of his State: “While I was the governor, I bought computers based on one computer per 10 students costing N2.4 billion. The Federal Government can do the same, because the money to do it is available. Government does not create jobs, but rather it facilitates them by promoting SMEs and encouraging local production. This government killed over 80 per cent of failed private enterprises in Nigeria. Imagine a governor who bought 50 SUVs for traditional rulers from a private firm for up to four years now and has not paid back making the company to sack 200 workers and acquired over N732 million in debt. This was after he had collected all the traditional titles and still taking more.
“In my own case, I gave Innoson Vehicle Manufacturing Company Limited an order to supply us 1000 vehicles and I paid the company prompt cash, even amid fear and quality misconceptions. None of those cars had any issues despite the people’s fear.
So, if I must say okay to the government in promoting Made-in-Nigeria stuffs, let’s first of all go to all government officials and governors’ houses and make sure 60 per cent of the fittings and everything in those houses are made in Nigeria. If any contractor says I owed him when I left office, let him make it public and I will resign from politics. If you see any house belonging to Peter Obi apart from the one in Onitsha, which is official, confiscate it.”
On the contentious issue of security votes, which most state governors treat as their private “piggy bank” Obi declared: “There is nothing in the constitution called security vote, what we have is contingency fund and it’s being abused. I gave 257 Anambra secondary schools N10 million annually, N1billion to hospitals and health colleges. I had only N2.5bn as security vote and I should be invited to account for it. They searched my apartment in Ikoyi and saw only my wife’s belongings, not even my watch and they said I didn’t live there. I have only two pairs of black shoes I bought for $49.99, which I travel with everywhere to avoid being hurt, which is the reason for having shoes and a wristwatch I bought 18 years ago; why buy another watch and drop it on the table. What time is it keeping?
“My sadness is not just that I live in that block of apartments, my worry is that the money was dumped and wasn’t yielding profits. If the owner had kept it in the bank, it would by now have yielded around $7bn which is N2.8bn that can cater for a state’s annual educational budget.”
When Sunday Sun spoke with Professor Abel Awe, a senior lecturer in the Department of Economics, Ekiti State University, Ado Ekiti, and reeled out some of the claims Obi made during his presentation, he opined that if what Obi said was true, then the claims were laudable and should be welcomed in the interest of improving on the country’s foreign reserve.
Awe said: “If all these claims by Peter Obi were true, then that is good governance in display; an epitome of leadership by example. No country can experience inclusive growth without capital formation. Capital formation is the outcome of accumulative savings. We, as a nation, have experienced economic booms right from 1973 when Nigeria joined Organization of the Petroleum Exporting Countries, OPEC. Successive administrations, be it military or democratic, squandered all the windfall gains from these booms. Out of all OPEC members, we have the least external reserves, energy consumption per capita, lowest human development index, highest human suffering index and highest cost of governance and the costliest democracy across the globe. We need more people like Peter Obi in governance provided his claims are true.”
However, in a reprisal attack, the Minister of Finance, Kemi Adeosun, who was apparently nettled by Obi’s comments, defended the economic policies of the present administration while heaping the blame for the country’s woes on the Jonathan-led administration, noting that the former governor had served on the economic team of the past administration. She tackled Obi for his regular criticism of the savings culture of the Muhammadu Buhari administration.
“Coming to The Platform to preach cutting cost and savings when he (Obi) did not preach cutting cost to the past administration is hypocrisy which I classify as cardinal sin. Obi is a patriotic Nigerian, no doubt, but a few of those things he read out were not accurate. During his first appearance at The Platform, he spoke on cutting cost of governance and I made a post titled, The 10 important things Obi did not tell us, in reaction.
“In that post, I suggested to Pastor Oyemade of the need to always provide an avenue for interaction and to have a speaker with contrary views from the previous speaker. Peter Obi at The Platform today spoke as if Nigeria started existing in 2015 when President Buhari was sworn-in. There was nothing new Obi said today that is different from his first appearance on The Platform – cutting cost, saving and borrowing. That’s Obi for you. Hypocrisy is when you preach what you did not practice. Before 2008, oil was $51 per barrel and the past government sold oil at $120 per barrel and did nothing with the extra earnings.”
She added that 90 per cent of the previous government’s expenditure was on recurrent and only 10 per cent went to capital projects such as road, rail, power, housing, and the like.
“Remember, Peter Obi was a member of former President Goodluck Jonathan’s kitchen cabinet. He was Jonathan’s special adviser on finance and a member of the economic team. In one of the fiscal years I was Finance Commissioner in Ogun state, the state government spent N20 billion on road projects while the federal government which Obi served as a member of its economic team along with Ngozi Okonji-Iweala and Olusegun Aganga, spent N19 billion. It is obvious that the past administration’s waste brought us to recession and Obi was part of it,” she said.
On his part, a lecturer in the Department of Economics, University of Lagos, Dr Adebayo Adedokun, said: “National savings culture, as suggested by Peter Obi, is a laudable idea and makes good economic judgment for a country that is experiencing economic boom. This kind of advice may, however, be detrimental to the health of the economy that is in recession. In business cycle theory, getting out of recession requires big government activities in terms of spending. However, the spending must be directed towards productive expenditure such as closing the critical infrastructure deficits gap in the economy. I support the present administration to borrow to finance quality infrastructure because of its trickle down effects and the multiplier effects in increasing economic activities as well as the growth potential. The borrowed fund as well as the realised funds from various government activities must be monitored appropriately to avoid incidence of embezzlement that was our bane in previous government efforts in revamping the economy. We need to diversify the economy away from crude oil, develop agriculture and solid minerals; provide soft and hard infrastructure, invest in human capital vis-a-vis education, health and social welfare. “We need to reduce the cost of governance, build up our foreign reserves, negotiate new bilateral trade agreements that will ensure exports of non-oil products. All these will stabilise the exchange rate of the naira to major convertible currencies, particularly the United State dollar, the British pound sterling, the Euro, etc.”