‘Focus, prioritisation of resources crucial for Nigeria’s growth

Mr. Zeal Akaraiwe is the Chief Executive Officer of Graeme Blaque Advisory, an organization that builds value by unlocking concepts that create new income streams and pathways to curb balance-sheet volatility. In this interview with CHIJIOKE NELSON, he says focus and resource prioritisation is key to economic revival.

Buhari’s government has no definite economic policy direction. Do you agree?
I will not agree totally that the Buhari government has no definitive economic direction. As far as I am aware with regards to a mapped out document, the Buhari administration has the MTEF 2017-2019. We would almost certainly have a one-sided debate around the substance and viability of the document in achieving real executable growth. When it comes to direction of the economic policy, we have had that written as a document in the past, but indices have shown that we have made no progress. We only need to get our focus right now than the ceremonial documents and it won’t take too long to get us on the right path. Yes, it is going to take a lot of hard, focused and deliberate work to steer this economy out of the quagmire that we have meticulously dug to our disadvantage.

What exactly is the problem with the Vice-President-led economic team?
I may not “exactly” state what the problem is, but based on the problems we are experiencing in the economy, I would lean towards the possibility that we have underestimated the economic circumstance of the country and/or misunderstood the complexities of the inter and co-relations and co-dependencies that lie within the larger economy and the financial markets. It’s easy to understand that an economy has peculiar rules, laws and behaviors and it takes a combination of career and practicing economist to properly dimension a problem and then forge a workable solution.

It is however, not-as-obvious to most that the same principles of expertise laws, tactics and requisite experience applies to the financial markets. I imagine that because we all earn or pay interest and buy or sell dollars at some point in our lives, we falsely believe there’s no expertise required in steering us out of a financial markets crisis- the composition of the economic team seems to reflect this point.

Personally, I have a lot of respect for the individual achievements of most of the members of the economic team, but I do not think that as a team, there is the right combination of economists and financial market experts to be able to seek the relevant data, dimension the problem, understand and interpret the interrelationships and impacts of decisions and execute a workable strategy with the authority to act within appropriate timeframe. There are some circumstances within the financial markets where decisions need to be made within hours.

But for the first place, why the delays in having a definitive document? What is the way forward?
Simply put, it shouldn’t be this way. President Buhari got sworn in on 29th of May 2015 and as a military tactician and strategist, he didn’t need prompting nor convincing to see that the war on Boko Haram needed swift, deliberate and precise actions. He took just six weeks to change the military service chiefs and the results were almost immediate.

However, in waiting for eight months to appoint ministers and longer for an economic team, showed that the urgency of the economic and financial markets crisis was neither well understood nor appreciated. In reality, the global economy was waging war on the fragile Nigerian economy and considering the fact that we didn’t prepare by way of savings, we should have tackled this economic war with at least, the same urgency which we tackled the insurgency. Our economic problem is best described as a cancer, which the longer you delay in dealing with, the worse it gets, the more expensive to tackle and the more grievous the damage. When eventually you are left with no choice but to face it, your options for remedy will be limited, expensive, painful and without guarantee of success.

For a direction, we need to gather and analyse reliable data, properly dimension the issues, plan a workable exit plan and do all that in a manner that communicates confidence to all. We also need a team that’s cohesive, with complimentary skill sets and with the relevant authority and inclination to act proactively and in good time, for the greater good. I personally believe that we can still map an effective exit strategy within few weeks from now.

Do you see non-oil projections coming to reality this year given the state of the economy?
It is going to be a very difficult balancing act for the government to execute an effective tax revenue policy in a period of stagflation when industries need to be stimulated to perform to ensure that employment and production levels stop worsening. We need to make the right sacrifices between a more accommodating tax regime, where it will stimulate growth, and government revenues.

How hopeful are you for a return from recession before 2019?
From a statistical point of view, I expect that we would show improvement in some economic  indices by 2019. Emphasis on economic indices and not a translation to the common man. We should not be too focused on merely coming out of a “statistical” recession. We idly spent at least three years watching our main economic indices slow, rise, decline and then crashed. There’s a lot of hard work, long term planning, strategic thinking and effective communication required to ensure that there is unison in purpose across the entire government and citizenry. We need to prioritise and focus resources on increasing our local productivity capacity, removing all the bottlenecks impeding it and also incentivising the real sector.

The real sector needs funding and foreign exchange, but we also know foreign exchange is hard to come by and for those who manage to get by without it, still can’t access funding. The Federal Government is currently crowding out the real sector by issuing treasury bills at a yield of 22 per cent, tax-free, risk-free. But with a 30 per cent CIT rate, a bank will need to lend at 31 per cent to compensate for the tax. Banks will simply shut down their lending books. There is need for real change.