Aigbokan: Government should involve economists in managing economy

Professor Ben Aigbokan is the President of Nigeria Economic Society (NES). In this interview with CHUKA ODITTAH, he spoke on the implications of the inability of the Federal Government to put in place an economic blueprint to drive its policies.

What are the implications of the absence of an economic blueprint for Nigeria?
An economic blueprint really is a document that provides a guide as to what the government is to pursue and the way it will go about pursuing it. At the moment, such an economic blue print does not exist. You know for instance, government has been talking about taking a loan for sometime now, if there has been an economic blueprint on ground, it would have shown the details in the context of the targets of that loan and the particular instrument to be used in actualising that objective. So, that’s the kind of thing a blueprint does.

Do you think there is a problem with the economic management team as presently constituted?
The main issue is that economic management is the duty of economic experts. To have a genuine economic blueprint for instance, you need external hands or experts working with the internal or resident experts. What this does, is to bring findings or reports to a standard. Because what the internal expert may not be aware of or are aware of but downplays, will be seen differently by someone coming from outside. This is why a blueprint is best prepared by external expertise. To answer your question directly, the Nigerian Economic Society believes that non-economists dominate the national economic team. They include accountants, lawyers, engineers and other professionals. This arrangement does not augur well for proper economic planning. That is what we are saying. Most of these people are either businessmen or politicians. Because they are politicians, they tend to have short-term horizon.

Do you support total removal of subsidy regime as canvassed by the IMF and World Bank?
Yes, subsidy should be removed. Only a few capitalists are benefiting from it. It is also habouring a lot of corrupt practices, which is still what government is fighting to put a stop to. We’ve heard of importers bringing PMS into the country, they enter them in the records only to ship them out again, just to increase profit without necessarily supplying any product. So subsidy breeds corruption indirectly to the disadvantage of the system.

Yes, there are fears that total removal of subsidy will push inflation high, but that is where government social protection intervention comes in. This social protection support could be conditional or unconditional in nature, to cushion the effect of subsidy removal

Is it too late to make amends and draft in economists into drawing up an economic blue print?
No, it is not too late. Until the Federal Government gives economists their pride of place in the supervision or management of the economy, most of government policies will not be able to deliver durable outcomes. It is about core competence not political appointments. Many of the actions of government, no matter how well intended, will be disjointed, unconnected together without an economic blue print. And that is exactly what we have seen so far. In the absence of an economic blueprint, you can’t see these actions as they interconnect in one single glance. In Nigerian equilibrium analysis, the second and third effect works out how one action will impact on another to infinite point, so to say. But a partial analysis, which is what we seem to have, will only give some details on certain variables and their outcomes. Look at the issue of foreign exchange rate for instance; it was projected to be N280-N285 to the US dollar. But look at where it is now. Other factors were not brought in to work the total possible outcome that we have now. If we had an economic blueprint, it would have guided us through a series of objectives. In the process, you are able to sort out what one objective will have on another, almost in comparative terms.

Do you think government is facing any difficulty in this regard?
Well, I dont know. What I know is that it took a person like Dr Ngozi Okonjo-Iweala to let the government know the importance of an economic team and to draw up an economic plan during her tenure. The team was made up of economists and ministers. This is a government, which showed interest in the role economists’ play, in the development of the economy. But it does appear that the current administration does not have full confidence in their contributions, which explains why they have two or so economic advisers from the diaspora. Whereas, we need more economic experts who are on ground with enough experience. The government seems not to be comfortable with drafting core economists in. Economists are trained to have core competency in management of economic issues, not politics or guess work.

Do you know that the issue of lower oil price and devaluation of the naira are the handiwork of western countries? So, we need to have core economic experts to read situations correctly and proffer solutions that will bring favourable outcomes to the country. The economist is the one trained to have this kind of competence. Look at where the value of the naira is today. Nearly N500 to a dollar. It is purely a matter of poor economic analysis subtly proposed to us by the IMF, and we fell for it.

Having an economic team dominated by non-economists does not augur well for proper economic planning. That is what we are saying. Most of the people on the economic team as presently constituted, are either businessmen or politicians. Because they are politicians, they tend to have short term horizon. The tenure of office for politicians is basically four years.