Ugolor: Look beyond APC to solve economic problems

Rev David Ugolor is the Executive Director, African Network on Environment and Economic Justice (ANEEJ). In this interview with ALEMMA-OZIORUVA ALIU, he suggested way out of the economic recession and what to do to earn the confidence of investors.

After over one year in office, the Federal Government is yet to come out with its economic blueprint, what is your take on this?
The absence of a national economic blueprint has led to different interpretations, which is not good for the country and it has contributed to the problems undermining the potential for economic growth. As you know, the country depends on only one major source of income, which is oil and the recent crash of oil price has negatively affected everything. The country would have overcome the current recession if President Buhari and his team have anticipated this present situation and designed an economic plan that will respond to it, and help other actors like the private sector to build confidence and remain in the system.

But unfortunately, that did not happen and as soon as the country’s currency started depreciating, foreign investors started moving their investment to other jurisdiction.  As you know investors are not charity organisations and their primary objective is to make profit.  Once they notice uncertainty they move out of that environment.  The only way to attract and keep foreign investors, which remain one of the major sources of generating economic growth, is to implement stable economic plan that will assure both foreign investors and local businessmen of the safety of their investment.

Today, we are not only operating without any economic strategic plan, the problem of corruption is yet to be solved.  With the corruption, we are also facing the Niger Delta and North East conflicts, which have drained the country’s resources. The resources that ought to be used to build infrastructure for economic development, are currently going into buying arms for the security in both region. The crisis is also not helping the country and nobody will be happy to do business with such big domestic crisis. I strongly believe that if this government was serious, they would immediately come out with a roadmap for the economy and use that to engage all stakeholders on how to overcome the crash of oil price and other regional crisis.  A roadmap will also give confidence to potential partners to identify possible entry point for business and policy option.

What we are doing presently will not help the country and until the government decides to come out with a clear and coherent economic strategy. No serious development partners or foreign investor will risk their scarce resources for Nigeria. The attempt made by the government to attract Foreign Direct Investment has hardly yielded any positive result. The economic fundamentals are not very encouraging and until we decide to take drastic steps, things will not improve, particularly the high level of unemployment and inflation, which are big threat to economic growth.  President Buhari must look for experienced technocrats with history of development agenda, to assist him to reposition the country through a well thought out economy plan.

What do you think is the problem with the economic team headed by the Vice President?
They are not involving broad stakeholders and coupled with the problem, which I mentioned earlier on, they may not achieve much. Until we look for a comprehensive framework that will provide answers to these issues, including an economic road map that will guide the country out of the current economic recession, the present economic team headed by the Vice President, may not achieve much.  We also need a collective effort, which will be inclusive.  The President has to look beyond the APC and also build a coalition of Nigerians that will cut across the political parties, and also avoid ethnic/religious label.  The problem of the economy requires looking beyond APC. For instance, I have also suggested that we must look for an innovative way to tackle the problem of corruption. The government must find a way to reach out to the opposition parties and consider some of the good people who can add value to the country’s economy, for appointment. Unfortunately, that is not happening now and we are bound to fail if we ignore this fact.

Why should it take so long to come out with an economic policy direction?
I think the President is still relying on his past experience, which may not work in this present situation. The sooner he takes a drastic decision to review the present economic model the better for the country. Some of the decisions on the economy have not been well thought out and you have seen the consequences. Take, for example, the Foreign Exchange policies, which currently provides avenue for round tripping.

Mr. President would have to change the current model because it is not working. We should be able to speak the truth to our leaders because people are suffering and there is the need for government to take urgent action to address the problem, otherwise, we will continue to face the crisis in the Niger Delta and North East region.  And I pray that the South West and other peaceful regions will not also join the crises.  If you look into the North East and Niger Delta crises, there are a number of conclusions we can take from it. One of these is that the high level of poverty in these regions, is feeding these crises and also the government is not able to apply the resources for development projects. That brings us to the question of corruption and you would be wondering why the government has not been able to come out with a coherent policy to deal with the problem.  I also think the government of Buhari will need to reach out to the party members and to adopt an approach that will encourage their members to support the government.

Do we need the IMF/World Bank to remind us of a blueprint?
I am sure you are not relying on the faulty report from one of the newspapers, because I don’t see that happening. Both World Bank and IMF have an internal tools with which they communicate their concerns to their members and the case of Nigeria will not be an exception.

The IMF/World Bank is not known to champion welfarist policies but capitalism and that is not what Nigeria needs now. World Bank and IMF have started to shift position on some of their policies particularly after their experience from the implementation of the Structural Adjustment Policies (SAP).

The World Bank and IMF’s SAP policy was a major failure in Africa and most Africa countries have learnt their lessons by not adopting without questioning any policy prescription from them. As you know most of the countries that adopted structural adjustment programme were forced to implement it because of the debt crisis.  That was what happened in the case of Nigeria. Before the Paris Club and the London Club approved the debt cancellation for Nigeria, an economic programme through policy support instrument was agreed on, which in my own opinion was a disaster.

During the debt negotiation process I was very sad that the country accepted to pay the huge amount of $18billion and also accepted the IMF backed policy support instrument (PSI) as a condition for the debt cancellation.  So, most Africa countries could not resist the implementation of neoliberal economic model because they were looking for debt relief and foreign direct investment.  Countries were told that the only way to attract FDI was when you implement World Bank/IMF policies, which never achieved its goal.

To answer your question, I don’t think is right for Nigeria to embrace all the IMF/World Bank policies, which in most cases is to open up the economy for external competition. Unfortunately, domestic business will not be able to compete and they lost out to foreign firms that come with state subsidy. We most not allow the government to ignore the need to look beyond the economic prescription of World Bank and IMF.