Nigeria Held Hostage By Naira Exchange Rate (2) A critique of Alhaji Atiku Abubakar’s policy perspective on “What Africa Must Do…”
Every country has to trade with strength or be traded as a marginal presence in the market. Not even Mexico and Canada as next door neighbors of the US economy could escape the Trump business philosophy. China for a dull Trade war from Trump before Covid- 19 changed the tempo of the agenda. The power of the respective currency of each country speaks for their relative standing in the world’s markets.
As a former Vice President of Nigeria (1999-2007) and the 2019 Presidential Candidate of the People’s Democratic Party (PDP), Alhaji Atiku Abubakar owes his audience a high degree of executive insight into national policy debate. But he is equally well known as one of Africa’s emerging business Emperors. Thus any one listening to Alhaji Atiku Abubakar on the economy has a right to expect to hear views of how the Naira can be released from it’s prostrate position as the indicator of an economy held hostage. But did it happen?
The policy critique he published is arguably among the first well- informed, comparative and certainly purposeful analysis. It shows that Covid-19 presents a more dangerous challenge to the economy of Nigeria and Africa’s potential as a competitor in the world market. The presentation is brilliant and timely. It shows that Alhaji Atiku Abubakar’s reputation of running a back-up bench of sophisticated professionals, is quite intact.
The underlying thesis of the critique makes it clear that the first and fundamental responsibility of government (no matter where), is to create and sustain a productive economic base. That is how to gain constructive international attention and cooperation for the country. Nigeria is therefore likely to be worse hit, unless we can begin now to take credible corrective actions. Even that point alone, is eloquently brilliant. But there is more.
The critique shows that unfortunately Nigeria is ignorantly hugging a record of wasteful and unproductive institutions. In addition we have a record of woeful incompetence by our policy managers. No Nigerian institution has risen since 1999 to gain sustained international respect for thoroughness, fairness and efficient processes. It is not just with elections that our system shows gross incompetence. Other areas of national & international competition are affected. This situation weakens the nation’s capacity in both the domestic and external arena.
Alhaji Atiku’s piece also points out a direction that has gone missing in our national discourse lately: Nigeria is no longer a champion of any constructive agenda for Africa’s economic rebirth. Perhaps it is because government since 2015 has not committed itself to a measurable agenda to build our national economy, as a model to earn respect from other countries in Africa.
But the policy critique urges Nigeria to start now. We can present a credible multi-stakeholder focus on production and regional trade-drive, to expand opportunities for citizens of each country and investors.
There is the unspoken “what if”? Well, government can chose to start from the front or clear from the way. It happened in the US and can happen here too. For instance many State governments enlisted in the international climate change agenda, to defy Donald Trump who pulled the US (Federal Government) out of all such treaties. This policy critique by Atiku Abubakar is largely strategic for its Sector-based approach. But it appears superficial in two areas.
First, it ignores the urgency for Nigeria to lay a credible foundation for a competitive national economy. We don’t have any. Therefore mere crisis management of Covid-19 will not give our country the quick return to “normalcy” that every country is crying for. As I have shown with exchange rate battering of the Naira, Nigeria’s economy has not had any “normalcy” in nearly 40 years. China created a normalcy defined by improvement of opportunities for her citizens and moving hundreds of millions out of poverty, within the first decade of the United Nations millennium goals.
On the contrary, Nigeria’s economy has not had a policy- driven surge of steady progress, with growing investment in productive capacities and expansion of access to business opportunities for citizens. We have not had an economy marked out by a sustained upward improvement in the exchange rate of the national currency. Rather our country achieved the tortuous status of becoming the poverty capital of the world by 2017.
The irony is that no government in office has made it one of it’s priorities since 1999. And we should ask: why not? Perhaps it is because our political elite are groomed on a culture of consumption and a life of luxury. They have never been pushed to grow an economy.
The result is that after each adminstration’s tenure, most LGAs, States and even the Federal government has a worse productive economic base than it’s predecessors. Yet those who managed each level of government into greater poverty get themselves adequately compensated with a mouth watering retirement package. Meanwhile the Civil Servants who are left with the rot, are robbed daily by a diminishing Naira. The result is that 20 years after democratization, the political elite have left Nigerians with an economy that pushes the citizens into a worse hostage status with each new administration.
Not surprisingly one of the key questions the Atiku proposal dodged, is the need to encourage states to build internal economic focus and muster momentum to change the direction of our economy. States spend about 40% of national revenue from Crude oil. In 1999-2020, most state budgets present themselves as the spending pipeline and not a productive corridor of the national economy. That is the height of economic ignorance and management mediocrity.
How do we get them to mobilize a dedicated percentage e.g. 30-45% of revenue per annum, to stimulate productive Joint Venture investments by states? They will create sustainable career jobs and a competitive business environment as was the case (1972-1983) when the Naira had respect. This can immediately energize the national economy through sustained collaboration in building private sector capacities. It will infuse performance focus and competitive capacities in different sectors of our national economy, including Public Sector management .
There is also an intriguing stakeholder challenge on the domestic front of each political party. In Nigeria’s Second Republic (1979-83), each political party was identified by citizens based on what work was done in each state where the party was in power. So the relationship framework of the time made Governors a collegiate type of stakeholders working with their party’s national executives. In such an environment Alhaji Atiku Abubakar’s party would have directed state governments where it is in power, to implement smart economic measures as implied in his policy critique.
The problem with our democracy this time, is that political parties are powerless before state Governors. Each Governor owns the party in his state and does not seem to submit to the authority of the national party machinery. So our leading political parties that have won political power in any state seem to find themselves under the control of their Governors. Thus we have a weak stakeholder network between national party machinery and state governments. Of course LGA Chairmen are still treated by Governors as their Class Monitors.
Secondly, Alhaji Abubakar’s policy critique also appears weak for underestimating stakeholder relationship issues between Saudi Arabia and Russia. There is an on-going “Premier League competition” and struggle for control of a new political economy in the Middle East.
Russia is eminently poised to profit from Trump’s apparent lack of international relations’ sophistication or a deliberate oversight masked by “rich boy” arrogance. It appears to be pushing the US to the fringe in the region. Saudi Arabia, Iran, Syria and Turkey are now standing as leading pawns on a regional Chess board that is fast heating up.
What Nigeria must not lose sight of is the fundamental transformation of the Arab economy in the oil market. In recent years, Arab oil producing nations led by Saudi Arabia, have moved out of their hostage economy status. They are no longer a dependent and rent- claiming crowd of mere oil producers in the global market. Rather they are now becoming competitive as manufacturing and high tech emerging economies. They are part of an ” OPEC plus” community whose players have largely scaled up their economies. Nigeria and Angola must be leaders of that redundant wing of “OPEC plus”, that has no economy to compete with. So the leverage Alhaji Atiku Abubakar’s thought we could exact on Saudi Arabia is no longer what it used to be.
It is tougher for Nigeria to navigate the terrain because of the near collapse of multi-laterism that once defined NATO and it’s allies. Today lack of trust and inadequate level of consensus building, has destabilized NATO considerably. Donald Trump’s unilateralism and a near blind push of “America First” philosophy, is designed to capture technology market advantage for the US, especially with 5G as the “ripe fruit in view”. China is no charity organization either. It trades on it’s own terms and as it has shown with the US, the country’s leaders know when to push the throttle for maximum advantage.
President Buhari’s administration has to encourage non partisan national stakeholder community of Nigerians at home and in diaspora to do something different. Nigeria has to build a deliberate new economy from the states and upwards to federal level, to put our citizens first. Let such a stakeholder platform begin to emerge by proposing win-win options with different countries. It needs to set up a clear agenda to transform the Nigerian economy, to give our citizens competitive opportunities. Such options must invest the Naira with purchasing power to raise the quality of life of our citizens and their natural right to dignity.
There is nothing on the table at Federal or state level in that regard. Alhaji Atiku Abubakar only scratched the problem by drawing attention to it. Let us seize upon the idea and cut a clear path forward for the economy at Local Government, State and Federal levels.
Brown, a veteran journaluist is emeritus national president of NIPR and Managing consultant/CEO of GRAIN Consulting, PH