Saibu: Nigeria needs fiscal restructuring, not summit



What do you make of the call for a national economic summit?

I strongly believe that we don’t need an economic conference. We are not lacking in ideas or programmes. Government has sufficient information on documented programmes and policies that have been suggested over time. What they can do is to gather a group of economists to harmonise their policies and come out with a roadmap. Calling people to come for a conference may end up being a political jamboree. We might just end up seeing them bringing their political friends together. I don’t think we need that.

Last year, the Nigeria Economic Summit Group (NESG) held its annual conference in Abuja, which even past presidents attended. They analysed how the economy can be galvanised. They examined the problems and came up with options that can be adopted. There were far-reaching decisions that were taken. Similarly, around the same time, the Nigeria Economic Society (NES), a body of economic professionals in Nigeria, met for a discourse. They also made some good recommendations and stressed on things to be done to revive the economy. They even volunteered to do research on the economic trajectory of Nigeria. That wouldn’t have cost us much money. But the government has not done anything about that. We are a country that ignores Research and Development (R&D) and that is why we find ourselves in these kinds of problems.

Government only needs to trust indigenous researchers and scholars. They need to take their research output and examine them. They need not engage in any profanity of holding a summit. We don’t need that. They can consult professional bodies and ask them to come up with position papers, which they can harmonise. It will cost government little money and they wouldn’t bear the burden of fending for all of those that would come for the summit.

Wouldn’t we be having conflicting recommendations?

The NESG may not force the government to take its recommendations but they came up with the problems, say what can be done and how to carry on about it. The recommendation of the NESG was not too different from that of the NES. So, we have people thinking alike. They just have to commission some people to follow up with the recommendations and get a blueprint.

Also, we have the Nigeria Institute of Social and Economic Research (NISER) in Ibadan and other research institutes scattered across the country. Government gives them subvention every year. What are their roles? What is the role of the National Planning Commission and the Central Bank of Nigeria (CBN)? Why can’t the Ministry of Finance have a research unit? All these people can be commissioned to do this.

I believe that government already has capacity, human and material alike, to do a serious prognosis. And based on that, proffer solutions. This is cheaper and more effective.

The agitations for a summit came on the heels of the sliding fortunes of the naira and low government revenue. Are you saying Nigerians are wrong to have made such a call?

What did the call for National Conference on Political Reform achieve? The same people who are calling for the summit were those who called for the national conference. If there is another reason for the call to convene a summit, then they should convene one, but if it is to solve Nigeria’s economic problem, I don’t support it. Any of the numerous research centres can be commissioned to do what these people are calling for. I have not seen a country in the world that has the kind of problem that Nigeria has and engages in a summit. They commission and fund their scholars or academics to do research. We need to inculcate and promote the habit of research. In fact, the better way is to subject the outcome of any of the research effort to a town hall meeting. It is not something where you commission people to come and speak English.

If a research was to be commissioned or a summit held, what should be the focal points?

There are three things I would advise government to focus on, either through commissioned research or a summit. We need institutional reform to make processes more effective. We need to consider models from other countries. How did these countries get around issues with their institutions and managing of resources?

As a matter of urgency, we need to need to consider tinkering with fiscal federalism. We need to shift responsibility from the federal to the state and local governments. People are more responsible and accountable at the local than at the higher level. We can see that Nigeria has the opposite of that situation. That is because the states have lesser responsibility and more money. If majority of activities were to be handled by the state and local governments, automatically people would call them to account. We need to fix our fiscal economy, not political structure. We need to restructure the fiscal responsibilities of the three tiers of government.

The states have to be the anchor of the economy. There is no country where the Federal Government carries the bulk of the fiscal responsibility. It ought to be the states. That is also where we need institutional reforms.

The third is how to diversify the economy from oil. One key area government has to look at, according to my research and observations, is the focus on small enterprise. Government has been running on a misplaced priority focusing on small-scale businesses. Small-scale businesses are primed to sustain the service sector; they cannot sustain industrial and manufacturing sectors.

Government has to find a way to partner the private sector to establish large scale manufacturing industries that would have the benefits of economics of scale, employment and output. They need to identify sectors of the economy where they can encourage large-scale manufacturing. That would mop up unemployment. They need to work with the private sector on this and give them incentives that are measurable and easy to monitor. They need to encourage people to invest with minimum cost. The development model needs to be tinkered from small-scale to large-scale; else we would be missing the point.

The states are said to play a major role in the proposed summit, and with government talking about focusing on solid minerals to diversify the economy; do we see a joint effort at weaning Nigeria off oil?

I would advise that government should not explore opportunities that would subject us to where oil put us. If we explore another solid mineral, we may be in for another resource curse. I think we need to move from the primary sector to manufacturing. That is where the competitiveness of the economy is vested, not in primary products. If we eventually get another goldmine, we would just be creating the opportunity for some people to hold us to ransom and create another form of militancy. It is going to be the same thing. We should look at the things that are basic to Nigeria and encourage the domestic production of such through large-scale enterprise that would be powered by the private sector but supported by government.

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