After the much-televised 2011 heated fuel subsidy policy debate which featured yours comradely and Femi Falana (SAN) on the one hand and the then governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi, and then ministers Ngozi Okonjo-Iweala (finance) and Diezani Alison-Madueke (petroleum resources) on the other, it is unthinkable that I will be back in binary discourse with the now respected Emir of Kano. As a debater, I am certainly fatigued on the notorious issue of fuel subsidy spanning some three decades. Above all, the constitution envisages Nigeria as a functioning economy, not a debating society. It’s time to get Nigeria working, not talking!
Undoubtedly we had some significant areas of agreement. At the time it was not fashionable to do so, I openly backed Sanusi on CBN’s autonomy, which some legislators were desperate to undo following Sanusi’s timely damning remarks on cost of governnace. We were on the same page also on the risk management and corporate governance of the banks, prosecution of some fraudulent corporate bank executives, trillion naira bailouts (read subsidy) for some few distressed banks under the auspices of AMCON, and Sanusi’s interventionist long-term development financing in some sectors.
Recently, Emir Sanusi, after receiving a Lifetime Achievement Award at the All Africa Business Leaders Award West Africa in Lagos, reopened the debate on the twin recurring issues of fuel subsidy and naira devaluation. The Emir of Kano was certainly right to have advised the in-coming ministers against policy “flattery” of President Muhammadu Buhari. However, President Buhari must also be wary of policy dictatorship that will further undermine growth and development, and worsen poverty in the country. The choice for the president is not between policy sycophancy and policy ambush. The twin policy recommendations of naira devaluation and removal of “fuel subsidy” as recommended by the respected Emir amount to some policy dictatorships that must be rejected by President Buhari.
The naira in recent times has lost its value drastically. The ever-volatile devalued average rate of N200 to a dollar has further eroded wage income of millions of workers (many with unpaid monthly salaries), worsening income poverty. Devaluation has increased the cost of domestic production, fuelled price inflation and undermined the competitiveness of locally surviving industry, leading to loss of existing few jobs. To recommend further naira devaluation as Emir Sanusi did is an unacceptable exchange rate policy overkill. Devaluation is a false economics in a non-exporting, import-dependent economy like Nigeria. We import everything, including industrial inputs, while we export no industrial good that can take the advantage of devaluation. I recall that in Febuary 2011, Sanusi, then the CBN governor, said as much to resist the pressure of the International Monetary Fund (IMF) to devalue the naira.
We must rethink outside the box of neo-liberal IMF’s unhelpful policies of devaluation (which he commendably rejected as CBN governor). Nigeria needs a new paradigm of bold policy choices and new star-words in place of boring ideological mantra of devaluation and subsidy removal. We must urgently re-industrialize, stop the criminal wholesale smuggling and dumping of inferior goods, lower the interest rate, ensure long-term development financing, de-subsidize the political/ruling class, reinvent refineries, put restrictions and outright ban on goods on which we have comparative advantage (such as textiles, rice, poultry goods), re-invent the railways, fix the un-motorable roads through public works, re-electrify the country and create millions of decent jobs for youths who have proved to be vulnerable to insurgency, kidnapping and violent serial gangsterism. Nigeria needs a holistic, bigger plan for development like China, India, the EU, etc and not micro-mutually destructive policies of devaluation and subsidy removal.
The CBN Governor Godwin Emefiele is right in managing the scarce foreign reserves through restrictions on some frivolous imports. Nigeria more than any nation currently suffers huge capital inadequacy, with foreign-currency reserves sharply falling by some 27 percent to $29 billion since the end of last September. CBN’s measures aimed at capital application and capital control will definitely enhance domestic production in place of unhelpful luxury imports. It will also save the nation the current capital flight averaging some N1.3 trillion ($6.5 billion) a year (almost half of national budget) on unnecessary job-killing silly imports – from private jets to rice, wheelbarrows, Indian incense, Geisha (canned fish) and toothpicks, to eggs and bottled water! Central banks worldwide ensure public control of capital for development without which capital on the loose can finance underdevelopment, cocaine growing as well as finance terrorism, as America painfully came to realize in the wake of 9/11.
For President Buhari, the point cannot be overstated: fuel pricing is a matter of TRUST which he has creditably kept so far. The president should resist policy ambush. Nigerians voted for his commendable resolve to scrutinize so-called subsidy bills, ensure products’ supply and distribution at affordable price. Nigerians look forward to urgent fixing of the existing refineries, passage of the PIB, reorganization and repositioning of the NNPC, reinvention of the downstream infrastructures of fuel production and distribution, an end to crude oil theft and mass decent jobs, not worn-out outcry of removal of so-called fuel subsidy.
Nobody should be more presidential than the elected president. The new administration should reject one-cap-fits-all policy dictate. No substitute to good governance and employment generation. The new ministers will be judged based on new thinking they brought to governnace in line with the electoral promises to promote the welfare and security of Nigerians, not emergency policy measures which they did not promise the electorate.
Issa Aremu
