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THE SOLUTION TREATISE AND THE FEC REBUTTAL

FORMER CENTRAL BANK GOVERNOR, PROFESSOR CHARLES SOLUDO.
FORMER CENTRAL BANK GOVERNOR, PROFESSOR CHARLES SOLUDO.


It seemed like a departure from past patterns that the briefing by the Federal Executive Council (FEC) last Wednesday was largely devoted to a rebuttal of an essay written by former Central Bank of Nigeria Governor and former Gubernatorial candidate in Anambra state, Chukwuma C. Soludo, formerly Charles Soludo. Reporting the position of the FEC, Labaran Maku, Minister of State for Information practically poo-poohed Soludo’s commentary ("2011 Elections: Let The Real Debate Begin, ThisDay, September 15, 2010, p.6"), arguing that the problems (more like the mess) that Soludo has seen in the Nigerian economy, and for which reason he is asking for changes were actually caused by him during his tenure as CBN Governor and that the present administration has been doing its best to resolve the problems and clean up the mess.

This argumentum ad hominem is most unfortunate. The FEC must look beyond the person, or motives, and attempt a rigorous point by point response to the serious issues raised by the former CBN Governor; to abuse and dismiss him leaves his concerns unaddressed and raises questions about the integrity of the FEC. Dismissing every critic of the present Nigerian system, and trying to label them unfairly as has been done with John Campbell (Nigeria on the Brink: What happens if the 2011 Elections Fail? Foreign Affairs, September 9, 2010), and now Soludo, without an attempt to respond to the issues raised obviously negates statecraft.

Soludo raises several issues which at the risk of oversimplification relate to the prudent management of the economy to ensure prosperity among the population now and in the future. The urgency of the need to prepare the country for future demographic and economic challenges which are inescapable given population growth rates, although the design of an economic blueprint remains elusive. The failure of the past and present administration to consolidate on the positives from the Obasanjo administration – signposted by fiscal discipline and a focus on recalibrating the economy to not only cope with the changing global economic dynamics but to use the challenges to justify a focus on infrastructural development issue; rather than the wanton profligacy and lack of clear thinking about economic directions that attends election year political economics.

Beyond this, he outlines a number of issues which he thinks should form the focus of the present election campaigns, issues that should engage the Presidential office-seekers instead of the platitudes they seem pre-occupied with. In other words, articulating why Nigeria should have an issues-driven electoral process that is structured along the lines of the US presidential system we have adopted (with emphasis on rigorous debate to energise and enlighten the electorate) and a focus on matters of national well-being and prosperity. Thus, Soludo’s intervention is a critique of the prevailing economic and political order.

He argues that Nigeria’s future is currently being taken for granted, with the economy effectively pushed into a ‘loser’s trap’ without any alternative vision of redirection. He pointed out that under the Obasanjo administration, with oil prices around $25 - $50 during the second term, the economy grew from 2.8% (the 1990s average), to 6 -7%, the current benchmark of growth under this economic management plan. The Obasanjo administration he says, paid off $12 billion Paris Club debts, and still managed to leave a healthy sum of $22 billion as excess crude account savings. Since 2007, the excess crude account has been depleted, massive borrowings leading to about N4.3 trillion debts (according to the DMO which indicated that local debts account for about N3triilion of this figure) have been contracted without any quality investment in the key growth and productivity enhancing areas of the economy.

Instead recurrent expenditure of the public sector has "more than doubled" despite the reality of an oil boom that has created additional revenue above budget with oil prices averaging $70 - $85 per barrel during the period under reference. Soludo’s argument is that this profligacy and disregard for economic fundamentals cannot guarantee Nigeria’s future, and can only bring misery, in the event of a crash in the spot price of crude oil, which regrettably remains the mainstay of the economy, which we have never taken any direct effort at restructuring. At a time when the global stock markets are attaining a 4-month high, our stock market is breaching its 6-months low, lending credence to the comatose tag placed on the market by Soludo in his contribution.

Soludo argues that Nigeria can be made more productive, national growth rates can be doubled and capacity utilization enhanced. It beggars belief to think that the best response that the FEC can come up with is that Soludo caused the problems in the banking sector and that is what the Jonathan administration is trying to deal with. Soludo’s commentary is not on the banking sector, and the thinking that the banking sector represents the entire economy is in fact part of the problem that has led to the crisis that Soludo identifies. The Soludo treatise needs not warrant a rebuttal in the first place. For what purpose would it have served if the comments were made by someone like Obasanjo, Sanusi Lamido or just about any professional analyst or economist – local or foreign?

The World Bank had said as much just as any ‘common sense’ commentator on the economy could have done. Would it not be in the public interest to ask for what happened to the $22 billion saved under Obasanjo? Why has the economic growth rate stagnated at 6-7%? Why is there a doubling of recurrent expenditure? Is there a justification for massive borrowing beyond the challenge of a global meltdown and even at that has this gone into funding infrastructural development and creating jobs for the growing unemployed? Is Soludo out of line to predict the apocalypse of an oil price crash, something that has been done by so many leading experts in both the finance and oil sectors? OPEC itself predicts a difficult first half of 2011 according to Kippreport.com and if that were to happen, is the government working on any "contingency plan" to prepare for that rainy day? Superior arguments, and hard facts, and clear demonstration of the government’s innocence are what we expect to be advanced by officials speaking on behalf of government, that is what will persuade intelligent people, not the emotional riposte that "he caused the problems".

The second plank of Soludo’s intervention is his concern about the lack of serious discussions about the future of Nigeria, no articulation of programmes and vision by those who want to lead Nigeria as we step into the beginning of another 50 years. And he proceeds to outline the programmes and issues to which the candidates should advert their minds as campaign manifesto copies to persuade the people that they understand the enormity of the task to which they seek to assign themselves. These are: the reconstruction of public finance to place it on the path of sustainability with a plan and definitive date in which the presidential aspirant believes we can achieve a balanced budget. Other considerations will include the aspiration to achieve a reduced recurrent expenditure and increased capital expenditure on key infrastructural engagements, encouragement of private sector investments; and a reconstruction of the country’s political structure to ensure productivity at state and local levels rather than an overdependence on federal allocations.

Where does each candidate stand in relation to these, or are we to assume that such call for accountability of planned stewardship no longer matters? And in relation to a number of additional issues such as states creation, effective policing and general sovereign security leading to the question of state or regional police, uninterrupted power supply, a credible population census, population policy, the integrity of elections, the unresolved Niger Delta development, environmental sustainability, the education system, capital flight, women, youths and the physically challenged, poverty, urbanization, unemployment, housing policy, the ports system, tax collection, excise and customs, economic partnership and foreign policy – is it not fit and proper to know where each candidate stands?.

These are relevant issues, and to say that they should be addressed by anyone who wants to rule Nigeria cannot and should not be considered offensive. The Federal Executive Council in its response to Soludo has chosen to ignore again all of these salient points, focusing on the messenger rather than the message. People like Soludo who have enjoyed their "turn to eat", and now turn around to criticise the system are bound to be criticized by those whose "turn it is to eat." Soludo has therefore not been given the benefit of his credentials as an economist and scholar, it is the price his likes have to pay for running with the hare and hunting with hound. Ordinarily a man in his position, a member of the ruling PDP and given his antecedents should have access to the relevant authorities, and should have been in a position to push his views within the family.

By going public with his views, is Soludo acting out of desperation and frustration? It is deja vu all over again for what has played out now represents a price for breaching a sacred rule, though unwritten, but one that has guided the office of the central bank governor since the ages – a CBN governor is expected to be apolitical – before attaining office, while in office and when out of office. Soludo did not abide by this creed and will have to accept the reactions that attend his future actions. Nevertheless, his message is relevant and worthy of the debate that he says he wants to generate. If nothing, but for the fact that he has at his disposal solid facts that might have compelled him to realize, out of office, the enormous responsibility he carries as the former governor who knows where all the dead bodies are buried.

His concerns about the state of the economy are corroborated by accessible facts even if the FEC is unwilling to do the necessary homework to confirm this. The situation is much worse than Soludo describes - the 6-7% growth rate that he ascribes to the Obasanjo administration itself appears fictitious, just as it is untrue that the economy is currently growing at 6-7%. This is the false claim that the Bureau of Statistics and the Federal Government are trying to turn into absolute truths. Soludo expects that by now, the economy should have been growing at about 14 -17%; on that score, he is being mischievous, not even China, the fastest growing economy in the world (at 10% annual growth rate consistently in the last decade) is growing that fast. And for all his positive outlook on the Obasanjo era, there can be no doubt that the current distortions are rooted in that period, particularly with the derailment of the political system by Soludo’s principal through manoeuvres that have proven not to be in the public interest, with economic consequences, none the least the largely unregulated financial market created – that was only an accident waiting to happen. All his arguments however, about discipline, prudence and rigour are unexceptionable.

What problem does the FEC have with the idea of the 2011 campaign process being issue-driven? Indeed, the campaign process so far has placed so much emphasis on experience, on zoning, power rotation, and the force of incumbency. That is not what Nigerians want, at least in the absolute sense of it. Part of the process of change must include the transformation of the landscape into an issues-led environment where any aspirant for the national and state office is able to articulate, analyse and lay out in simple terms what the future holds. It is about time we stopped being driven by today’s headlines and focus more on tomorrow’s trends in dealing with the issues that define us as a nation. This process will ensure that candidates are accountable to the electorate. In whose name would the next president govern; if there are no issues advanced during this short and unusual campaign period, it would be a victory in political expediency and not in electoral mandate – for the mandate is tied to specific promises on matters that affect the ordinary Nigerian. When is that engagement going to start? Nigerians have had the misfortune of having in political office persons who start thinking of what to do after winning power. In 2011, that will not be good enough.

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