By Sunday Ani
Candidate of the Social Democratic Party (SDP) in the 2023 presidential election, Prince Adewole Adebayo, has slammed the All Progressives Congress (APC) government led by President Bola Tinubu for inflicting so much pains and hardship on Nigerians, insisting that going to the Eagle’s Square to hold the Bible or Quran and saying a few words, saluting the police and then disappearing into the shadows, don’t make a government.
In this interview, he spoke about the attendant negative effects of petrol subsidy removal and floating of the Naira, the current hardship in the country, the politics of oil refineries in Nigeria and what he would have done differently if he had won the presidential election, among others
Nigerians are currently going through hard times as a result of the poor economy; are people like you also affected by the harsh economy?
As leaders, whatever our people are going through, we are also going through it. The pain began to affect me even before the election because I already saw what was coming. So, it’s a case of a doctor who can see that the patient has cancer even though the patient is not aware.
So, are you saying that you saw this coming?
Not only did I see it coming, I also said that it was coming and I said it everywhere. Nigeria has only one problem. All the problems they are telling you about Nigeria are just symptoms of one problem and that is bad governance. Like Mrs Oluremi Tinubu said, her husband is not the cause of the problem; he is only the symptom of the problem.
How do you mean?
A politics that could sum up all the challenges Nigeria is facing, sum up 16 years of PDP, eight years of Muhammadu Buhari, and conclude that Bola Tinubu should be president, has a mindset problem. When you sum up the problems of the country, the journey taken so far, the challenges of the moment, you will choose leadership that meets the challenges of the moment. It is possible for anyone to be president, and anyone can be captain of the ship. It is a question of time. Thirty years ago, Tinubu could have been president, but not now. We should try as much as possible to choose our leadership to meet the challenges of the time.
Why not now for the Tinubu presidency?
To start with, there is no clear philosophy. I don’t want to make a play on words, but Emi lokan (it is my turn) is not a philosophy.
How about the Renewed Hope Agenda?
What kind of a Renewed Hope Agenda starts with the removal of roof over your head, removal of food from your mouth and removal of support for industry and maintaining normal living; when the method chosen is the most damaging of all the options? If I have a cold and there are five doctors and one says go and have a rest, the second one says take warm liquid and the other one says he wants to do brain surgery for me, the one that wants to do brain surgery is not qualified to be a doctor because the solution he wants to give me is worse than the problem I have. That is what I see in this scenario. Everything that brought us to where we are today is because of three major problems. One is Buhari because of his economic illiteracy and lack of awareness. Remember his mantra of ‘I am not aware,’ ‘I am not aware.’ He was not able to govern physically, so his government was always doing ways and means and always borrowing and borrowing. Secondly, they wouldn’t govern any proper administration, so the subsidy they said they were going to remove ballooned out of proportion and out of their hands. Thirdly, they couldn’t grow the Gross Domestic Products (GDP) effectively. These are simple problems you have from time to time. But look at the solutions Tinubu, Atiku, and even Peter Obi brought forward; a solution that does not make any economic sense. The solution was that they were going to remove subsidy from a product that is transcendental product. Nobody buys petrol to drink like wine. You buy petrol to do an activity, to travel or to work; it is a productive use of energy which cuts across every field. We had the supply side of our foreign exchange, nothing more than that. Our foreign exchange hasn’t grown in 30 years. So, if you have the supply side, saying that you are going to float it, where is the supply going to come from? The assumption is that some external support will bring in foreign direct investments. But if you want to have a good home, having a nice bed sheet is one of them. But having nice bed sheets won’t guarantee a good home because if the roof is leaking, that bed sheets will no longer be nice over time. One of the tools you need for having foreign direct investment is a stable or predictable foreign exchange. But even that is not enough. You need to have respect for contracts. You need to have a rule of law. You need to have security. You need to have a good justice system. You need to have lower cost of factors so that if I am bringing my industry and I am producing like Aliko Dangote who is selling fuel, how is he going to sell fuel to somebody who is in Sokoto? Are you telling me that in this 2024, anybody will conceive that you will be trucking fuel from Lekki, Lagos to Maiduguri? Then you will be trucking it to Calabar and other places. It does not make any sense. These are some of the problems we had which they came to worsen. That is the problem they have now which is why I feel bad that a very simple economic situation that needs a few measures of government discipline, they didn’t take any of them; they expanded the government beyond. Even in the prioritisation of government’s expenditure, they are spending money on the least productive of items and then they yank off support from the economy. They created inflation and then turned the Central Bank of Nigeria (CBN) governor to Paul Folca, and now, he had to “Folcarise” the economy, raising interest rates.
Was that not in a bid to lower inflation?
Yes, but you caused the inflation. That’s the problem Paul Folca had when he was appointed by President Jimmy Carter as chairman of Federal Reserves. Carter had inherited from both Nixon and Ford a high inflation. He thought the only way he could kill high inflation was to raise interest rates, because cheap credit was driving the inflation. But our inflation in Nigeria is not driven by cheap credit. In fact, there is no sufficient banking penetration, and the lending capacity of our banks is so small that even regional and community that are high advised overseas to have more money than the largest bank in Nigeria. The tension of raising interest rates is that you will suffer one certain problem; you will shrink the economy by having a recession to slow down prices. But in Nigeria, it will spiral out of control because productivity will go so low.
It appears the continuous increase in rate by the CBN is working. Look at the progress in the inflation rate, it’s slightly going down and the GDP slightly improves, too. Are you not seeing that?
You need to look at the differential in inflation rate and the statistics. You will have to look at the component that drives the inflation, which still continues to drive inflation. Also look at the base increase. How many base points did you increase the rate versus how many points did you drop in the inflation? Secondly, you look at the GDP, which is rising essentially as a result of the nominal increases in the price of factors. If your GDP is rising, it should reflect in your employment. It is not reflected in employment. I think the conclusion is that they have taken the wrong measures.
Are you by the above analysis saying that the GDP growth rate is not trickling down?
Yes, it is not. There are two obvious things to the problems. Your GDP in the absolute, doesn’t take the difference in the marginal in your GDP, you must adjust against the marginal increase in your population because if the rate of growth of population is higher than the GDP, you will have negative GDP. If you look at the illusion of money, you must calculate your GDP relative to stability. We don’t have sufficient goods reserve with which we can measure it. We probably use the US dollar to measure it. We also need to understand that the US dollar is under some unusual inflationary pressures. So, when you adjust against a nominal increase and against the foreign exchange differential; when you adjust against the official dollar inflationary rate, you now juxtapose that one against the population growth. That is why nobody is smiling at you. If they say one is exaggerating what is going on in the streets, well, how well can they fund their programmes and budget? They need to fundamentally rejig the economy because they have made serious mistakes.
The president doesn’t think so because he has consistently maintained that there would be no reversal to the majority of his programmes; what is your take?
He can say no reversal for two reasons. You know there was a time in this country when Chief Olu Falae, then Secretary to the Government of the Federation in 1986, said there was no alternative to SAP. So, if you limit your thinking and vision about the economy, you will come and say there is no alternative. There is always an alternative. That is what economics is all about.
Talking about alternatives, the three major candidates of the APC, PDP and LP during the 2023 electioneering, all promised they would remove subsidy and float the currency. You didn’t go that route in your campaign, instead you presented other alternatives. How do you think your alternatives would have had positive impacts on the economy if you had won the election?
The first thing to do in an economy is to realise that there is a lot of wealth trapped in the talent and energy of the people such that the first thing you need to do is to target the reduction of unemployment. The reason monetary economics is allowed is because the fundamental objective of monetary economics is to achieve good employment, not only of labour but also on all factors of production so that you have allocative efficiencies that clearly want to make you want to invest your money in the economy and get people employed. There are five areas you can look into. Agriculture is number one because it employs the highest number of people. It is also a low hanging fruit because it is easy to start. Anybody with a tractor and bucket can get started. It is scalable, so you cannot go into producing raw materials and other things that are additives. It will also make sure you govern your territory such that you are now in full control of your land, where a large portion of it are being shared with bandits since some of them are not in the control by the government. With agriculture, you will create employment and solve the problems of food as well. If you look at the incidence of food prices in the entire aggregation of inflation, it will come down. Also, you have to invest in infrastructure. Investing in infrastructure means that you don’t allow people to do for themselves as individuals, things that we can all do collectively. That means you want to make sure that people travelling from one end of the country to the other don’t have to travel in their own vehicles because you have a public transport. You need to give people good health. You need to build rural health facilities as this will employ people and even keep people healthy and more productive. You need to make social investment in education. Many of the cases of unemployment which we are dealing with in our time will be rapidly dealt with, recruiting teachers. But the problems of the governors even with all the money they are making now is that they don’t want to employ people because when they employ, there is less discretionary spending. This is because if you employ, you must pay as you are bound by contract. Some states, rather than increase compensation for their staff, tell their staff to come to work twice a week.
If you had won, you would not have removed subsidy on petrol and you would also not have floated the currency. What would you have done differently?
Look at the costing. I am taking their numbers so that they won’t say I’m second-guessing. When the noise first came out, it was under former President Goodluck Jonathan. At that time, it was travelling towards N1 trillion. At a time, it was over N1 trillion. When President Buhari came, it travelled all the way to N4 trillion in the budget but there was some transparency in the lies such that you had to budget it in the books; it was there in the books. When we were campaigning, some were saying that if we were not careful, it would come to about N8 trillion. For me, if we audit our consumption, definitely we don’t consume up to N2 trillion at the old price. Secondly, if we get our refineries to work, it will be less. And Nigerians need to know the reason our refineries are not working.
Can you explain further?
Let me give you a simple explanation. When you are trying to repair an existing refinery, and you have not finished repairing it and somebody gets an architect to draw a map of a refinery, you went to negotiate lands in many places, got lands, started construction, finished constructing and now selling, you haven’t finished repairing the one already in existence. What does that tell you? It tells you that the priority is to make sure that those things don’t work.
What do you think is the problem? Is it interest within the government that doesn’t want the refineries to work or interest within the Nigeria National Petroleum Company Limited (NNPCL)?
The NNPCL is part of the government, and nobody gets appointed without the government’s approval. The idea is that they don’t want to run the government. They don’t want to run the economy. They are fighting to take control of the petroleum market. They see you as a customer, not as citizens. They don’t want to be responsible for ensuring you have a good life of training your children, you can go to work with seven per cent of your salary to pay for transportation.
How did the government refuse to make the refineries work?
They need to create scarcity of work. These refineries were built years ago. The first one was part of our first development plan, the Port Harcourt Refinery, which was done during the Balewa era. Then, Gowon came and started building that of Warri. By that time, Obasanjo had taken over, and built Kaduna. The idea was that we would be building more because we are energy rich country, and we were not supposed to be worried about the small quantity being consumed in Nigeria. If we are productive, we should be consuming one million barrels a day. We were supposed to be exporting so that even the little part we are consuming locally will not be the essence of government. How many refineries are in Singapore? Go to the refinery market, with $2 billion to $3 billion you will build a good refinery. People call bogus figures here because the government is involved and they try to siphon the money. The refinery is an old technology distillation. The refinery in the Gulf of Beirut has been there since 1900. The one in Pennsylvania was built in 1903, and they are still working. So, what is new about refinery? Talk to chemical engineers and ask them about the largest and most complex catalytic cracking unit. How much would it cost, even if they have to get it designed from the beginning? So, don’t let us pretend that we don’t know that we have been captured and our brothers and sisters in government who captured us want to squeeze us like oranges and squeeze the juice out of us, and probably, discard us when there is nothing more. They want to remove economic participation.
Perhaps you are right; that’s why they said recently that the rich may pay as much as 25 per cent on personal income tax…
I, Adewole Adebayo, government come and tax me. I am ready to pay 50 per cent of my income in taxes. I don’t mind, after all in Norway, it is higher than that. I am spending billion, literally, to power my productive enterprises. But you cannot pauperise us, take all the taxes and still not be responsible for anything. Anybody who tells you that we should remove subsidy from an underdeveloped economy where productivity is low had F9 in economics. In China, with $10,000, you can have a factory. All you need to do is to demonstrate to the city or the government there that you are producing this particular product. If they see the production plan, they will give you a factory on credit, and you start paying back. That is not available here in Nigeria. China is the largest producer of finished goods because of the subsidy. And you don’t have to be in China. If it’s the US, the first thing they welcome you with is a letter to come and borrow money. Sometimes, the Federal Reserve gives money to banks at negative interest to force them to lend money to people. During COVID-19, I was here in Nigeria. When I went to the US, I got stack of letters, awarding me money, wanting to give money to my law firm. They are subsidizing with credit. If you go to Europe, they are subsidizing with social services. You the employer of labour, when your worker is sick, you are not the one to pay because every worker, every citizen has life insurance and other social services, so it is cheaper to hire labour there. Come back to my beloved Nigeria. What is the incentive for productivity? Nothing, so you cannot compete. And the little that people are enjoying because we are petroleum rich country, we should now have low energy cost. That is what will drive you to say, let me go to Nigeria to take advantage of the low energy cost for my production.
How about offering a tax holiday?
Tax holiday is one of the ways through which they steal our money. Somebody will do 100 kilometres of poorly done cement road, very narrow and not standardised, and they will give the person billions of Naira for the same road that can be done by local government. Just collect your taxes.
Are you saying that it is the mindset of the people emerging as leaders that determines the level of productivity in government and governance?
These people don’t want to emerge as leaders. They want to take control of the tap of money. They don’t want to lead you because if you are leading, you look back sometimes to see whether your people are following you. This is a case of doing to you what the colonial master was planning to do when Jaja of Opobo, Nana of Itshekiri, Ovonranmwen Nogbaisi and everybody was fighting that the whiteman that he cannot come to our place and exploit us. That is why you have the statue of Madam Tinubu in Lagos. Now, you are not being exploited by these people, you are now being exploited by your own people who are exporting your own money overseas because they want their names to appear as one of the richest persons in town. We need to stop that because we are growing a large population that needs to be productive, and that needs to express their talents. We need to form a government that gives support services. The essence of government is to back you up.
I hope there won’t be a tipping point to all these, what do you think?
I don’t want us to reach a tipping point because the tipping point is a mirage. You would think people will never accept N500 per litre of fuel. They accepted over N1000 and they are going towards N2000 without anybody stopping them. We need to govern. That is the summary. Any government that cannot help you to find your missing cat or dog after a while won’t be able to find a missing child. After a while, they won’t be able to find a missing town and after a while, a community will go. Going to the Eagle’s Square to hold the Bible or Quran and say a few words, salute the police and then disappear into the shadows, doesn’t make you a government. The people must feel your presence if truly you are governing.