Politicians responsible for Nigeria’s woes -Utomi
By Henry Uche
Professor Pat Utomi in a monitored interview with Channels TV, spoke on the current economic turmoil, and accused the Nigerian political class of being collectively responsible for the current misery in the country. He also spoke on other topical national issues.
Price of petrol is one of the painful things that any Nigerian can feel today. Would you say you saw this coming?
This thing is more complex than seeing or not seeing it coming. Clearly when you get into the kind of situation that we have got into, you need a lot of planning to engage and because we didn’t do all the necessary planning and put the appropriate measures in place, because we didn’t clearly clarify our strategy, we are running into very, very serious problems. See, first and foremost, I think that the typecasting of what the subsidy has put us in a bind, I probably would have begun by trying to clear up the mess in the industry, in NNPCL. Believe me, NNPCL is one of the most opaque and most unreliable organizations in the world. Quote me any day. I have been writing and talking about this for a whole generation, and I still remember my 1998 book, and a quote on NNPCL; from it, what we call subsidy, a good part of it was obviously graphed, what we call smuggling. I mean if you look at the way the numbers oscillate, how much we consume. Look at what we consume just before Covid, and then when the movement dropped under Covid, the numbers just multiplied significantly. You will tell anybody who is serious that it is not because more petrol was consumed. There are statistics compared with Pakistan, California, I have done that before in Nigeria. California, where almost everybody has a car in terms of ratio of citizen to petrol consumed, and Nigeria, where few people have cars, forget about how many cars are jammed in the streets of Lagos, but very few of our population have cars. And look at the number of units of petrol that we see are consumed there. So, we want to be influenced by…. before we punish citizens and pass on inefficiencies to them in prices, clear out the corruption in the system; that alone, I think, will bring the thing down dramatically. Then you have to make a choice about strategic use of resource. Look, on its own, subsidy is not a good idea, but there are times when to drive production, to keep quality of life at certain levels, you make a commitment to some levels of subsidy. We know that agriculture is massively subsidized in the United States and in Europe, but this is a subsidy that drives production and puts more money in the hands of some people who produce, and therefore enables the system to keep running. But when you massively subsidize consumption for pleasure and stuff like that, where people don’t have to give thought to how they use the resource, then you’re not doing what is best for the system. This is where we are stuck, because we didn’t deal with the heart of the matter first.
What were we supposed to have done at first?
The first thing is, you clean up an NNPCL, and you would have reduced the so called subsidy, in my view, by more than 60 percent and the corruption in NNPCL.
Is it late to do that? If you were given that job to do, what would you do?
If I’m given the job, I can do it. I have been saying it for years. Look, then the next thing by the way, you know, if you go to the World Bank and the IMF, they will throw policies at you which are basic templates. No problem, that’s a good understanding of economics. However, every situation is different. Now, let’s go back to Malaysia during the Asian financial crisis in 1997, look, one of the things I’m hearing now that is going on in Nigeria, oh, they are telling me in Washington that the tax to GDP ratio is terrible, so they need to increase tax dramatically. Somebody was telling me here in Washington that they are planning a massive increase of tax because the tax to GDP ratio is so low. And I said these people who tell you these things, do they understand your economy? The average person in the Western world who pays those taxes, very important that he pays, has no other commitment beside themselves. The average Nigerian middle class person is the social safety net that the country does not have. He pays fees for X number of people, his entire extended family depends on him. That is taxation. If your book doesn’t call it taxes, then the person doesn’t understand his economics. So, how do you program those and keep them into account in computing, how you change tax rates and all of that? These are the kinds of conversations that you need to put on the table. And so I’m saying that if you just take numbers they throw at you from NNPCL and say, okay, therefore jack up prices by so much, you will just be burdening the people who are overburdened. And you know what you need when investments are not taking place, is to free up money for investment, for savings, for investment, savings, they can’t save. If they can’t save, they can’t invest. They are just in a vicious circle going downwards. So, I think that we do need serious reflection on where we are in the process and what we must do first. There’s a sequencing problem. And we’re not managing that properly. That’s why it is so hard on people. I mean, we really need to sit down and seriously engage on the matter. Security is a very important part of it, but all the stories about how much petrol goes out of Nigeria’s borders are too many. Look, the simple technology thing, you will see every car that leaves Nigeria’s borders, not above petrol tankers. So when they tell you that this is how much that is consumed in Nigeria, this is how much is smuggled, the major security issue, is their complicity? Perhaps there is, if we want to deal with that, we deal with that, if we then deal with security issues and deal with the corruption issues at the NNPC, we would then say to consumers, look, this thing is about our output, and our output does not justify our paying nothing for petrol. So perhaps, we are going to introduce these kinds of public transportation for all kinds of people. Quality public transportation. Look, in 1984, I visited Zimbabwe for the first time. I had a classmate in the US who was Executive Director of ZIPA, Zimbabwe Institute of Political Administration. He came back from the US, bought a nice house on Mount Pleasant, but he couldn’t buy a car, because that was a priority at that time. He bought in 1956 a Maurice Minor, and during the day, the weekdays, he will take a bus to work. On Sunday, he will bring out his Maurice Minor and drive his family to church. Look we got to say to ourselves, if we have this quality of public transportation, fuelling it at this kind of level, subsidizing that kind of fuelling, if you want for partying sake, then you pay a different kind of price for petrol. But let’s not punish ourselves and shut out productivity possibilities out of the resources that need to go to specific areas going there. That’s what we seem to be doing, and it doesn’t work, right? We need to talk and sort out these problems once and for all.
Prices have jumped to 300 percent, can’t government rescind its decision, are we between a hard place and the rock or between the sea and the devil? Where exactly are we right now?
We are in between all of those, and we made some very terrible mistakes, and we have got to try and work our way back. But how do we work our way back when public officials are seen….. we got to show dramatically that the public sector, the leadership, have done a mea culpa on their fragrant abuse of the public treasury. The people will say, okay, this people have shared all these load. Again, I keep giving the example of President Obasanjo coming down to Peugeot 504 saying, look, oil prices have dropped, that was 1976 or there about. We cut our coat according to our cloth. So everybody, the Head of state inclusive, is going on Peugeot 504, everybody else is going on something lower. But in this era, I’m not seeing people accepting government, saying to them, look, things are tough. Sorry, you have to pay this. But public officials are living in homes that are powered by generators that the diesel is paid for by the public, and there is power 24/7 and they are flying in new jets, no! We have to come together as a society and say our country has done things wrong with policy and we have to rebuild. And this is how we rebuild. This is how everybody sacrifices. You go out there, get 1000 brand new buses of different quality, put them out there, pack your car. Look, I have seen Nigeria go through phases. When I was growing up, there was a time when Lagos was so congested that you were not allowed to drive into Lagos Island, so you parked your car at Orile or something, got into this small buses and enter Island. Big Man, big man. These are the kinds of things we need to collectively start shedding, beginning from the top. First must be the top! Shed all that load, no more motorcade, no more this. If not, the people can’t take you seriously. And we know that the country is collectively trying to solve problems- the mistakes that we made, to make things work. Look, Nigerian political class collectively is responsible for the Nigerian misery. The country’s political class has failed the country. I mean, look at the choices we have repeatedly made, look at the kind of National Assembly we have, look at the kinds of behavior of the Executive branch, the political class needs to come out publicly and do a mea culpa before the country. Look at Southeast Asia, people will come out and do a humiliation bow for what the public has suffered as a result of irresponsibility of the political class. That’s a starting point. The people feel disconnected from the political class. That is a major solution- if the political class starts feeling what the people are feeling, we are starting to solve the problem.
If you were President Bola Tinubu, to salvage the situation, what would you do right now?
The first thing to do is recognize essential things that Nigerians need fuel for. I will subsidize, whatever it is, we choose to call it those things. I don’t care what you call it, there is subsidy, there will be subsidy. I just told you that the Americans have subsidy for agriculture. It’s a matter of where you direct it to. Is it something that will produce that will help us rebuild. If it is something that will help us produce and rebuild, I will subsidize, but if it is something that will let us frivolously consume, I will not do that. And I will show example. There was a Latin American president that used to run around in a Volkswagen Beetle. I mean, that was a showing of commitment. So, let our politicians not think that, oh, befitting, befitting what? Public resources are something the people have in short supply and therefore managed extremely tightly by the political class economy.
If you reintroduce subsidy, will you wind back the hand of inflation? Will you reduce the prices of commodity that is skyrocketing?
There are things you will be able to do, all kinds of things to reduce price pressures, produce food. Once you produce plenty of food, the price pressures will come down, but we are not doing enough to stimulate food production. In January, I gave this advice. I said, look, legumes take three months if we are serious, we want to prevent this inflation from taking off. Let us cut off certain areas in the country. Put soldiers permanently there and get farmers to go in with incentives. Within three months, there will be plenty of food all over the place. Prices will drop. Did anybody do that? Look, we need seriousness, not just talking, talking, talking, that is what the problem is.
