Etubom Anthony Asuquo Ani, former Minister of Finance and Minister of Foreign Affairs during the General Sani Abacha administration is an elder statesman, quintessential chartered accountant and an astute public administrator. When he was appointed Minister of State, Foreign Affairs in November 1993 by the then Head of State, General Abacha, Ani made history as he was the first and only Christian to organize and lead a most successful Muslim pilgrimage to the Holy land in 1994.
In October 1994, he was made the Acting Minister of Finance in addition to holding the portfolio of Minister of State for Foreign Affairs. Between February 1995 and March 1995, he held both portfolios of Minister of Finance and Minister of Foreign Affairs. It was during this time that he led the Nigerian delegation to the World Summit for Social Development in Copenhagen, Denmark. Despite the image challenges of the government under which he served, Ani is respected as one of Nigeria’s two most outstanding Finance Ministers (the other being the revered Chief Obafemi Awolowo.)
As Minister of Finance, he instituted laudable policies which stabilised the raging inflation from 87% in 1995 at 8.5% in 1997. Throughout his tenure as Minister of Finance, the exchange rate parity was maintained at N82 to $1, the subsidy-free price of petroleum products was N11 per litre and there were no external or internal borrowings. All anti-investors laws (The Nigerian Enterprise Promotions Act, The Exchange Control Act and, The Capital Transfer Tax Act) were repealed and replaced with the Nigerian Investment Promotion Act, the Investments and Securities Act and the Finance Miscellaneous Foreign Exchange Act, the drafting of which he co-authored. It is noteworthy that these as well as several infrastructural projects across the country were achieved when the international price of crude oil was under $10 per barrel. Ani was a member of the Development Committee of the World Bank from 1995 to 1997 and Chairman of the Board of Governors of the African Development Bank (AfDB) from 1995 to 1996. He was also a one time member of the body of Tax Appeal Commissioners. He is equally one of the leading authorities on Nigerian Taxation Laws. In addition, he was the President of the Institute of Chartered Accountants of Nigeria (ICAN) from 1977 to 1988. Ani, who was conferred with the National Honours, Member of the Order of the Niger (MON) in 1977 and Officer of the Federal Republic (OFR) in 2012, is an authority in public finance.
In the ensuing interview with the editorial team of TheEconomy comprising Chris Ajaero, Dike Onwuamaeze, Pita Ochai and Michael Otogo, the elder statesman expresses strong views on the 2018 Budget, Nigeria’s rising debt profile and the concept of cattle colonies as a panacea to the recurring herdsmen/farmers face-off. Excerpts:
What is your assessment of Nigeria’s 2018 Appropriation Bill? Can it help to consolidate the gains of country’s economic recovery efforts?
Never in the history of this country have Nigerians seen and endured this kind of hardship as in the past year to the present date – No jobs, hunger, no money to the extent that parents have been compelled to withdraw their children from secondary schools and universities due to their inability to pay school fees. Nigerians have been reduced to fine beggars. It is quite common these days for Nigerians to beg via the mobile phone. In this latest form of begging adopted by Nigerians, each message you receive on phone is accompanied with bank details containing account number, name of account and his or her bank. Things are so bad. Indeed, many people have died because they could not even afford to pay for drugs on doctors’ prescription.
So, when the 2018 Appropriation Bill Budget is christened ‘Budget of Consolidation’, are we consolidating poverty and hunger? What I consider quite imperative at this point in time is that government must provide the people with a budget of hope because Nigeria, as it is today, is not a happy place to live in.
I can recall vividly that in May 2015, I had written to the authorities on the need for the real diversification of the economy into agriculture. If we are to effectively diversify the economy, government must spend oil money for this purpose. We cannot and should not expect the world to finance our agriculture. We must as a matter of urgency bring back our production and marketing boards for cocoa, palm produce, groundnut, cotton, coffee, rubber, beniseed and soya beans. We should create the Ministry of Food to coordinate the production, processing, storage, marketing and distribution of all the nation’s agricultural products and ensure they are sold at affordable prices.
I also wrote to the authorities stressing the need for government to do its best to increase power generation and distribution and bring back industries that had relocated from Nigeria to Ghana. Some of them include Dunlop and Mitchelin. In addition, I called for the resuscitation of the dead industries in Ikeja, Port Harcourt and Kaduna. The resuscitation of these industries will have ripple effects on the economy.
With particular reference to the power sector, it is unfortunate that we have spent over $15 billion for a stable and consistent power supply in the country but without success. Government should now give us a deadline when we will have constant power supply. I must say that everything in Nigeria depends on power supply and we would be very surprised at how much will be unleashed into the economy and jobs created if we could have constant power supply. These were my suggestions for job creation and the revival of the economy in May 2015 and they are still relevant today. Nigerians need their spirits to be lifted with jobs and life more abundant. They are resilient and patient but we should not take them for granted that they will always remain obedient and subservient in the face of hardship.
In specific terms, how would you appraise the 2018 budget?
I always like to review budgets starting with the composition of revenue. This is because in November 1994 while I was the Acting Minister of Finance, I discovered that all the budgets from 1986 up to 1994 were totally wrong. During these years, we were double counting the royalties and Petroleum Profits Tax (PPT) in respect of Nigeria’s equity crude and this inflated the nation’s revenue calculation by 30% in each of the years. This meant that 30% of the budgeted expenditure was not backed by any income, we kept on spending non-existent money and this led to the recession of 1995.
Reviewing the revenue profile of the 2018 Budget is very necessary in view of fundamental change of the basis of accounting in the Joint Venture (JV) cash call arrangement by substituting a new funding mechanism in allowing for Cost Recovery. There is also the new policy of Restructuring (Privatisation) of government equity in JV oil assets ( i.e reduction in equity holding with proceeds to be invested in other assets.
The Nigerian Budget must be prepared in accordance with the provisions of Section 81 of the Nigerian Constitution which refers to the preparation of the Consolidated Revenue Fund (CRF) and Section 162 (which relates to the preparation of “the Federation Account”). Section 162 of the 1999 Constitution as amended states inter alia: “The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the Armed Forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.
The President, upon the receipt of advice from the Revenue Mobilisation Allocation and Fiscal Commission, shall table before the National Assembly proposals for revenue allocation from the Federation Account, and in determining the formula, the National Assembly shall take into account, the allocation principles, especially those of population, equality of States, internal revenue generation, land mass, terrain as well as population density; Provided that the principle of derivation shall be constantly reflected in any approved formula as being not less than 13 per cent of the revenue accruing to the Federation Account directly from any natural resources.
Any amount standing to the credit of the Federation Account shall be distributed among the Federal and State Governments and the Local Government Councils in each State on such terms and in such manner as may be prescribed by the National Assembly.”
Then, Sir, what constitutes this Revenue?
Section 162 which I have just quoted, defines the Revenue and how it should be arrived at in respect of the Federal Government, states and local governments. It talks of revenue being any income or return accruing or derived by the Federal Government from any source, including any receipts, however, described arising from the operation of any law. Based on Section 162, it is obvious that the following may be recommended for the purpose of ascertaining the Revenue:
The Excess Crude Account (ECA), as presently constituted, is illegal as all oil revenue must be distributed in the ratio of 52.63%, 26.67% and 20.70% among the Federal, States and Local Governments without any deduction except perhaps the cost of production.
The National Assembly is not authorised to legislate on any benchmark (price and production) for States and Local Governments but may legislate for the Federal Government of Nigeria for the purpose of Section 82 of the Constitution after the Federal Government’s share of the Revenue has been transferred to the Consolidated Revenue Fund (CRF). This will affect the Oil Revenue of N2.448 trillion as projected in the 2018 Budget.
The only Internally Generated Revenue (IGR) of the Federal Government of Nigeria (FGN) is the proceeds from the Personal Income Tax of personnel of the Armed Forces, the Nigeria Police, the Ministry of Foreign Affairs and the residents of the Federal Capital Territory. All other receipts by the Federal Government of Nigeria from operation of any law must be saved in the Federation Account. The IGR of N847 billion will be affected.
The Earmarked Funds – Proceeds of oil assets ownership restructuring of N710 billion – may be a Federation Account receipt.
There seems to be a lot of emphasis on crude oil receipts. What of Liquefied Natural Gas (LNG)?
I must say that the N29.84 billion recorded as dividends from the Nigerian Liquefied Natural Gas (NLNG) in the 2018 budget is too paltry and is not worth the investment. At this time of hardship, the NLNG project should come to the rescue of the country. Nigeria is the world’s sixth biggest producer of LNG with a total production and exportation of 25 billion cubic meters of gas. Other producers of LNG are Qatar, Trinidad and Tobago, Malaysia, Australia, Russia, Indonesia, Algeria and Oman. Interestingly, LNG is the mainstay of their economies and their gas revenues form a substantial part of their national budgets. In 2017, we received only N30 billion from LNG as dividend and it is now becoming unacceptable. The LNG in Nigeria is very opaque and nobody knows what it is doing. It should by now be publishing its accounts so that Nigerians know what is happening. For instance, does it pay tax? If so, how much does it pay and what is its contribution to the Nigerian economy.
Management of the Excess Crude Account (ECA) has remained controversial, particularly the mode of sharing it among the various tiers of government. What would you suggest as the best way to handle this?
The Excess Crude Account (ECA) was started in1996 to curtail the velocity of money in circulation and help bring down the inflation, which at that time was in the region of 30% down from 87% in 1995. It was to help shore up our reserves which stood at less than $1billion in January 1995. By 8th June 1998 when General Abacha died, the ECA stood at $2.89 billion and nobody knows what happened to this amount.
The ECA was resuscitated in 2004 when Dr (Mrs) Ngozi Okonjo-Iweala came on board as Finance Minister and when there was oil boom under Obasanjo’s presidency. It was continued by the Umaru Musa Yar’Adua/ Goodluck Jonathan era from 2007 to 2011. Jonathan sustained it from 2011 to 2015 and President Buhari, who took over in 2015 has been going ahead with it till date.
It must be mentioned that the ECA, particularly from 2004 to date, is an illegal creation as it is not authorised in the 1999 Constitution. The illegality of the ECA notwithstanding, there is no account for the huge receipts made from 2004 to 2007 and from 2007 to 2011.
On 25th May 2015, Mrs Okonjo-Iweala, then Minister of Finance and Coordinating Minister of the Economy, published a detailed statement of inflow and outflow of foreign Excess Crude Account from 2011 to 20th May 2015. This statement showed an opening balance of $1.98 billion, an inflow $42.052 billion, an outflow of $42.064 billion and a closing balance of $2.075 billion. A further analysis of the inflow and outflow for the period showed that the Federal Government of Nigeria (FGN) overdrew its share of the ECA by $7.996 billion while the states and Local Governments were owed $7.984 billion by the Federal Government. A clearer picture of the Federal Government’s overdrawn position will be known if a similar detailed statement of inflow and outflow of foreign Excess Crude Account for the period 2004 to 2007 and from 2007 to 2015 and then from May 29, 2015 to date are prepared. It is only after this exercise that the true indebtedness of the Federal Government to the states and local governments in respect of the illegal ECA will be known.
How then could be the ECA become legal?
Sections 81 and 162 of the 1999 Constitution deal with Public Finance and it should be left to experts in the area to assist in implementing the intent of the Constitution. This is so since Nigeria is heavily dependent on oil and gas for its revenue. It is clear to me that in respect of the Federation Account as provided for in Section 162 of the Constitution, oil and gas receipts should be shown gross and the only deduction allowed is, perhaps, the joint venture contribution. The oil revenue will be shared among the Federal, states and local governments in the ratio approved by the National Assembly. The Federal Government’s share will be transferred to the Consolidated Revenue Fund in accordance with Sections 80/81 of the Constitution. It is at this stage that the National Assembly can make laws to provide for oil price benchmark that will be used to create Federal Government’s ECA which must remain in the Consolidated Revenue Fund as a reserve.
Each state on receipt of its share of the oil revenue has the right to determine its own oil price benchmark and create its own ECA. This will be done by the State House of Assembly.
Nigeria’s total public debt stock rose from N12.36 trillion in September 2015 to N20.37 trillion in September 2017. Are we walking into another debt trap after the exit from Paris and London Club clutches?
The total budgeted expenditure for 2018 is N8.612 trillion while the revenue is N6.607 trillion, including a non-recurring income of N909.9 billion being proceeds from JV privatisation and grants, leaving a deficit of N2.009 trillion. As at 30th September 2017, Nigeria’s debt stock was N 20.37 trillion. We have an application before the National Assembly to borrow additional $30 billion or N10 billion in 2019. If this is done, our debt stock will be in the region of N32 trillion. Based on our current recurring revenue profile of N5.697 trillion, the nation’s debt/recurring revenue gearing ratio will be 5.6:1. This is unsustainable and in future, Nigeria will be suffocated by debt overhang. An acceptable debt/revenue gearing ratio is 1:1 or at worst 2:1. A situation where the ratio is 5.6:1 is unacceptable. The debt service vote has increased from N1.604 trillion in 2017 to N2.014 in 2018. It is expected that as and when the interest and repayments on current borrowings are made, the debt service vote size will considerably increase.
Unless we diversify our economy to earn more recurring revenue, we shall incur serious debt overhang in 10 years’ time. We may go back (as we did in 2005) to beg for debt forgiveness and no one will listen to us. China to whom we turn to for all our loans will not even listen to us. To avoid debt overhang, our motto should be production, production and production. We must truly diversify our economy now.
How would you react to the recent statement by the Director-General of the Debt Management Office (DMO) that there is nothing to worry about the Federal Government’s plan to borrow externally because it would save N166 billion by so doing, since the interest rates are not high?
Well, I have not read that, but there is no where that you have got externalised debt that does not bring you trouble. We borrowed from Paris Club and you know we had to go to Paris Club to ask for debt forgiveness, and it took us a long time. The debts that the Director-General of DMO is talking about are those debts that arose as a result of budget deficit, but if you analyse the total debt burden of Nigeria, you will discover that most of those debts were borrowed to finance recurrent expenditures. We are not borrowing to finance capital expenditure, so for us to say that we are going to do any savings is not right. I know that the interest rate around the world is low but will it be low forever? We don’t know. With our debt-to-recurrent revenue gearing of 5.6 to 1, we may find out that within seven to 10 years, Nigeria may not be able to pay its debt, and it will be ominous if we will go back to the debt overhang of the past. I believe it is better for us if we owe internally and pay higher interest rate than for us to owe externally and then incur debt overhang. The IMF gave us a lot of conditionalities which are affecting us right now and those conditionalities are making us to be poor today. We had to accept IMF pills and devalued our currency. If you look at it globally, you will see that it is not safe for Nigeria to continue borrowing externally.
Do you think it is possible for Nigeria to stop borrowing by saving enough money in the Excess Crude Account?
I have already explained the purpose for which the ECA was created in 1996, which is to bring down inflation and increase the nation’s foreign reserve. From 1995 to 1998, Nigeria did not borrow internally or externally and we were able to cash back all our capital and recurrent expenditure. We were able to create an ECA as an unfettered foreign reserve. The position now is that the National Assembly promulgates a crude oil price benchmark which is less than the current price of crude oil. This is used to calculate the ECA and this reduces the budget revenue. We then calculate our recurrent and capital expenditure, the total of which is higher than the budget revenue and we arrive at budget deficit. We then borrow internally or externally to finance the deficit we have created. Meanwhile, during the budget year when we actualise the ECA, we spend the money without approval while borrowing to pay for the budget deficit. It is obvious that we should not create the ECA in times of deficit budgeting. Rather than borrowing internally or externally, money expected from the ECA should be used to balance the budget.
Privatisation of public assets is largely viewed as a good model for the country to drive its economic development but during the Abacha regime, you were vehemently opposed to the privatisation of joint venture assets. Why?
At the 1996 Spring Meeting of the World Bank, I held a meeting with Mr Michel Camdessus, the then Managing Director of the International Monetary Fund (IMF). After the usual rituals of suggesting that Nigeria should monetise, privatise, remove subsidies and downsize its workforce, he emphasised that we should privatise our joint venture assets and use the proceeds to finance other developments. I replied that Nigeria cannot monetise as Nigerians working in Abuja were itinerant workers and monetising their benefits by selling the houses being occupied by them will necessitate building new houses for new civil servants in future. This will be too expensive.
As for privatisation, I told him that we are yet to strengthen our institutions and provide the enabling laws while we had already removed petroleum and fertiliser subsidies. We could not downsize the workforce without providing alternative employment and as regards privatising our JV assets, the answer is “No” as Joint Venture Assets (oil and gas) were the mainstay of our economy.
But subsequent governments succumbed to external pressure. What is your take on this?
Yes, it appears to me that 22 years after the encounter with Camdessus, the Nigerian government has succumbed to the pressure of the IMF and its TINA (There is No Alternative) cheer leaders in the country to sell our JV Assets whose revenue is shared among the Federal, states and Local Governments of the federation. Most of the assets created by the Federal Government were paid for from the Federation Account (above the line) particularly during the military regime. Although, these assets were held by the Federal Government, they belong to the Federal, state and local governments in the ratio of their revenue sharing formula. Such assets which were paid above the line from the Federation Account include the Federal Capital Territory, Abuja, all refineries, Ajaokuta Steel, LNG Project (supervised by Shell), Nigerian Gas Company Project (supervised by Mobil), Itakpe Iron Ore, Aluminium Smelter, Itakpe/Warri, Railway Project, Joint Venture Cash Calls, to mention but a few. Gwarimpa Housing Estate was built from profit on foreign exchange transactions.
As Finance Minister, I paid for some of these projects from the Federation Account in the form of National Priority Projects. Some of these projects have been privatised and the proceeds wrongly retained by the Federal Government while it should go to the Federation Account.
I still hold the view that our Joint Venture Assets should not be privatised. If they should be, such must be rare and under strict conditions. We must know the projects for which the proceeds of sale will be applied and never again will consideration of sale be sourced from our local banks.
Could you tell us the conditions under which joint venture assets could be privatised?
I believe that we can only divest our joint venture assets to create a new economy that does not depend on oil. I will go all out for that because that is the way to move from one economy to another. The priority will be to sell our joint venture assets to diversify our economy into agriculture. That is the way to move from one economy to another economy and not to move from one asset to asset. I will rather prefer that we use the proceeds to build a brand new economy.
What is your view on the recent decision of the Nigerian Stock Exchange to commence trading on derivatives this year? Is Nigeria ready for this given the experience of the developed economies?
The Lagos Stock Exchange also known as the Nigerian Stock Exchange needs serious restructuring before it ventures into the area of derivatives. I can recall that in 1964, in the first auditors’ Domestic Report of the Stock Exchange, I wrote that the Exchange was not a market as the buyer, the seller and the owner of the commodity are one and the same person and therefore, the Exchange is subject to manipulations and corruption. I advised the Council of the Stock Exchange to separate the jobber from the broker and create a true market. The position that I found in 1964 still prevails till today.
Additionally, some years ago, the Council of the Stock Exchange took a decision that directors and major shareholders of companies quoted at the Stock Exchange must not sit in its Council. This was to avoid conflict of interest. This rule has been so flouted that a former Director-General of the Exchange was also the Chairman of the Board of a quoted company during her tenure of office at the Exchange. The corruption and manipulations at the Stock Exchange led to the collapse of the Nigerian economy in 2007. It should be noted that our economy collapsed in 2007 while the world economy gave way in 2008/2009. During our collapse, our stock market capitalisation was wiped out from N15.5 trillion to N5.5 trillion. While a few people captured the N10 trillion released by the reduction of market capitalisation, small holders who borrowed money to invest in the Stock Exchange could not meet their obligations to the banks. Many of these investors committed suicide.
I must caution that trading in derivatives is gambling and very speculative. The operators are magical. It is a classical case of the more you look, the less you see. It is based on serious and at times near impossible quantitative assumptions. This is why when derivatives are introduced into the Stock Exchange; hedge funds are also added so that people could hedge their bet. The Stock Exchange as presently constituted lacks the institutional framework to introduce derivatives and hedge funds in its operation. It must be a true market by separating the buyer from the seller and introduce checks and balances to avoid market manipulations.
Despite the huge sums of money injected into the turnaround maintenance of Nigeria’s four refineries, they are practically comatose. Any ideas on the way forward for this strategic industry?
They deliberately destroyed our refineries. When we were operating the Petroleum Trust Fund (PTF), I had to give Gen. Muhammadu Buhari who was then the Chairman of the PTF about N35 or N40 million for their projects every year. We kept the refineries going. We were producing 81 million litres of petroleum products per day. But during the administration of Obasanjo, he left them to rot and towards the end of his tenure as president, he decided to sell the refineries. As a matter of fact, he sold the four refineries at $750 million. It was late President Umaru Yar’Adua who reversed the sale. But by that time, the refineries were gone. We have said that in order to revamp the refineries, we should get the original manufacturers to come and refurbish them. I believe that the refineries are still alright. The Kaduna refinery only has problem on its cooling system. Apart from that, it is in perfect shape. The Port Harcourt refinery is alright. It can be revived. The Warri refinery is okay. It is new and can be revived. But the problem is that in the past few years, we have awarded contract for the turn-around maintenance of the refineries to people who do not know anything about TAM. The contract was awarded to politicians and not experts. Obviously, they will spoil it. If we were able to bring the manufacturers to do the TAM and authorise them to run the refineries for five to ten years, you will see that all the refineries will be working at full capacity. During my time, at any particular time there was going to be refinery maintenance, we would look for a refinery abroad that had excess capacity and send our crude to be refined. They will refine the crude and ship the fuel to us. In addition, they usually sent money as huge balance from what they realised through the selling of the by-products. However, by the time the Federal Government created the | Petroleum Products Pricing Regulatory Agency (PPRA), it became an avenue for encouraging the importation of fuel and enriching a few people through the payment of fuel subsidy claims. That was when they destroyed our refineries. If we take away the issue of conflict of interests, we will get our refineries working.
How best can the government address the problem of frequent fuel scarcity in Nigeria?
We ought not to have had fuel scarcity. Some people are very selfish. When we were there, we knew when the refineries would need turn-around maintenance and ensured they were done. And we had Dalhatu Bayero as the Managing Director of the Nigerian National Petroleum Corporation (NNPC). He was an honest man who loved this country and he ensured that the refineries were working at full capacity. It is a pity that we lost him. But he did a lot to help our country. He would look for a company abroad that had excess capacity to refine crude. Then we will send our crude oil to that company to refine and send not only the refined products but would send us additional money they realised from the sale of the by-products of crude oil. People are not honest now. We can do it and ensure that petroleum products are available at all times if those at the helm of affairs in NNPC and the Ministry of Petroleum Resources are honest and ensure that the refineries in the country are working at full capacity.
As a former Finance Minister, what do you consider as the major reasons the country is still struggling with its development template?
There are so many things that are wrong with the country. The wealth of Nigeria is concentrated in the hands of not more than 5,000 people. We had the privatisation through which public assets ware sold off to a few privileged Nigerians who subsequently controlled the assets after paying the then President money for his library. We then had the petroleum subsidy scam. This was done by the same people who benefited from the warped privatisation programme. So, it is still the same 5,000 people. We had the crash of the Stock Exchange in 2007.This was caused by the debacle at the Nigerian Breweries. You have heard about the Initial Public Offerings (IPOs). You have heard about the corruption in the Stock Exchange. You have heard about the President of the country staying in the Villa to control and manipulate the Stock Exchange. You have heard about the Director-General of the Securities and Exchange Commission (SEC) being the chairman of a quoted company. You have heard also of stock brokers being what they called market makers and buying the shares of the company which they are marketing which brought about the crash. The crash of the stock market was home-grown and not caused by external developments. It happened because we had a situation where the stock market had to crash and the capitalisation went down from N15 trillion to N5.5 trillion. The N10 trillion went into the hands of very few people. Many people died and some who borrowed money committed suicide but the money went to the same 5,000.
Moreover, about 3,000 operators of Bureau de Change received $66 billion from the Central Bank. The operators are part of the 5000 people holding the economy to ransom and creating scarcity, hunger and poverty for the rest of Nigerians. To worsen the ugly situation, the National Minimum Wage has remained a paltry N18, 000 per month since 2011. The poverty in the system keeps on increasing when the country’s currency is devalued especially since we import almost everything. So, it is a structural problem. When the wage is very stagnant, if you are not a man of integrity, you will steal. So, when you talk of corruption, you can also see what is behind it. So, we have a system where wages are stagnant while the currency is steadily devalued and this has been multiplying the poverty level. We are at the mercy of these 5,000 very rich Nigerians and unless we diversify the economy and empower the majority of Nigerians, we will be in trouble in the near future and I am afraid that if government does not take concrete steps to reduce the prevailing economic inequality and widespread poverty, we will not be able to effectively harness the potential of the country.
Although the administration of President Muhammadu Buhari believes that the Economic Recovery and Growth Plan (ERGP) would return the country to the path of sustainable growth, some experts contend that long term development planning is the way to go. Can Nigeria make progress without development planning?
No. Absolutely no. As a matter of fact, the so-called Vision 2010 was a national plan prepared by Ayo Ogunlade, former Minister of National Planning before it was hijacked by certain people who made a mess of it. We wanted to have a 15-year development plan. I provided funds for people to go to China, Brazil, and Argentina. But the exercise was hijacked by the Nigerian Economic Summit Group who came in to have their jamboree which meant nothing. I believe in planning in such a manner that any person elected President continues from where his predecessor stopped. By the time the plan is ended, you find that there will be tangible development in the system. Take for instance; we have been struggling to have stable power supply. If we had planned it properly, with all the money that has been thrown into it, we will be having regular power supply. We cannot go anywhere without steady power supply. So, there is need for a comprehensive development planning of about 18 years. We know that oil will not be bringing in much money in 10 years’ time. What plan do we have to deal with it? We have not done that.
Are you saying that the problem lies in lack of continuity in implementing the country’s development plan?
Yes. Let me give you an example. Lagos State has continuity and we are seeing the good impact. It is the only state in Nigeria that has continuity both in governance and development planning because one man is behind directing the process and it is working.
What is your take on the proposed establishment of cattle colonies as solution to the recurrent herdsmen/farmers’ divisive face-off in Nigeria?
I think we should take a holistic view of the whole thing. It is unfortunate that people have suffered needless deaths. There is a conflict of interest in the whole thing. I am told that there are 22 million herds of cattle in the country, and you find out that they are owned by the feudal lords in northern Nigeria, and there are not more than 500 of them who own these cattle. The ideal thing is for them to establish ranches in the North. But they don’t want to spend their money by establishing ranches; they want government to spend money and take care of their cattle. But you have to understand again that they are Nigerians.
However, the problem is that climate change has hit the north so much and Lake Chad has dried up. The desert has encroached considerably that there is no way that they can feed their cattle unless you want to pipe water from the Atlantic Ocean to the whole north, to Lake Chad and all these places. It will be too expensive.
Nevertheless, I can recall that during the colonial days, there were grazing routes for cattle and this was why there were no clashes between the herdsmen and farmers. Even in Lagos here, you had a grazing route called Cow Lane (agbo malu). It was situated in the place they call Razak Okoya Lane today. It used to be called cow lane. The cows grazed there. They did not deviate to any other place and their sariki used to be there, so we didn’t have problem. I believe if they can restore cattle routes, there will be no problem. The issue of cattle colony is an insult on the people. You cannot come and colonise my state with cows. Even the name itself is despicable because it gives the impression that you want to colonise people and you can be sure that they will revolt. Who is going to be in-charge of colony? Is it an independent state within a state? The thing that should have been done is to create the routes and let us have cattle ranching within those routes, and that could solve their problems. The owners of the cattle will have to contribute to the ranching, the government may subsidise it just as it is subsidising the farms but let those people come and build the ranches.
We need to stop open grazing because it has caused a lot of damage to the country’s quest for food security. For example, in 2003, when Obasanjo said we should produce enough cassava to export to China, I had a farm in Abuja and I went into cassava cultivation. If you saw me driving tractor with a big hat on my head, you will know that I meant business. I planted 25 hectares of cassava. I also planted about five hectares of millet. I bought the best stem of cassava to give me a good yield. The cassava was doing very well and out of excitement, I went to the Export Promotion Council and informed them that I was about to produce enough cassava for export. However, by the time I travelled to Lagos and stayed for one week, I came back to see that cattle had entered my farm and ate every piece of cassava to the ground. I looked at my farm in utter disgust and turned back. I never went back to that farm. I went to apply to use that place for commercial purpose. From what happened to my cassava farm, you can imagine what other farmers in many parts of Nigeria have suffered in the hands of the herdsmen and their cattle. And they do the damage with impunity. So, to stop recurrent clashes between the herdsmen and farmers, government should organise a conference where a decision could be taken on how to restore the grazing routes. This should be improved upon instead of giving land to the herdsmen to take over as cattle colonies. In addition, those who own cattle should apply to the natives to get land to build their ranches and government must protect them from rustlers who go to steal cattle from them. The idea of cattle colony should be discarded because it will cause more trouble for Nigeria.
You are a key stakeholder in the mining sector and the present administration identified it as a crucial part of its economic growth and diversification agenda. What has been your experience and how would you assess government’s efforts so far to reposition the mining sector?
I have tried my best. I moved from the Ministry of Finance to invest in agriculture by planting cassava. When that did not work because cattle ate up the cassava I planted, I then went into the mining of baryte. Without baryte, you can’t drill an oil well. To effectively carry out the mining activity, I acquired a big processing machine. My major mining site is at Akpet in Biase Local Government Area of Cross River State. The first problem with mining in Nigeria is that nobody has effectively identified where the solid minerals are and the estimated reserve. For instance, we have gold in Cross River, Zamfara and Kaduna states but nobody knows the estimated reserve of the gold. Jos in Plateau State is filled with solid minerals but nobody knows the estimated reserve. We mine blindly.
The government should first of all determine the extent of the solid minerals instead of allowing artisanal operators to continue mining blindly.
When I started mining, we were doing well because I was able to buy barytes from other miners and I took them for processing and then sent to Port Harcourt, but then government intervened and allowed importation of barytes and that impacted negatively on us. We could not afford to sell at the price Morocco was selling barytes to Nigeria because we spent money on diesel to run the electric plant in order to process it while they have steady power supply in Morocco. So, government policy also worked against us.
Therefore, we need to provide the enabling environment for to enable investors in the mining sector compete favourably with their counterparts in other parts of the world. We need to improve the mining sector because it promises to be one of the frontiers of sustainable growth in the Nigerian economy.