After the much televised 2011 heated fuel subsidy policy debate which featured yours comradely, Femi Falana, SAN on the one hand and the then Governor former Central Bank of Nigeria (CBN) Governor, Mallam Muhammadu Sanusi, then Ministers Ngozi Okonjo-Iweala (Finance) and Diezani Alison-Madueke (oil) on the other hand, it is unthinkable that I will be back in binary discourse with the respected Emir of Kano. As a debater, yours sincerely is certainly debate fatigue 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 costs of governance. We were on the same page also on the risk management and corporate governance of the banks, prosecution of some fraudulent corporate banks executives, trillion Naira bail outs (read; subsidy for) some few distressed banks under the auspices of AMCON, Sanusi’s interventionist development long term financing in some sectors.
Last Thursday, the Emir after receiving a Life Time 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. Emir of Kano Muhammad Sanusi II was certainly right to have advised the in-coming ministers against policy ”flattery” of President Muhammadu Buhari. However President Buhari must also be weary 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. Naira in recent time 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, fueled 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 February 2011, Sanusi of Central Bank said as much to resist the pressure of the International Monetary Fund (IMF) Monday 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 that we have comparative advantages 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 work for youths who have proven to be vulnerable to insurgency, kidnapping and violent serial gangsterism. Nigeria needs holistic bigger plan for development like China, India, EU not micro- mutually destructive policies of devaluation and subsidy removal. The Governor of CBN, Mr. Godwin Emefiele is right in managing the scarce foreign reserve through restrictions on some frivolous imports. Nigeria more than any nation currently suffers huge capital inadequacy, with foreign-currency reserves sharply fallen 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 1.3 trillion naira ($6.5 billion) a year, (almost half of national budget) on unnecessary job-killing silly imports from private jets to rice, wheelbarrows and 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 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 outworn 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 governance 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.
