Buhari should allow skillful people to make economy better — Utomi

Professor Pat Utomi, proprietor of Lagos Business School, including CVL, in this interview laments that Nigeria has produced so little since the dominance of oil took root in the 1970’s and 1980’s. he advocates that Nigeria must produce or die.

ABOUT a year of the leadership of President Muhammadu Buhari, the economy has gone into recession; how did the country get here; Was this unavoidable?
First of all, to be fair to everybody, there is a thesis in economics that is familiar with in the area of business cycles; what goes up tends to come down and goes back up again. However, one of the skills everyone tries to acquire today is that you aren’t worse when the business cycle heads south. Meaning it is able to manage the trajectory of travel such that even when things are turning southwards you minimise the period of turf and reduce the negative consequences of people’s quality of life. At the heart of what determines the performance of economies or outputs, I operate around a basic mantra, Nigeria must produce or die. Unfortunately for us, Nigeria has produced so little since the dominance of oil took root in the 1970’s and 1980’s. Before this period Nigeria operated a federal structure that allowed sub-national governments to drive expansion of outputs. Regions were engaged in fierce competition about who would most boost outputs in their territories. If you look at industrialization, that competitiveness is referred to as competitive communalism.
In the 1990’s the structure of Nigeria’s industrialization had technically become unitary in the military regime and output had come to matter so little. What began to define Nigeria was a prebendal culture, a phenomenon that was most clearly identified by Richard Joseph, an American scientist in his book on Prebendal politics in Nigeria. This culture reached its worst in post-1990 when governors were no longer people who contributed to the economy but became leaders in plundering. They go to collect their prebends and squandered it.
This further compounded when basic economics suggests to anyone who dares to think that oil prices will stay high forever; it will not be. So, the first thing to think of when commodity prices are high is savings.
Next is diversifying the base of our economy. Though, this was included in virtually all budget speeches in the past years, nothing was done about it. That is why in the 1980s I was one of those so-called analysts who media houses run to once the budget is announced. Then, in Novemebr people would come back and lament on how it was poorly implemented. I would get angry because a good policy would always include proper implementation. I made this argument for several years. Then, it became clear to me that the people that make this budget either do not care or just carry it out because it’s a public process. Because the same man who makes this budget proceeds on a project that wasn’t included in the budget.
As oil prices reached its highest, we failed to save; the budget policy and implementation was reckless. So, that was what was going on. I wrote several years ago that we should have a policy that devices three pots for our saving. One, the fake account. The distributable pool fund. This is the fund where all the fiscal transfers from the centre to the sub national governments take place. We should not take into that pot more than $40 of the crude oil barrels we sell.
The next pot is the one where we put in every dollar between 40 and 60. This pot is for us to turn to it if oil drops, as we are experiencing now. This is the stabilization account. It should be fundable as quickly as possible. We use it to bridge the difference between what oil prices are selling for and what allocated price is on the budget. This would ensure we have a constant economy instead of the volatility of oil hitting our budget process the way it was in those days that we those we kept abandoning projects
Three, the sovereign wealth fund or a future fund. These are monies invested elsewhere and it can be used later as in Malaysia and Saudi Arabia.
This speech was given in the presence of the then Finance Minister, Dr. Ngozi Okonjo-Iwela. To her credit, she said I was right but the politicians aren’t allowing us to do it. The elite has done us a lot of problems which is why we are essentially in this type of problem now.

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This was why Nigerians voted for change because they wanted this downward trend reversed. Is there a plan to make the change happen in positive direction?
One of the scandalous remarks I make is that the partner we are looking up to is Venezuela and it seats on the world’s greatest crude oil reserve and it has no power like Nigeria and before oil prices went anywhere their economy had gone south and if we aren’t carefully we would be next in line.
As for the question of what the plan is, I don’t know the game or where it is. But I believe there is a plan, one that was well articulated and which I participated in. Like the Vice President said on my 60th birthday in February, the APC and I developed a manifesto or roadmap. I gave more of my time to it and this went on for weeks. The principals in the process that function out of my house taking inputs from Abuja were my friend, Wale Edun, and the Voice President and one or two people. So, there was a plan but from my perspective I don’t think those plans are being followed.

So, what is the way forward for Nigeria?
Nigeria must turn to a more inclusive process of decision making. Presently, it’s too narrow and one or two people do not understand the dynamics of economies as well as can become available to make inputs. The presidency needs to also learn a thing or two from Cardoso who was a leader of the dependency theory. All his life he makes policies of regretting international policies. He is a Brazilian. He became the finance minister and enlisted the help of financial experts to help redeem their economy. Even though the plans were different from his academic views, he implemented them and the Brazilian economy was revived from the throes of inflation.
So, President Buhari has to forget those things he believes in and allow people who know better to come forward with suggestions on how to make the economy better.
But CVL has been doing a lot with devalued leadership
One of the things that led to starting CVL was certain recognitions that people don’t know what it means to lead. Most times you see people tot of as leaders scrambling to advance their self-interest. When you see that you know such isn’t a leader as leadership is us- centered not self-centered. Thinking of others and acting in their best interest and eventually you as an individual would profit. So we thought of mentoring young people and produce books on economic leadership and entrepreneurship and a sense of leadership and through a variety of programs for 12 years we have achieved this.
We have a number of flagship programs, one of which we just finished graduating a 100 of them. This spanned through months taking them through a number of entrepreneurial skills and then giving them start up kits to pursue their interests. We have programs that come up once every other month. Used to be monthly but we have changed that. We have had 34 LWT calipers of which Dr Ekwueme was part of them. We try to avoid inviting politicians but people who have successfully held leadership positions. We showcase them as examples to know is to lead

What has the feedback been like? In terms of participation, what has the success rate been?
Fantastic. It requires a lot of work. The number of young people who come to this thing cannot be enough to project to those in needs hence we are coming up with a television series and putting it online like on youtube.
In another programs we have, we bring young CEO’s who share on how they have climbed up the ladder and the challenges they faced on their way up so young people can learn. Just like LWT has a magazine, the leadership series has its. In addition to this, we run boot camps and other training programs and advocacy for values because we need to encourage society the importance of promoting certain values that define us
Still on leadership, the current leadership challenges from the National Assembly to other government bodies, are you doing anything to establish these institutions in the right path?
As much as we can, we get involved in programs they have but to be honest, most of them are lost which is why we focus more on tomorrow. To tell you the truth of the matter most of these present leaders are beyond salvation. So you can only deal with them from the view of discipline or punishment for those caught but those coming can be prepared to have a better attitude to leadership.

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Young Nigerians crave for role models, is CVL in partnership with agencies, universities or collaborating with them for better leadership training?
We are trying but we aren’t perfect and it’s not always easy as it looks i.e the collaboration. However we partner with the private sector to deliver these packages and we engage from time to time some individual government agency leader who experience CVL and call to help but we haven’t spent a lot of time building former relationships with government officials.

On diversifying the economy, you are doing a lot with agriculture, what are the opportunities in Nigeria?
Leadership also encompasses the civil service, our environment, in our families. A few years ago we started showing how things affect us. Because agriculture is very central to where Nigeria is going hence we are doing a special focus in agriculture this August. So, we are doing something practical about it hence we have acquired 200 hectares of land in Edo so this very month we shall have an integrated produce city which is a hub for farmers everywhere to bring their produces and adequate storage has been provided while hotels and commodity experts come and move the purchased items to their complex and within these complexes, further manufacturing goes on. Farming is a major concept and farmers have challenges with funds especially with the present economic situation, so, what have been put in place to ensure a laudable project that can be accessible to farmers to receive funds?
There’s a window with CVL and we are also working with foreign equity firms to raise the funds needed for this project but we have gotten traction and we are moving forward so there are sources we can get revenue from.