The candidate of the Social Democratic Party, SDP, in the 2023 presidential election, Prince Adewole Adebayo, in this interview, speaks on the management of the nation’s economy, argues against a revolution as canvassed in some quarters and what needs to be done for a more equitable country. Excerpts:
Recently, former Speaker of the House of Representatives, Hon Yakubu Dogara, was quoted as saying that President Bola Tinubu inherited a dead baby in the form of economy from the Buhari administration. If you had won the 2023 presidential election, what Dogara described at that lecture was what you would also have inherited. What do you make of his remarks?
Well, it’s obvious that the economy President Muhammadu Buhari left behind was a poorly managed economy. It is like an emergency room patient, your road to recovery depends on a good diagnosis by the doctor. So, if the doctor is able to know the reason you are ill, he will be able to put you on a solid path to recovery. What President Tinubu has done is to stabilise the patient, but I’m not so sure he has managed to identify the ailment. So, the patient is not going to die immediately, but he hasn’t found a cure.
One, he has managed to get more revenue, at least in nominal terms, and the domestic borrowing that was a feature of President Buhari’s public finance has reduced. Of course, because of other wrong policies, that money he has gotten, in real terms, will not be able to finance a lot of government spending and infrastructure. However, in terms of balance sheet, Tinubu has managed to have a better balance sheet than what Buhari left for him.
The second thing that helped them, which we’ll know in the long run whether it’s really a good thing to do, was that they rebased inflation. So, they started counting inflation differently. If they say inflation has dropped to about 20.7 percent now from 21.7 percent last month, it’s not because the economy is performing better but because the counting has changed.
Whether the counting is more reflective of reality, let us see what happens by the first quarter of next year when they are implementing their budget. Remember that the 2025 budget doesn’t appear to have come on stream yet. So, we won’t be able to know how that works in terms of macroeconomics.
Then, the third thing that has worked for them is the relative fall in food inflation. Food inflation has dropped, and food inflation is a major component of the inflation basket. Since the prices of foodstuffs have come down a lot, it’s not that those at home are going to feel it because it hasn’t dropped to the level where they can feel it, but it has dropped in the numbers.
So, it’s like you trying to catch a bag of rice that is placed 10 feet above you. Your hand cannot reach it, but if you drop it to eight feet, your hand still cannot reach it, but it’s lower than before. That’s how it is.
So, in a way, the economy, in terms of these numbers, is not worse now than it was last year. It’s slightly better but far, far away from where it ought to be. And if you look at the inflation numbers across some regions for example, we are the fourth highest in inflation. Benin Republic, next to us, has inflation barely above one per cent. If you go around the ECOWAS countries, the countries that use CFA, the highest is Senegal because of its high borrowing.
We are still at 20.7%. So, we need to get to as low as seven percent before we start to look at recovery from the point of view of inflation. It’s a good number, a better number than before, but it’s not a number that’s going to take you to the Promised Land.
Dogara also said N22.7 trillion was printed and injected into the economy through ways and means by the Buhari administration, thereby destroying the value of the Naira. What do you make of this?
What was the National Assembly doing when those kinds of things were happening? Let us understand it. These confessional statements are being made by the same people who came to power in 2015. So, there are two ways to look at it. Look at it as an economist; you don’t blame anybody. You just analyse the numbers as they come in, and you can say it is trending better or trending worse. But, if you look at the political economy or the politics of it, you will see that they are the same people.
If you look back to the Abacha years, you will see there was a time they were doing Ajaokuta debt swap and all that. That’s how a lot of money got lost. In some regimes, they used different things. In the Jonathan government, they used crude in exchange for petrol to perpetrate their own fraud and many other things.
In President Buhari’s administration, they went everywhere, but they were famous for the dual exchange rate and the allocation of foreign exchange to people who were known and who would later sell it to somebody else. Many of them who were influential at that time, participated in it. When this government came, I think they said they didn’t want to do that, but they are doing other things that suit them as well.
If you look into their own manner of awarding contracts, many things that they are doing, I would probably do those things differently. Maybe, when the next government comes, we’re going to start talking about what they are doing as well. But, I am more interested in what we ought to be doing. What we ought to be doing is not celebrating the end of one criminality and the beginning of another.
So, President Tinubu is a better revenue collector than President Buhari. That’s not saying much because President Buhari wasn’t very good at many things that have to do with good governance, but it’s an improvement that needs to be recognised. But it hasn’t reached the point where we are collecting a sufficient amount of money because if you look at our government revenue collection relative to our GDP, it shows that we are not efficient in revenue collection. Then, on the side of appropriation, they have not been transparent in appropriation, and they’ve not appropriated in line with Chapter 2 of the Constitution. So, I will not endorse the appropriation, but it’s better.
In fact, at the tail end of Buhari’s administration, the National Assembly ought to have impeached him on the basis of the unauthorized ways and means. They were actually called ways and means, but they were outright theft of 22.7 trillion Naira. But the same National Assembly legalised it by retroactively adopting it, so you can’t blame President Buhari anymore. There are many reasons they did it, but national interest was not one of them. So, the question, therefore, is that President Tinubu is trying to block some of the holes that he helped President
Looking at the figures recently released from the National Bureau of Statistics, do they represent hope for better days ahead in Nigeria?
There are two aspects to the study of economics, and it’s deliberate. There’s the macro. What we have been discussing is the overall picture, the macroeconomics; that is what the government is doing by trying control spending, trying to control the prices of money, and trying to manage inflation. That’s at the macroeconomic level.
So, the macro GDP and all of those things are macroeconomic indicators.
So, the way the government can connect is to make sure that people have jobs, that if the economy is improving, or what we want to improve, it can actually percolate to the people. And there are only two ways you can do it.
You can do it by creating an environment where people get employment, and they get paid living wages, and they can start solving their economic problems. Or you make transfers by way of ensuring that you lower the costs of living for people. So, if, for example, you slash transport costs sustainably in a community, the people will save half of their cost of transportation. If you do housing, and you can have affordable housing at about 10% of your income, then you are transferring the success to the microeconomics of the households.
So, it is good that the government is borrowing less. It is good that we are not using our foreign exchange, for example, to import as many petroleum products as we used to do before the Dangote Refinery. It is good that we are in the high season of harvest, and some food will be immediately available to people.
This may not be sustainable when we go outside the harvest season, and we have to go back to the silos to get food, or things like that. But the key thing that will make Nigerians start feeling it is what the government has failed to do. They need to direct the economic resources they are spending to create jobs. I challenged them last year, and I’m repeating the challenge now: They should always indicate how many jobs are created in whatever report they give. Because that is the only way by which they can ensure that a hardworking Nigerian breadwinner can take care of his family and says, “Because the economy has been made better, I am able to live better”.
“Because the economy has been made better, my children, who used to be dependent on me, are now able to work. Because the cost of living has gone down across the board, I am able to save a little more money.” But without that, they will be looking at you and me talking on television like we are talking about a different country entirely.
Because when they step out of their door to try to buy a loaf of bread, a lie will be put to what we are saying. That is very drastic.
President Tinubu’s Tax policy has been described as revolutionary. But like you said, the microeconomics of the whole game is what concerns the average Nigerian. So, do you think the president deserves a pat on the shoulders over the tax reforms?
Everybody knows that President Bola Tinubu, even in his private life, is a tax collector. So, that tax collector experience is an improvement over the disorganized system that he met on the ground. He did tax collection in Lagos; he’s going to do tax collection in Abuja now.
This reform is okay. It’s not the best, but it’s far better than what they had before. But they’re overselling it because what we need to understand is that they’ve done so many other things that have made the N14 trillion they are collecting now not worth the paper on which it is written, compared to what they met on the ground.
So, if you do it in real value, what can you buy? The purchasing power of the N14 trillion is not as sound as N7 trillion in the previous year. So, let us not over-celebrate that, but it’s a good thing to have a tax policy that the people who are running the administration understand. I have a better tax policy than that, but I’m not running the government.
This is the one they want to use. When SDP wins and I come in, I’ll give you a fairer, more equitable, and more realistic tax system that increases the GDP. Because the problem you’re going to have is if you tax people out of productivity instead of taxing them into productivity, people stop spending, no new jobs are created, no new fields open, and the economy is shrinking.
And the economy has to shrink because you are not creating infrastructure out of the money, and
Recently, former Vice President Atiku Abubakar said the manner that this government is running things is likely to cause revolution and uprising in the country. Are we in need of a revolution?
Well, the situation at hand is not salutary for any Nigerian, the average Nigerian, at least. But I don’t subscribe to the point that it means a revolution or anything. It just means a change of government, a democratic change of government, so that we can have a change of policy. Even before we have a change of government in 2027, I am more interested in the government of today having a change of policy and an enhancement of policy.
Our problems are not difficult to solve. If anyone comes to me today and says, “Let’s do a revolution in Nigeria,” I’ll say, “Don’t do anything like that. Just make simple changes.” You don’t need the Arab Spring; you don’t need any of those things. What you need is a more accountable government, a government that is more responsive and smarter in the management of our resources. So, we need an improvement over what President Tinubu is doing. He’s doing something, but he’s not doing enough, and he’s not working at the rate that can answer the needs of the people.
But there’s nothing the government is doing that’s illegal, unlawful, or unconstitutional that you want to do a revolution against them. You just need to keep pointing out the weaknesses in the policies they’re bringing forward, the gaps in those policies.
Moving into the second half of this administration, and at this critical juncture, what would you do if you were in President Tinubu’s shoes, knowing that electioneering activities will take over in the next few months?
The things I would do are not the things that President Tinubu would do. But, if he listens to me and wants to do them, that’s okay. He’s doing what he said he was going to do, and I would have to do my own. Basically, I would pay attention to revenue generation. He’s paid attention to that, but the number he’s getting is not convincing to me because the real value is not growing.
Second, I would shorten my budget dealing with the social sector. If there is a fight between me and President Tinubu, it’s a fight over the social sector. He has, I don’t know why, very little interest in investment in housing, in education, in healthcare, in food and agriculture. And basically, he just assumes that these are revenue guzzlers, and the return is not good enough for him.
So, if he doesn’t do that, he can’t grow the GDP. So, if he doesn’t invest in those things, he won’t be able to create jobs. He can’t create jobs out of the sky. So, he needs to put money into infrastructure, put money into housing, put money into transportation, put money into healthcare, and put money into education. We need to go. I hope that this government is listening.
Although the IMF predicted a 3.4 percent growth in the economy, we’ve experienced a GDP growth of 3.13 percent.
