BusinessDay
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What exactly is the EAC supposed to be doing?

To distract from the doom and gloom in the country, the government, in September, announced a new Economic Advisory Council made up of seasoned professionals to replace the Economic Management Team headed by the Vice President, Yemi Osinbajo. The new council was officially supposed to “advise the president on economic policy matters, including fiscal analysis, economic growth and a range of internal and global economic issues working with the relevant cabinet members and heads of monetary and fiscal agencies.”

Virtually everyone, including the harshest critic of the president applauded the move. They thought for the first time, the president was correctly reading the mood of the nation and responding to the urgent need for a new economic direction for the country.

However, at the inauguration of the council and its first meeting, the president stated exactly what he wanted from the team: generate Nigeria’s own and regime-friendly data. He believed the prevailing data that ranks Nigeria as the poverty capital of the world, among others, are contrived and misleading. In fact, so critical did he see this task that he termed it “the most important national assignment” of the EAC and not the terms of reference earlier released by the presidency.

“As you develop your baseline study, I would like you to focus on primary data collection. Today, most of the statistics quoted about Nigeria are developed abroad by the World Bank, IMF and other foreign bodies. Some of the statistics we get relating to Nigeria are wild estimates and bear little relation to the facts on the ground, the president told members of the advisory council. “This is disturbing as it implies we are not fully aware of what is happening in our own country. We can only plan realistically when we have reliable data,” he argues.

To further the argument, he pointed to the agricultural programme of his government. “As you are aware, as a government, we prioritised agriculture as a critical sector to create jobs and bring prosperity to our rural communities. Our programs covered the entire agricultural value chain from seed to fertiliser to grains and ultimately, our dishes. As you travel in some rural communities, you can clearly see the impact. However, the absence of reliable data is hindering our ability to upgrade these programmes and assure their sustainability.”

Not done, he took aim at the foreign NGOs working in the North-East of the country. “Today, we hear international organisations claiming to spend hundreds of millions of dollars on IDPs in the North-East. But when you visit the camps, you rarely see the impact. In 2017, when the National Emergency Management Agency took over the feeding of some IDPs in Borno, Yobe and Adamawa, the amount we spent was significantly lower than the claims made by these international organisations. Therefore, actionable data is critical to implement effective strategies to address pressing problems such as these humanitarian issues. I, therefore, look forward to receiving your baseline study as this will help us shape ideas for a sustainable and prosperous future”, the president said.

It is shocking that the president did not know or pretends not to know that most of the data generated and is being used to evaluate the country’s performance is generated by a federal government agency – the National Bureau of Statistics, headed by the brilliant Yemi Kale.

Nigerians forget easily. In November 2018, the Statistician General of the country, Yemi Kale, raised an alarm that his agency couldn’t complete work on the unemployment figures of the country because funds have not been made available to the agency. Analysts didn’t take him too seriously, arguing that the cash-crunch was common to virtually all government agencies in Nigeria as government revenue targets have not been met. When the funds were eventually released and the figures were released in December 2018 showing record unemployment, Kale was summoned and the president ordered him “to change the high unemployment statistics,” according to a statement by presidential spokesman, Garba Shehu.  Mr Kale refused, calling the bluff of the president.

I had feared that he may not retain his job beyond the 2019 elections. But in the absence of anything to latch onto to unceremoniously sack him, the government has decided to create another team altogether in the form of an EAC to do what Mr Kale has refused to do. Whether the EAC members will want to take on the task of reinventing the wheel and generating new data sets different from what already exists is another question altogether.

But there is even a major problem. The views of most members of the EAC are well known – and they are pretty consistent with those of the Bretton Woods institutions that Buhari pilloried. Take for example the Chairman of the EAC, Doyin Salami. He was the Vice Chairman of Buhari’s transition committee in 2015 and until 2017, a member of the monetary policy committee of the Central Bank of Nigeria. As a member of the MPC in 2015, he objected to the administration’s interference with the monetary policy decisions of the CBN and the refusal to allow a market-determined exchange rate even in the face of severe scarcity of foreign exchange. As he puts it then, the apex bank cannot maintain a fixed exchange rate, independent monetary policy and free movement of capital at the same time.   “You’re allowed to choose two out of the three,” he argued.  “The key question is which two will Nigeria choose? That will have to be answered in the coming months. I would rather Nigeria maintain independent monetary policy and have a market-determined exchange rate.”

Also, in 2017 as a member of the MPC, Salami blew the whistle on the illegal financing of the federal government by the CBN and the crowding out of the private sector. Citing relevant figures to support his case, Salami avers that “It is clear that the CBN has provided piggy-bank services to the federal government.”   However, the “massive injections of cash” to the government doesn’t reflect in higher inflation and currency weakness because the CBN through “special auctions” raised the cash reserve requirements for banks beyond the stipulated 22.5 percent thus skilfully crowding out the private sector.  “We thus find ourselves at a point where government borrowing from the CBN is neutralised by raising the CRR of banks, thereby limiting private-sector access to credit”, said Salami who was categorical that “Monetary policy management is presently about funding the federal government.”

Ditto for others members of the council such as Charles Soludo and Bismark Rewane.

The contradiction between the Buhari government’s stated intentions and the famous body language of the 76 year old leader is often glaring. While on the one hand the government declared in its Economic Recovery and Growth Plan (ERGP) – the government’s medium-term plan to revive the Nigerian economy – that it will leverage the power of the private sector and allow markets function optimally, in reality, on the other hand, the president continues to push for the state to control the commanding heights of the economy by not only refusing to nationalise dead state-owned enterprises, but also striving to create new ones and taking over the functions of the private sector.

His pledge to allow the private sector play a prominent role in the economic life of the country ended at the campaign trails. His actions and dispositions since coming to power have all been anti-business and pro state-led economy approach. From the retention of subsidy on petrol, the refusal to approve the privatization of the nation’s dilapidated and perpetually non-functional refineries – even as all experts voiced their doubts on the state’s ability to revamp the refineries and get them to operate at a profit, the mopping up of funds from banks and their concentration in the Central Bank even when the economy needs revamping, to the talk about a national carrier, national shipping line and other such relics of the 1970s and 1980s that are no longer fashionable, the president’s intentions are clear – to crowd out the private sector and reinstate the pre-eminence of the Nigerian state.

In 2016, when challenged on the decision to exclude members of the private sector from the economic management team, the President did not mince words in his response: “We are averse to an economic team with private sector members” because such persons “frequently steer government policy to suit their narrow interests rather than the overall national interest”. Buttressing the president’s position further, the media adviser to the vice president, Laolu Akande further explained that the presidency considers economic management as purely “a government affairs”.

It remains to be seen what the EAC will do and whether their work – which will largely mirror recommendations of Bretton Woods and multilateral institutions  anyway– will be accepted and turned into policies. But if we know anything about Mr Buhari, the creation of the EAC is only a publicity stunt and none of its recommendations – especially ones that goes against Mr Buhari’s statist agenda – will translate into policy.

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