Almost three months after President Muhammadu Buhari inaugurated the Economic Advisory Council (EAC) to help lift the Nigerian economy from its sluggish growth, economic analysts are questioning the effectiveness of the council.
This is coming as the economy has been stuck on a slow growth path and the hope and optimism that came with the inauguration of the EAC are fast waning.
The Economic Advisory Council was constituted by President Muhammadu Buhari on September 16, 2019 to replace the Vice President Yemi Osinbajo-led Economic Management Team (EMT).
The EAC, chaired by Doyin Salami, with Mohammed Sagagi as vice-chairman, Mohammed Adaya Salisu as secretary, and Chukwuma Soludo, Bismark Rewane, Ode Ojowu, Shehu Yahaya and Iyabo Masha as members, was set up to help give advisory to the president that would help rescue the troubled economy.
The council, according to a statement from the presidency, would 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.
The council would have monthly technical sessions as well as scheduled quarterly meetings with the president, although the chairman may request for unscheduled meetings if the need arises.
But analysts are doubtful that the EAC is effectively performing this role, and for some, this is no surprise.
“Recall the committee that was replaced, the Economic Management Team, was almost non-functional throughout the years of existence. It’s no surprise to see the EAC following suit,” said Ayorinde Akinloye, research analyst at Lagos-based CSL Stockbrokers.
“Furthermore, it’s important to recall it’s an advisory committee and does not have the power to influence decisions, they can only suggest, but right now, it’s tough to believe this committee would even be allowed to convene,” Akinloye said.
He said the constitution of the council, at a time when people criticised the ministerial list, could have been done to soothe the agony of the agitators and that it was obvious the presidency was only playing to the gallery.
Another analyst, who spoke to BusinessDay on the condition of anonymity, said with a failing economy and a president not known for taking advice from outside his closed circle of family and friends, it was obvious from the beginning that “the economic advisory council will have a canyon to cross”.
The Nigerian economy continued to expand at a sluggish rate, 2.28 percent, in the third quarter of 2019, according to the National Bureau of Statistics (NBS).
Although the fastest growth in four quarters, the GDP rate remained lower than the country’s population growth rate of 2.6 percent, a trend that has been constant since 2015.
But Yinka Ademuwagun, an analyst at United Capital, said the council may have been working underground without much noise.
“The law does not permit the council to speak to the public on what it is doing or has done, but from what I have heard from reliable sources, the committee has been doing its job of advising the president on economic issues,” Ademuwagun said.
Andrew S. Nevin, partner – West Africa financial services leader and chief economist, told BusinessDay that the EAC is not permitted to comment as it is only meant to “advise the president and the president decides what to disclose”.
“I think we can all be confident given the EAC members that the EAC is giving robust counsel to the president,” he said.
Examples from other lands
The idea of an economic advisory council is not unique to Nigeria as it is a tool widely used by leaders of governments to harvest alternative understanding and views about the economy as well as gain clarity as to the progress of macroeconomic policies being implemented.
Several presidents of the United States of America since 1946 have always deemed it fit to constitute a council of advisers. A similar initiative has been replicated in Canada, but the closest to Nigeria is Egypt.
Egyptian President Abdel Fattah el-Sisi in September 2014 inaugurated an advisory council made up of academics and experts. According to the presidency, the council was aimed at providing a strategic vision for the state in the future and to provide advisory opinions on projects.
Through the council and the policies by IMF, Egypt has since then achieved macroeconomic stability, which is a precondition to attract investment, raise growth, and create jobs.
Egypt’s current account deficits have fallen and foreign exchange reserves have been at their highest levels so far. Growth has recovered from around 4 percent to 5.5 percent now and is expected to reach 6 percent by next year, while unemployment has fallen below 9 percent to its lowest level in over a decade.
