President Bola Tinubu did not foresee the enormity of Nigeria’s challenges before taking over in May 2023. This is according to Bayo Onanuga, his Special Adviser on Information and Strategy, who is also of the view that the persisting pressure on the Naira and foreign exchange crisis could be tamed if companies look inward and adopt backward integration. Nigerians also need to curb excessive demand for dollars, especially for holidays and education abroad. In this interview with John Osadolor, Managing Editor; Onyinye Nwachukwu, Abuja Bureau Chief; and Tony Ailemen, Assistant News Editor of BusinessDay, Onanuga further bares his mind on Tinubu’s economic policies, ten months into his leadership and ongoing efforts to tackle present challenges.
Will it be right to say that President Tinubu did not foresee the present enormous challenges in the country when he took over in May 2023?
Yes, when you are outside, you will not have the full picture of things until you get inside to see what has really happened. I think that was the case. It was when President Bola Tinubu got in there that he knew the full enormity of the problems. It was then that he knew that there was no money to even run government affairs. You can see that he had to immediately remove the oil subsidy instead of waiting till June. Although he knew there were problems because the NNPCL was already choked up, he never anticipated that it would be that bad. Even if he hadn’t removed the subsidy at the time he did, maybe there would have been no fuel in this country in the month of June. So, even though he knew that there were problems already, it was only when he got there that he got the full picture. It was when he wanted to know the actual state of accounts with the NNPC and the CBN, to know where the money was, if there was any money at all, that he got the true picture of what was really on the ground.
This was probably because he took over from another APC government. He is very, very reluctant to blame the previous regime. That is why he kept saying I inherited liabilities and assets. From my own point of view, I will say that he inherited mainly liabilities. If you look at the last budget of former President Muhammadu Buhari, about 97 percent was supposed to be used for debt servicing. The budget was predicated on N14 trillion in borrowing, while capital expenditure was just about N1 trillion. So, imagine if you had already committed 97 percent of your revenue to debt servicing alone. Out of the N23 trillion budget, what do you have left? That was why President Bola Tinubu had to bring in a supplementary budget, because he was already raising some new funds to meet the challenges on the ground. He had to block some holes and raise funds to implement the supplementary budget. So, I will say yes, the president didn’t anticipate the enormity of the challenges on the ground when he took over.
Q: “Well, I think Nigeria was already broke under former President Buhari. So, like I said, what President Tinubu is doing right now is trying to see how we can manage our resources better to revive the country. He is doing all that is necessary to take us out of the woods.”
Did Nigerians expect a smoother transition given both parties were from the same political camp?
Yes, but it was not like that. If you looked at what had happened, even in the run-up to the primaries of the APC, it was as if there were some people in the party that didn’t want Asiwaju to take over from former President Buhari. So, there were all kinds of games played. Even in the election itself, some also didn’t want him to win. It may not even have been President Buhari himself, but some people around him. We believe that they were working for Atiku Abubakar. You know, as people say, “Man proposes, but God disposes.”.
Don’t forget that it was the same APC government that introduced currency change on the eve of the election, which made the naira scarce. You can imagine the resentment by members of the public against that policy; around the same time, fuel was scarce. An APC government knew fully well that an APC candidate was contesting that election, yet they were doing things to make people unhappy and make them resent the same APC.
People around former President Buhari didn’t want the APC to win the election and succeed the APC government. That was very clear from the games that we saw and from what played out. So, just because it was the same party did not mean that Tinubu knew what was happening. It is only now that the probe being done at the CBN, for instance, threw up a lot of things that happened that ought not to have happened. So, we are trying to manage the situation to make sure that Nigeria is taken out of the woods. Many of our countrymen didn’t know that things were really bad. And that is the pitiable part of it. As I said, because it was also an APC government, we cannot really go out of our way to lampoon that government. So, we cannot attack in the same way we would if things were different.
Like you alluded to, the President obviously didn’t know the level of the rot in the system before he took over. Don’t you think Nigerians deserve to know what he later found out rather than cover things up?
I remember during the campaigns when the former CBN Governor, Godwin Emefiele, was saying Nigeria had $34 billion in reserve. We had the information that it was far less than that, but like I said, we didn’t have the full picture of what was going on.
Don’t you think that even in a very modest way, you need to explain to Nigerians where we are coming from, where we are, and where we are headed?
Well, I think these have been explained. I just stated that under President Buhari, Nigeria was spending 97 percent of its budget to service debts. It simply means we were broke. There was no money. The same government borrowed over N22 trillion through what they called “Ways and Means’ ‘, which means that there were lots of problems. They were also using close to N1.5 trillion to strengthen the naira every month. A lot of people were doing round-trips with the dollars from the CBN. No doubt, President Buhari did well in some areas of infrastructure. He may not have solved all the problems, but there were some notable things he put on the ground. But there are still huge gaps that this government is trying to cover.
Many people think that state police may be the silver bullet in tackling the insecurity challenges we have presently, though it is long overdue. Does the government fear any huddles, and how soon do we expect it to take off?
The President has mandated the governors to further discuss the issue of state police at their National Economic Council (NEC) meeting. The Senate is already making moves to amend the 1999 Constitution to allow this to happen. However, I think that it’s just a matter of semantics. Some of the states have already set up state police. Like the Amotekun, for instance, the fact that you call it Amotekun does not mean it is not state police. It’s a kind of police force. The forest guards, too, are a kind of police, so you can have various police formations. The states can go ahead, form their own police, and call them different names.
You can call them state guards, but the conversation continues at the NEC, chaired by Vice President Kashim Shettima. When the President mentioned it, all the governors applauded it, which means everybody knew of its importance. This is because insecurity is at the root of our problems. In many parts of the country, farmers are afraid to go to their farms because they say criminals kidnap and kill them. So, everybody knows that they have to be fast at bringing the issue into reality. The national assembly is doing its own thing, and the executive arm of the government is also working hard to fast-track it.
The president appears to be firing on all cylinders in terms of policy announcements. When will he narrow it down to specifics and begin to deliver appreciable results?
I cannot be emphatic on that. But you know that the President’s programme is predicated on an 8-point agenda, which includes food security, ending poverty, economic growth and job creation, access to capital, improving security, the rule of law, and fighting corruption, as well as improving the playing field on which people and particularly companies can operate. These span several spheres, including agriculture, food security, and the enhancement of the economic well-being of Nigerians. He cannot leave any of them behind.
For example, look at the solid minerals sector; this is critical for driving revenue. This sector was moribund, and now somebody is there trying to wake it up. He has shown that there are possibilities there. There are things that can help the economy grow; instead of depending only on oil, we can harness the benefits from that sector, and so everything is important.
We’ve seen how Naira devaluation and other policies have thrown Nigerians and manufacturers into enormous hardship. What more do we expect from the government to ease the pain?
There is no doubt that the naira is currently undervalued and that the rates we have now are artificial. What the CBN is trying to do is make sure that it harmonises the rates, both the official and the one by the Bureau de Change operators. Some people are speculating on the dollars, and the CBN has been working to ensure that they rein in these crazy demands for dollars purely for speculative reasons. As for manufacturers, I think that those who are genuinely interested in manufacturing will engage in backward integration.
I read that Nestle, for example, used to import its raw materials, but they have resolved to use local materials. Most companies can look inward. I see many companies that genuinely want to invest in our country beginning to look inward instead of relying solely on importation. I also think that with the coming of the Dangote refinery, most materials can be sourced locally. It is just for the companies to embark on backward integration.
As for parents whose children are studying abroad, honestly, I do not believe that those universities abroad are better than what we have here. We have seen our children go to school here, and when they go abroad for their Masters degrees, they beat their European and American counterparts hands down. So, I don’t think there is something wrong with the system here. The people who have made it look as if something is wrong are the people at ASUU who keep disrupting the academic calendar. For those who embark on holidays and tourism abroad, I think it is time for a pause. There are places to visit in Nigeria; instead of going to Dubai, go to Jos, in Plateau State, or Obudu, in Cross Rivers State, where you can relax. What is going on will make Nigerians develop a shift of mind. We just have to change.
Do you also think that institutions like the Financial Intelligence Unit (NFIU) and the EFCC may need to do more to bring these naira speculators to justice?
You remember that some weeks ago, the EFCC had already started taking action to deal with this issue. They started with the probing of about 52 companies, including the Dangote Group, alleged to have been involved in the foreign exchange breach. But shockingly, we saw some people saying why are they doing that? It will spoil businesses, etc. They have started the process, and they have also raided illegal BDCs across the country, including Abuja.
There were all kinds of things that happened under the former CBN Governor, Godwin Emefiele’s regime. We know of the collection of $6.2 million in cash and that the former Secretary to the Government of the Federation, Boss Mustapha, said his signature and that of former President Muhammadu Buhari were forged. We are also aware that the EFCC is a bit overloaded with so many assignments at the moment. Despite that, I think they are doing their best to tackle all these things. The NFIU, on the other hand, only tracks these things, and when they track, they alert the EFCC.
Before now, the CBN was driving rice production through its anchor borrower programme. Are there other areas that the current government is investing in to drive food production?
Yes, the federal government is investing in dry-season wheat and rice production. Part of the reason why the federal government called for a meeting with the governors was because some of them have already committed to the cultivation of land for rice and wheat farming. About 500,000 hectares of land are already being cultivated across the country. One of the states that is collaborating with the federal government is Jigawa. When they discovered that farmers in the state could not access the money, the state went ahead and released it to them. That is why the president called the governors. Jigawa was initially given about 40,000 hectares, but on their own, they increased it because they were interested and wanted to succeed. The President has challenged other states to emulate Jigawa. We can only boost food production at the state level; after all, the federal government has no land of its own.
The Trade Union Congress last month disagreed with your comment on how much the federal government should pay for the new minimum wage. Can you speak to this?
What I said is that the federal government may not be able to pay N100,000 as the minimum wage. Look, where I started from was that most people will think that Nigeria is that rich. We are potentially rich, no doubt, but when you look at all the indices, you will know that we are poor. Look at our budget. Last year, our estimate was about $34 billion, but today, when you look at it, you will find that it is just about $17 billion for a country of about 200 million people. South Africa’s annual budget last year was around $32 billion; for Indonesia, it was about $304 billion for about the same kind of population. If you look at our GDP and compare it to either Kenya or South Africa, there is about $2000 plus GDP per capita.
I am not disputing that we are potentially rich, but the reality today is that we are damn poor, if you look at what we have. People have also analysed that if you compare us to other countries, like Kenya, South Africa, and so on, what we have as revenue as a percentage of GDP is far lower than these other countries. It is now that the government is trying to see if we can boost our income. As of last year, the FIRS had broken its own target and was able to raise about N12 trillion or so. I think that this year, they may make about N20 trillion; that is what they are targeting. Look at our 2024 budget. I think about N8 trillion has been devoted to recurrent expenditure. Capital expenditure is about N9 trillion, and another N9 trillion is budgeted for debt servicing.
To fund that budget, if you are already overburdened by the number of employees or civil servants at the federal level and you are spending N8 trillion on them, even if we assume they are 1 million, what are you going to spend on the rest of the society of over 200 million people? Assuming all federal employees are 1 million and they are not yet gulping 1/3 of your budget, if you now say you are increasing wages, do you imagine what the salary bill will be? It will go higher, and the same government said last year it would defund some agencies because of the high cost of governance. Many agencies were defunded. But at one of the FEC meetings, they brought some of them back because some of the agencies were established to regulate other agencies, and the government said there was no point in defunding them because they were essential. The money being spent on salary bills alone is very high, and you want to add N100,000 to it? I just expressed my feelings; I am not the finance minister. I didn’t say we would not pay; I only said we may not be able to pay.
As of today, even with the minimum wage that former President Muhammadu Buhari introduced about five years ago, 26 states out of 36 have not been able to comply. Now, if you go ahead and approve another N100, 000, they will not be able to pay because they don’t have the money. Although I learned that they are earning more revenue from the federal government, I think there are problems. All these are because we have a very large population without the means to solve the problems.
Even with the little we have, some people find themselves in positions of power, and they keep stealing from the resources of the people. This further pauperizes the citizens. That is part of the problem we are facing. Left to me, I will want the workers to be paid N150, 000 to N200, 000 in a month. That is what I think any low-paid worker can struggle to survive on, given the current inflationary situation.
How do you think we can best deal with this situation, because inflation keeps eroding the purchasing power of Nigerians?
Even before this problem was caused by the removal of fuel subsidies, the workers were already in trouble. Under the last regime, the N33, 000 minimum wage approved at that time could not take them anywhere. Things were already that bad. Now, things are even getting worse. I don’t know how, but the government may have to look at its finances and know what to do. They may meet the workers halfway. The problem is disposable income. Even if you are earning half a million Naira and you find out that today, your money cannot buy you what half a million could have bought a year ago, everybody is affected, including the millionaires amongst us. We are all affected by inflationary trends. It is left for those handling economic policies to see what can really be done. The government believes that if we were able to crash the prices of food, most of the problems would have been tackled. Food is very key. So, if you are able to produce enough food and crash the prices, people will be able to find out that, from the salaries agreed upon, they can feed their families and still have something left. That was why the President called in the governors on this agriculture strategy.
Will the government, for instance, consider reducing the workforce and increasing salaries?
I don’t think that is possible at this point in time. It will worsen the situation. This president will not do it. I remember when the Labour leader complained about the large size of his cabinet, he said that he was rather creating jobs for the people. The president said that when he makes appointments, he is creating jobs. For instance, he has given me a job to do, and maybe I have my own dependents as well. That’s how the economy can be expanded, unless there is a visible sign of waste. It is for the people in charge of the revenue to work harder to raise more money so that the government can pay the workers.
But don’t you think the government is over-bloated?
You know that the president has already taken steps to implement the Stephen Orosanye on rationalisation in the federal civil service. Orosanye’s panel already recognised that the government is too big. Even now, the National Assembly is still establishing several more institutions. I saw them passing the North West Development Commission for second reading, and I think the South East Development Commission has been passed. They have already approved of the South West, I think. By the time you have as many as six commissions, they are adding more to government bills. They keep building even more universities, and they will be funded by this same federal government. If the federal government were a donkey, they would have killed it by now.
You sound like Nigeria is broke.
Well, I think Nigeria was already broke under former President Buhari. So, like I said, what President Tinubu is doing right now is trying to see how we can manage our resources better to revive the country. He is doing all that is necessary to take us out of the woods. There was no money when Buhari left. No money! The country was very down.
The president told the state governors to allow the CBN to do its job. What was the reason behind his comment?
The president was speaking to the governors to allow the CBN to do its job. The CBN governor is stabilising the exchange rate. There was something else he told the governors: that people are of the opinion that anytime they collect their FAAC allocation, the exchange rate goes up and the naira falls. He told them that they should watch it, be cautious, and not allow that kind of trend to continue. The CBN believes that the naira is undervalued and that what you have now is being caused by lots of factors. Many politicians today use dollars instead of naira.
Parents are hustling after dollars because they want to send their children to schools abroad, not even in Europe or America, but in some of these West African countries because they don’t want their children to go to school in Nigeria. Yet, we all know that nothing is wrong with our schools except for the disruptions caused by the ASUU people. Then you have manufacturers that always want to import raw materials, even when they can look for local alternatives. Once we can reduce the pressure, the naira will appreciate. People even speculate. Someone told me of a friend of his who bought the dollars, and by the time he sold them, he had made a N20 million profit on them. In some other countries, that person will be in jail because he engaged in speculation.
Apart from the release of grains, are there other intervention measures to expect?
As you are aware, the distribution of grains has already started in the state capitals of the Northwestern States, and it’s free. The government will buy from millers too to augment. Aside from the short-term measures, the government is working on the massive cultivation of food items, which is long-term. That is why the government is not encouraging the importation of food because that will discourage local production. We need to grow our food locally.
Are you confident that these grains will not end up in the hands of those who do not really need them?
Well, I am aware that the government has put structures in place to ensure that they are not diverted. Do not forget that all the governors are involved, and they are all on the same page.
How soon do we expect a new minister of labour and employment, given Simon Lalong’s resignation and ongoing negotiations with organised labour over the new national minimum wage issue?
This is certainly not a problem at all. We have the minister of state for labour and employment, who is handling the affairs of that ministry. So, it is not a problem. The president will make the appointment very soon. The plateau where the former minister came from will get a replacement soon. Do not forget that Kaduna didn’t get a minister at the beginning, but as time went on, they got theirs.
