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Revisiting the idea of a coordinating minister for the economy

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Unlike the situation in 2015 when he was in no hurry to assemble his team many months after being sworn in, President Buhari is expected to constitute a new cabinet sooner than later. His second term in office provides an opportunity to revisit the jettisoned idea of appointing a coordinating Minister for the economy. It will be recalled that the practice of having a coordinating Minister was introduced by former President Goodluck Jonathan when he made Dr. Ngozi Okonjo Iweala the Minister of Finance with an additional responsibility of coordinating economic activities of other Ministries. Her appointment, it seemed then, pointed to the need to address the negative spillovers from inadequate synergy among Ministries, Departments and Agencies of government to the extent that in many instances ‘’the right hand did not know what the left hand was doing”. This unique coordination role for Ngozi Iweala was criticized at the time not least because it had no constitutional basis. Being the first of its kind in Nigeria’s history, her elevated office was seen as equivalent to that of a Prime Minister, which placed her in a position to superintend over every other ministry, department and agency of government. She was, arguably, the next most powerful cabinet member in that administration after President Jonathan and Vice President Namadi Sambo. Against this backdrop, it was not difficult to understand why the Buhari administration chose not to continue with the practice. The Vice President, Yemi Osinbajo, made it clear from the onset that there would be no such designation as “coordinating minister for the economy” in President Mohammadu Buhari’s administration.

Nonetheless, there is an economic sense in having some sort of framework for policy coordination. Since the fortunes of key Ministries such as Petroleum, Power, Transport, and Agriculture are heavily interwoven, it would be difficult to have a clear roadmap, with respect to any one of them, until some level of integration in economic policy is achieved. Citing an example with the power sector, Muhammadu Sanusi II, the Emir of Kano, was reported to have said during a stakeholders’ workshop on Road Transport Management and Mass Transit Operations in Nigeria, organized by the Federal Ministry of Transportation in Abuja in July 2016, that ‘’one of the reasons why we have not made much improvement on power is due to a lack of coordinating mechanisms.” According to him: “very often in this country, we do not give as much focus as we should to the organic link between the objectives, our strategies, processes, procedures and our results. The Minister of power cannot boast that he will deliver 1,000 megawatts because he can actually build a gas powered turbine and not have the gas. This is because the gas is under the control of a different ministry’’. The Emir also mentioned the case of hydro power where the dams belong to the Federal Ministry of Water Resources while the sites around the dams belong to the state governments. His conclusion: ‘’we need to have some framework for coordination and harmonization for a clear division of roles and responsibilities and also for ensuring that everything is mainstreamed into one strategic objective” What could be more spot-on?

Indeed, the importance of a coordinating Ministry for the Economy has since been recognized in many developed and emerging economies. In Turkey for instance, an Economic Coordination Board was established in 2009 to strengthen coordination among ministries. The Board comprises the Deputy Prime Minister for Economic Affairs as Chairman, together with the Ministers responsible for Finance, Development, Customs and Trade, Science, Industry and Technology, Labour and Social Security while the Treasury acts as the secretariat of the Board. In South Korea, the coordination role is vested in the Minister of Economy and Finance. In 1994, the Economic Planning Board and the Ministry of Finance were merged into the Ministry of Finance and Economy (MOFE) when the government recognized the need for an integrated approach to implementing the government’s functions on economic affairs in an efficient and coherent manner.

Similarly, Italy has a Ministry of Economy and Finance which in addition to ‘conducting the tasks and responsibilities of the State in the fields of economic policy, financial policy, budgeting, and tax policies also carries out all activities related to the coordination of public spending and its oversight’. Indonesia’s Coordinating Ministry for Economic Affairs has responsibility to ‘co-ordinate, synchronize and control ministries’ responsibilities in economic affairs’. The ministry is led by a Coordinating Minister for Economic Affairs, who is the Deputy Prime Minister for Economics, Finance and Development. Ditto for Singapore where the Deputy Prime Minister is designated the Coordinating Minister for Economic and Social Policies.

While it is true that the practice of having a coordinating Minister is popular in countries running parliamentary system of government, there is evidence to suggest that it has also been embraced by countries under the Presidential system. As observed by Richard Allen et al in an IMF working paper titled ‘The Evolving Functions and Organization of Finance Ministries’,most advanced countries have developed mechanisms for coordinating policy decisions between the finance ministry and these other ministries and ensuring that the financial costs and benefits of such policies are fully appraised and approved by the finance ministry’’. He argues that ‘finance ministers have to take responsibility for, or at least a strong interest in, activities of the state across the board, since all such activities have fiscal implications of one sort or another which the finance ministry cannot afford to ignore’. What is clear from the experience of many countries is that the position of a coordinating minister is always created to address a complex policymaking environment and the need to coordinate responses to challenges involving multiple ministries- which is why the position is, in most cases, occupied by a powerful minister with the clout and experience to provide the needed push for coordinated action across government ministries, departments and agencies. A coordinating minister for the economy is also expected to have a thorough understanding of both monetary and fiscal policies and be in continuous consultations with ministers and the Governor of the central bank (without prejudice to the latter’s autonomy) on issues bordering on the economy. Former President Jonathan found these qualities in Okonjo-Iweala, who was on top of her career at the World Bank, and had no qualms appointing her the Minister of Finance and coordinating Minister for the economy. While the impact of her double portfolio may have been subdued by the sudden fall in international crude oil price sometime in 2014 which paved the way for the economic recession that followed, many believe that the economy under her grips faired relatively well especially against the backdrop of attaining the status of the biggest economy in Africa.

Therefore, contrary to the apprehension in some quarters that a coordinating minister will add another layer of bureaucracy, the role actually puts in place a problem-solving mechanism that leaves in its wake well-grounded economic policies. It also makes easier the task of supervising the economy by the Vice President who is the Chairman of the Economic team. In view of the many benefits associated with the portfolio, the President is well-advised to name a Coordinating Minister for the Economy this time around.

 

UCHE UWALEKE

Uche Uwaleke is a Professor of Capital Market and the Head of Banking & Finance department at the Nasarawa State University Keffi

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