Chairman, Golden Capital Plc, Prof. Tunde Adeyemi, is a financier and business development strategist with vast experience in markets and academia. In this interview with Deputy Group Business Editor, Taofik Salako, Adeyemi, who is also President, CPTEC University, Lome; speaks on the macroeconomic environments and policy imperatives, among others.

What’s your assessment of the policy directions of government so far?

We cannot assess the policy direction of the President Bola Tinubu administration without first x-raying the previous administration’s transition policies, at best the inherited situation aside the unabated security challenges.

 When you look at the recent past, decline in the government revenue and uncontrolled increase in expenditure was one of the legacies inherited by this administration – fiscal deficit was in excess of N25 trillion in less than eight years. We had seen continuous and escalated budget deficit, especially with the recent inherited 2023 approved budget deficit expected to be in the range of N11.84 trillion, an escalation from initial N6.38 trillion.

  We had uncontrolled domestic and foreign debts by the government with escalating debt services provisions; with  debt proposed in the 2023 budget of N6.31 trillion. In 2022, Nigeria’s debt service-to-revenue ratio was at 80.6 per cent, a figure far above World Bank’s suggested 22.5 per cent for low-income countries like Nigeria. Also, The International Monetary Fund (IMF) had said Nigeria may spend almost 100 per cent of its revenue on debt servicing by 2026.

Then, you come to the area of infrastructure deficit. Nigeria needs an investment of $3 trillion over the next 30 years to close its public infrastructure deficit gap; and at the modest about $1 trillion in the medium term, between seven and 10 years. We had a situation where huge subsidy on premium motor spirit (PMS) of nearly N6 trillion yearly while inflation rate was hovering around 22 per cent. So, when you look at where the new government took off from, you will appreciate the immediate efforts being made by the government.

In just a little above three months, it is obvious that the policy direction of the Tinubu administration is a bold step to address the systemic challenges and disequilibrium situation in the Nigerian economies, which the four previous administrations failed to address or did not have the guts to stamp out. The new government’s economic redirection won’t be easy in the short to medium terms, say between three to seven years, but that’s the right direction, which had been clearly identified over the last two decades by majority of the analysts. No matter the initial difficulties, Nigeria must forge ahead on the new direction if the country will survive and take its place in the comity of nations.

Specifically, how do you see key policy changes?

As I said earlier, the actions of the new administration within the last three months showed a bold, though difficult decisions and directions.  The removal of the subsidies on the PMS that has plagued the nation for over four decades will free the government expenditure of this unrealistic and unsustainable expenditure. While looking for various ways to cushion the effect on the short run, the planned domestication of petrol refining will have multiple positive effects on the commodity price and the overall economy.

Also, the abolition of multiple foreign exchange (forex) rate policy and gradual elimination of the fraudulent arbitrage that has distorted the country monetary policies direction over time was a major step, it takes someone with the courage and strong political will to do what’s right to take that step. The introduction of the ‘FX price verification system portal’, if well managed, will save the nation from the rent seekers in the forex market.The efforts being made on increasing the country’s revenue generation and food security are also commendable. When you combine subsidy removal with abolition of multiple forex rates and food security, what you will see is a pivotal tripod likely to boost the economic situation overtime.

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Beyond the immediate policies earlier mentioned, what are those critical areas that you think will play decisive roles in the nation’s growth?

The recently inaugurated ministers’portfolios showed the directions of the administration. The focus tended towards five economic areas, namely revenue growth and optimal expenditure management, infrastructure, effective justice system, food supply and food security and tapping optimally into the potential from the blue economy, solid minerals mining, transportation, creative industry and digital economy, among others.

I must say that key attention should be towards the provision of a stable economic environment that is conducive to fostering strong and sustainable growth, on which the creation of jobs, wealth and improved living standards depend on. In line with the recent development from this administration, I will suggest a short- and medium-term approach or macroeconomic policies that deploy fiscal policies and monetary policies to unlock and optimise revenue generation, utilisation and management. This is key to achieving and maintaining the dream $1 trillion  economy

There is a need to develop new areas of revenue generation. For several decades, Nigeria has not explored over 90 per cent of the available revenue-generating areas, with so much efforts on oil that was also not 10 per cent exploited. This calls for highly experience, domestic revenue generators to exploit these areas.

The government should retool its revenue-generating mechanism that had failed to record optimal revenue, given what’s being collected and remitted. I believe, though, that the new Fiscal and Tax Reform Committee, recently inaugurated to redirect the revenue collection and explore some strategic revenue areas, if given support, can go a long way to answer the revenue challenge for the country.

Nigeria can rise above the projected revenue of about N10 trillion yearly to about 10 multiples of this figure. One of the ways to do this is by reducing revenue leakages and pilferages with adequate and effective mechanism and laws to create deterrence for perpetrators, couple with tracing of some of the loss revenue back to the coffer of the government.

We can also look in the direction of domestication of home-grown policies and efforts on creation of employment, thereby reducing the unemployment rate considerably. The Asians development plan in the last three decades can be customised to align with the country’s economic policies.These domestication and alignment can help to stimulate industrialisation, take better advantage of the population and the regional Sub-Saharan population and markets as well as enhance effective human capital and innovation management, with full government supports.

What about expenditure side of the national accounts?

Yes, definitely, you need a balance of initiatives across revenue generation to spending. Government spending is one of the key areas previous administration had not been frugal, they seemed to lack effective expenditure management at all levels. This administration needs to create a different government expenditure and spending mechanism, including a dedicated office to manage this important area within the policies framework of the administration. The administration needs a ‘Government Expenditure Managers’ within the Ministry of Finance that can develop models to achieve its expenditure objectives that will lead to reducing the huge and protracted infrastructure deficit through modern and standard public works, among others.

Can you explain further the harmonisation of fiscal and monetary policies, without undermining the independence of the CBN?

This administration needs to look at this important area outside the CBN and create a more focused and developmental monetary policy architecture that will support the economy of the country. Over the years, this area had been managed by people that lacked understanding of necessary policies for harmonious growth and as such, the policies embarked upon had been contrary to the long-term economic interest, thereby creating a huge problem of disintegrated fiscal and monetary policies.This had continued for over four decades. Some of the areas of changes will include financial markets operation and regulations, effective money supply and interest rate management and developmental financial markets, among others.

Though recent action by this administration in this area also showed the understanding of this administration on one of the great distortions in the country macroeconomic variables, which was the fraudulent and ineffective management of the foreign exchange policy in the last three decades; a situation that had thrown the country into a disequilibrium case and played into the hands of local and foreign rent-seekers that took advantage off the rates to mess up the exchange rate and in turn affected every other variables in the economy.

To consolidate the forex reforms, it is important for this administration to develop an effective market based foreign exchange policy platforms for the harmonisation and monitoring of the exchange rate, couple with both direct and indirect inflows. We also need an open and global platform of foreign exchange markets in the areas of forex outflows with appropriate tracing mechanism with partner nations, as being done by other nations of the world to manage their forex process.The time has also come for an effective international trade desk for the nation. It is sad that what we have is only international reporting desk and not ‘international trade management desk’ with expertise to manage the trades between nations and developing state of the art models to position the nation international trades as a jewel in the international market among other objectives.

On the basis of the trajectory, where do you see the economy in the medium term?

As I said earlier, it is still young to assess this administration and its awaited complete policies documents. But if some of the above recommendations are embraced, among other ideas and economic models, we should see an astronomic development within the next three to seven years. The truth is that we do not need any foreign expertise or consultants to remodel the economy, we have the human capital here and the developmental plans and policies can be done with everyone participation and reorientation, then we are there.

Rising food inflation is a source of concern to many, including the government and other stakeholders in the country. Chief Executive, AFEX Commodities Exchange, Ayodeji Balogun, in this interview with DANIEL ESSIET, says he is convinced that in addressing food inflation, several options like promoting technology, and investments are needed to revamp the agric sector as well as ensuring the availability of affordable food for Nigerians.

The country is experiencing food inflation. From the trends leading to this, do you think food inflation has peaked or is there more to come?

Inflation is a yearly price adjustment. It tells what the price was this year versus what it was last year. And so inflation can be higher this year and lower next year or vice-versa. But, if we are able to keep the prices the same next year, then inflation will drop.

As an indicator of itself, it doesn’t necessarily mean that the price of food will reduce to the point that it is affordable and accessible to an average Nigerian. But ultimately, as a country, we have to seek for affordability of food. So, today, food is about 80 per cent of household spend. This means that an average Nigerian does not have enough for any other thing besides food and transport. This is a critical problem, because how they pay for education, healthcare will become a challenge. How do they build shelter, and meet other needs? If you look at our food production, per capita is declining. So, even though we are increasing the food we are producing, the growth of the population is faster than the food increase.

To control and manage the shortage, you look at prices. Prices were relatively low at the farm gates up until March, April, May. Now we are starting to see some increased prices. Maize was about N230,000 in the North, up until May. Today, it is between N280,000 and N290, 000 per metric tonne.  And, then, if you look at that, add transport cost to get to the market in Lagos and Ibadan, you see this increase of up to 25 per cent on the food prices. Some of the causes of food inflation are those like transportation factored into it, and because of the additional pressure of fuel prices, food inflation will continue to go up.

What can the government do to bring food inflation under control?

Nigeria uses 1.5 million metric tonnes of fertiliser to feed 220 million people. Ethiopia, which is a significantly smaller country, uses 1.2 million metric tonnes of fertiliser to feed about 80 million people. Kenya uses over a million metric tonnes to feed about 40 to 45 million people. Our level of intensive agriculture is too low for the population that we have. So, we need to create a strategy that allows us to produce more food, increase the yields on the farm, and the productivity of the farmers. And, then, when you have more supply, prices will crash. Even if you look at prices, maize in Nigeria is at selling at N300,000 per metric tonne. If you convert that to dollars, that’s about $400. Maize in the international market is below $200; indeed about $190. Our food prices are expensive, even within the country. We know that there is a ban on importation of maize. That means we have to buy what we produce. And what we produce is not enough to feed us. If you also look at rice, there has been significant progress in production, the quality is there. There have been a lot of investments in rice mills that are set to run. However, the  feedstock of paddy rice to feed those mills have not increased significantly. Since COVID-19, when we had a lock down at the borders, paddy rice have stopped coming from neighbouring countries to Nigeria. We have seen a significant increase yearly on the cost of paddy.

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Paddy rice is about N370, 000 per metric tonne at the farm gate level, which invariably gets the finished product closer to N40, 000 per bag of 50 kg rice. And you can still get an imported bag from Thailand into the country and neighboring countries at N25, 000 and N28, 000. So you see that our cost of food is higher than the international markets. And the only way to correct this is wholesome intervention in the productivity of farmers across the country.

What would you say are the  key strengths and weaknesses of Nigeria’s agri-food industry?

First is that we take on rice, for instance. Now if you take a look at local premium rice, the quality is  even better than the imported  one from Thailand; so the quality of our rice has been a lot better, unlike in the past when you had stones in it. I don’t think anybody has ever bought Nigerian rice and found stones in it. That’s one improvement, the technology is available. People understand the business. And we have a number of rice mills that are operating world-class machinery. The equipment is there. And that’s one value chain that has witnessed significant progress. We are seeing some very good progress in the feed milling sector, even though the poultry farmers are losing money, lots of poultry farms are shutting down.

But the feed milling sector has seen in a number of consolidation. A lot of new investments coming into the poultry sector- those are some of the strengths of the sector. Ultimately, the biggest thing that I think, you know, if you look at this decade is the influx of youths in agriculture.

Young educated people are coming with modern approaches to farming.You’re seeing a lot of hydroponics, vegetative cultivation, greenhouses, and urban farming. And these are high value products. Somebody who has one room can put it to intensive technology farming. He can produce enough cucumbers and vegetables that you can get from one acre of land- just one room. And, then, he can produce in multiple cycles year round. Those innovations are things that we are seeing, and are very promising. We are seeing a lot of science and technology, convergence of technology and agriculture. A lot of software engineering, hardware engineering, we are seeing some of those things where they have not hit scale, where they can affect aggregate output. A lot of them are still small pots that are connecting, but the chain growth is really impressive and encouraging.

What is likely to affect the future of agriculture? Where do you think the government should really focus on apart from rice and agric technology?

 The biggest power of Nigeria, as well as Africa economies, are the people. This is the first time, after a very long time, almost two to three decades that we are having educated young people who are choosing agriculture as a profession.

The question is, how can the government intervene to maximise their potential and change the way farming is done unlike how it was done 60 years ago. How can we create dedicated intervention schemes? Before building any additional policy, it is absolutely a must that farmers have a digital identity, which tracks and ties them to their unique farm assets. And this has to be an identity that is built on the Nigerian identity management system.They take NIN and upgrade it into a digital agriculture identity. India has the same system that is used to administer millions of its farmers. About 120 million farmers are under the Indian identity management system for agriculture. Look at any intervention that the government does. There’s a big challenge with the Anchor Borrower Programme and a few other interventions. We cannot even track who the beneficiaries are or what the output is; how many crops did they produce. What is its impact on food security? How much did the farmer sell, and whom did they sell the commodities to? That’s one of the very extremely important part that the government must do.The second that the government must do is the emphasis on commodities exchanges. When you look at the entire production system, and the approach of the previous administration in the last three to four years has been focused on the supply side. How can we help the farmer produce more? There’s been very little focus on the demand. Most of our interventions have not been market led. What do we see from the tabulation of the campaign and the acceptance speech of a president is a dedicated macro approach to drive agriculture. What commodities exchange  do everywhere in the world, based on the understanding of what the food processing industry, international buyers markets and the capital provider needs, is to bring the players  together and use their requirements to galvanise production.The farmer doesn’t worry about who is giving him a loan. He doesn’t worry about who is going to sell it. He doesn’t worry  where he is going to store his grains. He  is just a member of an exchange. An exchange provides these services as a bundle.

How does AFEX galvanise farmers, especially in achieving modern technology in farming?

That is what AFEX has been building in the last 10 years. We are extremely proud that the administration has approved this approach to look at development of the agricultural sector, and the broader food systems. And this is going to be extremely critical. We see it as a brilliant solution. We, as AFEX, are extremely positioned and happy to support this. We are galvanising our technology, knowledge in a way that can help the government achieve the mission, though this is policy strategy.

What are the merits of the regional commodities exchange and the marketing boards’ formula?

Let me clarify again that the direction of the government is to run regional commodities exchange. Specialised regional commodities exchanges that meet the farming requirements of the regions where they operate and, then, drive productivity of farmers, ensure quality of grains are kept  sacrosanct and connect the farmers to the market.The exchanges will drive export out of the country. Every commodities exchange connects to export windows of the Federal Government. The produce exported would be traded, so the government will have what is actually coming in. What we have is a situation where exporters undervalue their invoice. This enables them to repatriate   only a portion of what they actually earn from the export market.

While the government is driving the regional commodities exchange approach, people refer to the success of the marketing boards’ formula in Ghana. What are the merits of the two systems? People identify the lack of warehousing receipt system in our present agro commodities exchange framework compared to countries in East Africa.  Which one is pragmatic considering our peculiar economic challenges?

For some time, the Cabotage Vessel Financing Fund (CVFF) has been a subject of debate in the maritime sector. Though ship owners are yet to access the fund, estimated at about $355 million, the Director-General, Nigerian Maritime Administration and Safety Agency (NIMASA), Bashir Jamoh, says the agency and other stakeholders are working round the bottleneck that has stalled the disbursement of the fund. However, Jamoh insists that intending beneficiaries of the fund must deposit their equity contribution of 15 per cent before accessing the fund as provided for in the law. Jamoh, in this interview with OLUWAKEMI DAUDA, also highlights some of the steps taken by the agency in the last three years to boost maritime security, staff welfare and other sundry issues affecting the sector.

Recently, Nigeria was removed from the International Bargaining Forum (IBF) unsafe water list. How was this achieved?

This is a confirmation of the improved global ratings of security in the nation’s maritime domain as a result of sustained collaborative efforts of NIMASA and the Nigerian Navy. The removal is a landmark achievement under the Administration of President Muhammadu Buhari. This achievement is a product of a well-structured multimodal policy, which has been implemented over the years to fight piracy and other criminalities in Nigerian waters. The legal instrument called SPOMO Act signed into law by President Buhari in 2019, the full implementation of the Deep Blue Project by NIMASA, expanded assets and capacity of the Nigerian Navy, enhanced cooperation between NIMASA and the Nigerian Navy and the regional collaborative efforts under the umbrella of SHADE Gulf of Guinea midwifed by NIMASA, are policies of the current administration and the benefits are gradually coming to fruition. We are focused on, ultimately, improving and reducing the cost of commercial shipping in the country. That is our goal.

What is your take on harnessing regional maritime potential?

It has become very pertinent for African countries to continue to collaborate and strengthen their relationships; helping one another in their areas of need, for us to harness the vast opportunities we have to the best of our abilities. The Gulf of Guinea is one area that is most needed as encouraged by the International Maritime Organisation (IMO). Evidence in the past have shown that when nations and organisations work together, each bringing in their vast areas of strength, they tend to develop faster and grow their economies better.

Which step are you taking on submarine regulation considering its huge implication on navigation?

NIMASA is actually developing the guidelines to regulate submarine cable operators in line with the provisions of the United Nations Convention on the Law of the Sea (UNCLOS), which we have ratified and NIMASA is the agency of government responsible for its implementation. We do not just implement laws, we consult. Where the responsibility of an agency stops, that is where the responsibilities of another agency start. Collaboration is a key component of ease of doing business in the best interest of the country and we will work with the Nigerian Communications Commission (NCC) to achieve this.

How will you say NIMASA has fared in  assisting shipping development? What have you done so far in this regard?

This was the COVID-19 era and we had to be proactive. The first thing we did was to see how we could comfort the seafarers because at that time, they were in different locations in the world. And it happened that when they arrive at their destination, they will experience a number of restrictions. First of all, they will not have to leave their ships and come on shores. Therefore, we tried to declare them as essential workers. We issued marine notice; we were one of the first five countries to do that. After that, we looked at the issue of validation of their certifications. Some of them, their certificates were about to expire and if they expire, you cannot go to shore and renew your certifications. On that level, we have some challenges. We have to issue marine notice which automatically validated their certifications. In those areas and many more, marine notices were introduced to comfort the seafarers, including the issue of crew transfer. If you come to Nigeria and you want to leave Nigeria, it is either you fly out or you do crew change. We issued marine notice for crew change, we allowed them to bring the crew and change them. So, all this one give us a lot of recognition by the international community. This is where we started.  From there, we began to look at the maritime industry itself. What are the low-hanging fruits that can make the stakeholders more comfortable. There is no country that is developed and you will check the history of that country that they  don’t give recognition to their maritime sector. If you recognise maritime sector, certainly, there are certain efforts you have to make so that you can ensure you support that industry in line with your coast. The first thing we did was the issue of incentives.

Internationally, incentives are given to stakeholders, so that it will give them a kind of level-playing ground with other countries. But in Nigeria, we have seen incentives given to so many sectors; the road transport sector,   air transport sector, the agriculture, especially during the COVID-19. The President announced number of incentives, but the maritime industry was left behind. We accessed the situation and we developed our own papers and we sent it to the Federal Ministry of Finance and then to Central Bank of Nigeria for two incentives: fiscal incentive and monetary incentive.The fiscal incentive is for those who have money to import ships; we secured incentive for them to pay zero duty on new vessels that they are bringing into the country.

What have you done on fleet expansion?

We have been saving money for the Cabotage Vessel Financial Fund (CVFF) since the enactment of the Cabotage  Act in 2003. But till today, we are unable to disburse those funds. We took that issue head on to ensure that we disbursed those funds. The then Minister of Transportation (Rotimi Amaechi) did his best to ensure that we disbursed the funds. But, unfortunately, there were some bottlenecks. When the approval came, we were unable to get it to move the money from the Treasury Single Account (TSA) to the commercial banks as stipulated by the Act and the guidelines of the Primary Lending Institutions due to the contribution they will have to make. So, we were unable to achieve that. But when the current minister came, we revisited the issue and we looked at those areas that hindered us to disburse the fund, we addressed it and went back to the President and the President granted us the approval. Now, we are almost in the last lap of disbursing the funds.

There seemed to have been a disagreement between NIMASA and ship owners over the actual amount of the CVFF? How much is the money?

We don’t have any disagreement. But we have heard that the ship owners mentioning different amounts. If you Google it, the second time we officially declared the balance of money in that account of CVFF was during the  regime of Engineer Mu’ azu Jaji Sambo.

All along, I remember that when Patrick Akpobolokemi was the Director-General of  NIMASA, the issue of balances was raised. And if you Google it, you will see his answers between $100 million and $190 million. That was what he was announcing at that time. That was around 2013 to 2015. So, if you look at the backlog between 2004 and 2015, and then from 2015 till date, you will agree with me that it was an illusion. How can somebody that doesn’t keep money, somebody who doesn’t have custody of money, tell you the amount that is in your pocket? We know the balances in the accounts. But we don’t have any disagreement with them. When Engineer Mu’azu Sambo came, he did not ask us to give him the balance, he gave us in writing, saying, “I want to have the bank statement of the Cabotage Vessel Financing Fund ” and we provided the bank statement. I think as at that time, we provided the bank statement of about $350 something million.  I know that between that time and now, the amount of the balance is about $355 million. I am not in a position now to give you the precise balance of the naira component. But the bulk amount of money is in dollar.  I think it is about 95 per cent of the CVFF, is coming in dollars. And the balance as at today is about $355 million. So there’s no disagreement whatsoever.

How many ship owners do we have in the country? How many are ‘portfolio’ shipowners? What are they going to use as collateral to access the CVFF loan?

As far as definition of a ship owner is concerned, he is somebody that buys, operates and owns a ship but as you said, some of them don’t have a ship because of economic reasons. Some of them lost their investment on ships, some sold their ships due to hardship or lack of cargo but once they own a ship, they are into either Nigeria Indigenous Ships Owners Association (NISA) or Nigeria Ship Owners Association. So, once they enter into those association by virtue of the ownership, even if they leave the ownership, they pose themselves as ship owners; so, that is one aspect of it. We don’t want to complicate matters. I am not in a position to tell you what is going to happen, but we don’t want to complicate matters by giving a lot of difficulties to access this particular fund. NIMASA is giving 50 per cent of the total cost and the PLIs are giving 35 per cent, the beneficiaries are giving 15 per cent. The intention is collateral, so you don’t have to go and bring one extra ship as your collateral. The new ship we are going to buy is the collateral which you are going to pay 15 per cent and the monies they are giving to the PLIs and the NIMASA is there so that is the control. If you fail, we will seize the ship.

But, they have been complaining they don’t have the 15% equity?

Well, it is not necessary for those who do not have the 15 per cent them to get the loan. The criteria stipulate that you have to pay 15 per cent. If you want to meet the criteria go and get the 15 per cent.  We want to see your commitment. If you don’t have 15 per cent, it means you are not ready to operate as a cabotage operator. We want to see your commitment. Out of 100 we say you will give only 15 per cent- what is 15 per cent?  I am not in the position to just take money and give you free of charge. If you know you have your investment there, you will hold my investment very well. So, is it by force that you must take the loan? If you don’t have 15 per cent, you go to where there is no 15 per cent to get loan. This requirement is not manufactured by DG NIMASA; it was enacted by the National Assembly and that is what the law says. If you don’t have it, another person has it.  So, the person that has it, let him go forward am not arguing, am not forcing anybody to go and have 15 per cent.  There are so many windows where you can get the loan. Before now, banks and other financial institution do grant loan for ship financing. But in as much as it is the CVFF you are after, that is the guideline. If you don’t have, leave it. Another person will have it. We had meeting with the PLI’s, we had meeting with the stakeholders. In all the meetings we had, I have never heard anybody telling me that he doesn’t have 15 percent. It is you that is just telling me that they don’t have the 15 per cent.

How many of them have brought the 15% equity?

I assure you they will bring it. They are bringing it. I have seen the 15 per cent already. I have the guarantee of eight companies.

Three years on as the Director-General of NIMASA, how has it been?

Well, we thank God. So far, we have been steering or anchoring the ship to a kind of safety level. But you know, in life there is nothing you do without a challenge.The maritime industry has been facing a lot of challenges and NIMASA is one of the agencies that align with the responsibility via its own mandate to see how such challenges can be addressed.

The biggest challenge we had when I assumed office had to do with maritime security. To the extent that hardly there was a week without a negative report; there were persistent attacks on vessels in our own territorial waters. But, today, it has become history, because, at least, for over one and a half years, we haven’t had anything to do with attacks. You can see that the industry  is moving ahead when it comes to the issue of safety, especially safety of navigation.

Today, when you look at it, we have the issue of wreck removals, we have done up to 40 per cent of wrecks removal within our territorial waters.