Prince Anthony Olatujoye, a lawyer and former Director, Legal Services Department, Central Bank of Nigeria (CBN), is a banking and financial law expert. In this interview with reporters in Lagos, he talks about the current economic recession, the proposed $30 billion loan, the demand of workers for wage increase, the fight against corruption and other challenges facing the Muhammadu Buhari administration. Deputy Political Editor RAYMOND MORDI was there.
How can the Federal Government mitigate the effects recession on the populace?
No doubt, the economy is in recession and to revive it, government needs to employ fiscal and monetary policies that are capable of expanding the country’s productive capabilities and curb the effects of inflation. For instance, there is need for government to pump money into the economy, so that more people can be gainfully employed. Reflating the economy can be achieved through foreign borrowing; which the government intends to do, by getting the Senate to approve a loan of $29.9 billion, to be injected into building infrastructure and funding of budget deficit.
Besides, the Bank of Industry (BOI) and the Bank of Agriculture (BOA) must provide loans to members of the public and manufacturing industries, to help boost the business environment. Again, the CBN’s Anchor Borrowers’ Programme (ABP), the bank’s intervention programme in pursuance of its developmental functions, is another platform for farmers to access loans at simple interest rate.
It is imperative for the Federal Government to provide more infrastructures and upgrade the existing ones. This will enable small and medium enterprises (SMEs) to access the market easily and provide the needed products and services for the economy. Infrastructures such as electricity, roads, airports, water systems etc. are the foundations of modern economies. A combination of all these have a huge multiplier effect and can assist in attracting foreign direct investment (FDI) and diaspora funds into the economy.
How would you assess the Federal Government’s efforts so far to revive the economy?
The current efforts of the government, particularly with respect to power and electricity generation, especially with the Minister of Power, Works and Housing, Mr. Babatunde Fashola (SAN) going round the country to ensure that distribution companies provide adequate services, is highly commendable. The recent encouragement of synergy between the Federal Government and the private sector, to revamp the economy is a step in the right direction. Also, the collaboration by the government’s economic team, headed by the Vice President, Prof. Yemi Osibajo (SAN), and members of the private sector, in formulating policies and strategies for revamping the economy is encouraging. Not to mention the efforts of the Minister of Agriculture, Chief Audu Ogbeh, who is passionately putting all efforts to revamp the agriculture value -chain.
What is your view on the proposed $30b loan the government wants to take?
I have no objection to this, because borrowing is a means of reflating the economy. This is because the funds required for boosting the economy is usually obtainable externally, where there is a dearth of domestic fund and this will help the government to tackle the effects of the recession. It is a step in the right direction, because the economy will be reflated with such fund, since the usual sources of budget funding for the government i.e. income from the non-oil sector and funds from the oil sector, are inadequate. Another factor is the ill-effects of pipeline vandalisation in the Southsouth, which has adversely affected government revenue, hence the necessity to look outwards for the needed funds.
Buhari has been accused of concentrating too much on the fight against corruption, thereby neglecting other sectors…
I do not share that belief. We should all remember that corruption has become a big problem to this nation and it appears that the Buhari administration is determined to take the bull by the horn; that’s why it appears as if too much attention is being paid to the fight against corruption. Government has been trying in other areas; especially in the war against insurgents. This government should be commended for the near decimation of Boko Haram. The current peace initiatives in the Niger Delta also deserve commendation. What steps should be taken to attract foreign investment?
Guaranteeing peace and stability is a condition precedent to attracting foreign investors into Nigeria. Infrastructural development embedded in increased public and private partnerships (PPPs) is sine-qua-non for a virile business environment. The laws relating to investment e.g. the Companies and Allied Matters Act, the Investment and Securities Act, e.tc, should not be too stringent on investors. For instance, steps towards incorporation of companies should be made more convenient, through the use of information technology.
Also, the various levels of government should look into the issue of double taxation, in respect of investments and businesses in Nigeria, with a view to discouraging same. The role of the judiciary in speedily resolving investment dispute cannot be over emphasized. Also, more incentives for investment should also be given to foreigners, though not to the detriment of the local industries, so as not to stifle competition.
Access to foreign exchange should be eased off, to attract foreign investors. There should be a uniform exchange rate for oreign exchange both at the banks, the bureau de change and even the parallel markets. It is noteworthy that the Minister of Finance, Mrs Kemi Adeosun, is currently pushing for a single exchange rate. The CBN should also be encouraged to lower its Monetary Policy Rates (MPR) to encourage borrowings by foreign and local investors.
What’s your assessment of the attitude of public office holders to public office?
The ordinary view of the average Nigerian is that public officers are fantastically corrupt, lazy and unwilling to work. But, I dare say that this public perception is grossly incorrect, because a large number of these officers are some of the finest men and women in the public service. I nonetheless wish to advise that public officers should represent the public interest, take their jobs seriously and should respect the rule of law in the discharge of their statutory duties.
How can government resolve the issue of unpaid salaries of workers?
Revamping the economy can be done by giving a level of autonomy to states to tap the resources which ordinarily are located in their areas. This is a kind of fiscal autonomy and economic restructuring which would drastically improve their internally generated revenue annually. For the oil-producing states, allocations may be increased and for the non-oil producing states, more opportunities should be given to them to exploit the resources in their areas so as to get sufficient fund to pay salaries and develop infrastructure.
Is the current demand for wage increase realistic, in view of the recession?
Why not? Recently South Africa, though in recession increased workers minimum wage, to alleviate the effects of inflation. Wage increase will motivate the work force to be more productive and I don’t believe that recession is enough reason for government not to increase workers wages. In my view, workers can demand an increase in wages, even now; given that the prices of virtually every product in the market have skyrocketed.
Clamour for diversification of the economy is fast gaining momentum. How can this be achieved?
Yes, it is the right step! When we consider that over a trillion naira is spent annually on the importation of rice alone and the drastically reduced returns from oil sales, which is the bulk of Nigeria’s revenue, it becomes necessary to encourage Nigerians to go into agriculture, largely by accessing loans with reasonable interest rates from government agencies. Also, with more Nigerians going into farming, mining etc, the country can have a wider scope of generating revenue.
