Akpan Hogan Ekpo (PhD.), is a Professor of Economics and Public Policy at the University of Uyo, Akwa Ibom State, and also the Chairman of Foundation for Economic Research and Training (FERT), Lagos. In this interview, the erudite Professor says there was nothing to cheer until the country gets its economy right.
According to Economic historians, the difference between Nigeria’s and China’s independence (1960 and 1949) is a mere 11 years, but economy-wise, it appears they are 100 years apart. Why have we continued to get it wrong in this country?
It is futile to compare Nigeria with China. China, led by Chairman Mao installed a people’s revolutionary government with a socialist ideology. Even when adjustment is made, it is done within the socialist ideology with human beings first before profit. Nigeria is profit first before human beings. Nigeria has been experimenting variants of capitalist development and it has not and will not work in terms of taking millions out of poverty. It would create a few elites over-time while millions would wallow in poverty. China through its strategic planning has been able to move 700 million out of poverty. It runs a system where if the market works it allows it, if not it does not force it. China has its own challenges like any other economy, but the commitment of the leadership to raise the standard of living of its citizens in unquestionable. Take for example, the issue of corruption, China has the death penalty, and this has reduced corruption to the barest minimum. For me, ideology matters. It provides a guide as to how an economy should be managed. China runs a market socialist economy and thus the outcomes would be different from Nigeria’s where primitive capitalist accumulation is at its highest level.
In the 1980s, Nigeria introduced a dual exchange rate system (tier one and tier two), which was later merged into the Foreign Exchange Market (FEM). Now it operates a multiple exchange rates system. Is this the key to economic survival? How long do you think this economic discrimination would subsist?
An economy should not base her progress on an exchange rate regime. Generally, the exchange rate is determined by macroeconomic fundamentals and the key is production. If an economy is productive and diversified the value of its currency would find its level. For Nigeria, the structure of the economy is mainly consumption-driven and crude oil remains the major export. The economy is not industrialized. The price of crude oil, as well as the quantity is outside the control of the domestic economy. Therefore, because we must trade with the rest of the world and the Naira is not a convertible currency, it becomes difficult to allow the market to determine its value vis-à-vis other currencies. Therefore, the intervention of the CBN is in order. We cannot run away from a managed float exchange rate regime. The CBN has created one or two windows based on the reality on ground and not theory.
The business of designing and executing economic policies is better left with technocrats (economists, etc) but in Nigeria it is often left in the hands of politicians. Do you think the government has got it right with the new economic team?
The Economic Advisory Council is a step in the right direction. But the team is only advisory. I know most if not all the members. They are competent but each member may have his/her own perception of reality. Normally, a government should implement its party manifesto/programmes promised the citizens during the campaign exercise. The APC from my reading of its manifesto is a social democratic party, hence the government should run the economy along that ideology with some fine-tuning when the need arises. Whether the APC is doing so is an empirical matter. I have always argued that to manage an economy is not a tea party. You commit serious policy mistakes you send millions to their untimely graves.
After 59 years of political independence, is there anything to celebrate with regard to Nigeria’s economy? When would Nigeria attain economic independence?
If one must be honest, there is really nothing to celebrate. After 59 years of independence, millions of Nigerians still lack the necessities of life. The school system is generally in disarray at all levels, the quality of health delivery is poor, and unemployment rate is at its highest ever. Millions do not have running water, shelter is a problem, poverty incidence keeps rising etc. The economy is still heavily import-dependent and crude oil remains its main export. There have been challenges over the years but the ‘efforts’ by all governments since independence to fix the economy have yielded very marginal results. When we had military dictators, they were not benevolent but interested in looting the treasury; even their civilian counterparts are not better. There has been state capture by an elite class only interested in themselves and their families. On October 1st, 1960, the country attained political independence with the hope that economic independence would follow. But that was not the case. When we abandoned the earlier development plans, the building of a modern economy became a big challenge. Economic independence would come when we are committed to building a people-oriented economy based on the implementation of a well thought out development plans. In the last 59 years, we have been developing underdevelopment. We should be tired of being an economy of potentials. The economy is still neo-colonial. But as human beings, we must hope for a better future.