Former Secretary to the Government of the Federation during the Babangida military administration and national chairman of Social Democratic Party (SDP), Chief Olu Falae, speaks with HAKEEM GBADAMOSI, on the state of the nation and solution to the current agitations across the country. Excerpts:
THE economy is wobbling and the survival of the common man is difficult. Inflation is on the high side. What’s the way out of this?
The inflation is substantially imported inflation. It is not arising because we have employed everybody and earned so much money like we have in the time of Udoji, when people got arrears and were buying things. That’s not what we are having. That type of inflation is called demand pull inflation, where everybody has money and go to market demanding fewer goods. But that’s not what we are having now. What we have now is called cost push inflation, because it is the cost of producing things that’s high. Not the cost really but the foreign exchange cost. The price and cost of production have gone up because we have been importing things and dollar-naira exchange rate has gone up.
So, to put an end to this requires short-term and long-term measures. The short term is for you to earn more foreign exchange or reduce government spending and allow producers to have access to foreign exchange so as to minimise the imported inflation. But the long term solution is for this country to, for God sake, remove obstacles in the path of growth and development, notably power. If you ask me one thing I would do to get the economy of Nigeria moving, it is to solve power problem. Power is common to anything and everything. In fact, in the economy literature, we take amount of power consume per head as a very reliable index of development. Any society that consumes a lot of power per head is a developed economy, if you look at other parameters. As long as we cannot solve the power problem, we will wrestle and wrestle with these problems. In my opinion, perhaps the most important single factor responsible for our under development and recession is what I call instability of regimes and programmes.
The federal and state governments cannot pay salaries, yet the NLC wants increment,. So which way out? And yet the National Assembly has increased size of the budget. We will be forced to go back to the report of the 2014 National Conference. It is going to be the most earth-shaking thing that happened to the country since independence, if the report is implemented. It is going to usher in a new era politically and economically. Like we recommended in the report, the energy and power policy states that in the next 10 years, we should be getting the bulk of our power from solar energy. We have exposure to sun 24 hours and 360 days of the year. Some parts of Europe, where the weather is winter in most part of the year, still use solar energy. We have no business pursuing coal and petrol. So, it is a whole package. It is by implementing such a fundamental and comprehensive package for both political and economic and social measures that we can get this society moving.
That’s the truth of the matter. We are in trouble. Our legislators cannot tell you how much they are earning and yet they can’t pay salaries of civil servants and I don’t think any civil servant earns a quarter of what a senator earns. We carry on and at some point something will happen. But it appears nobody is really ready to bell the cat. To bell the cat is to implement the report where every state will pay what it can afford. That was the way it was when [Chief Obafemi] Awolowo paid minimum wage of five shillings in the Western Region, but in the East they paid three shillings and six pence, while they paid three shillings in the North. But it is now that we are saying everybody must do the same thing. That is not a federation. When Awolowo wanted to start the minimum wage, they said it was impossible. But he did it and also introduced free education. He did it because he had the power under the constitution and had the leverage within the economy to generate the income and move in accordance with his own priority and at his own preferred pace. But that is not anymore. We are all in bondage.
There has been a disagreement between the executive and the legislature over the passing of budget. What do you think is responsible for this?
There are accepted practices in presidential politics. Like we have in USA, the senators and the representatives lobby seriously for their people. But what they do is negotiation. If they just sit down and start to add things to the budget, the president will just veto it. So, they have to negotiate and lobby on behalf of their constituencies. That is the kind of dialogue or negotiation that should take place. It is crude to say because we are legislators, we decided to put something else in the budget. If they put it, the president will not sign it. So, they must negotiate. At the national conference, we decided that the budget must be sent to National Assembly by the end of August and they are given three months to work on it, negotiate and by the end of November, the budget should be in its final form to be signed by the president and to be launched on the first day of the New Year. Implementation is also to start on 1st of January.
When I was Secretary to the Federal Government, I remember that every year, the government announced new customs duties, because a lot of goods might have arrived at the sea ports when the new duties have not been gazetted, though such might already have been announced in the budget. The gazette must be in the hands of custom officers in the long room in Apapa before they could start implementing the new tariffs. People will have the opportunity to use their discretion because there is no new tariff yet. As Secretary to the Federal Government, by the grace of God, we ensured that the tariff gazette was ready before 31st December and as the president announced the budget on the 31st of December. The following day, a new tariff went to the customs.
What I mean is that it is possible for the federal budget to commence at the 1st of January if they follow the time table which we agreed on at the confab. Government spending is more than 50 per cent of income of the country. I mean federal, state and local governments. All the money they spend is more than 50 per cent of the money in circulation. So, when government spends money, money circulates and employment is generated. Businesses and prosperity are created. But when government fails to implement the budget, you hold up the economy of the country. Money that would have been spent from January up till now, we will not achieve the same objective at all if we spend it between June and December. There is what we call velocity of money. There’s an optimum speed at which money circulates and if it is faster than that, it generates mammoth inflation. So, that the budget is not implemented by June is a horrible disaster. There’s nothing to justify it. I don’t know whether they understand the implications of what they are doing or if they know that millions of people are suffering because this budget is not being implemented, contractors are not being paid, obligations are not being honoured and they are tinkering with the lives of Nigerians.
Do you support partial or total deregulation of the oil sector as being canvassed by some people?
My position has always been this. Government should not be an oil dealer. Oil is not more important than food and the government does not sell food and is not regulating the price of food. Why then regulate price of oil? That’s the question I have always been asking since I was in service. All that we need, in my view, is to put the proper infrastructure in place and the regulatory environment. Now with regards to domestic refineries, there should be a regulation that domestic refineries should buy their crude oil from Nigeria’s oil industry and refine it here and sell it here. But the price they should pay for the crude should not be the price of international crude oil in New York. That is my disagreement. They usually tell us that oil is an international product, so the price is an international price. I believe oil is an endowment given to us by God to be used to fuel our development. Other nations have their own endowments. For example, the Japanese are very great savers and their savings ratio with the proportion of their ration, they don’t spend about 30 or 40 per cent. This is the highest in the world. That is why capital is surplus in Japan. If you want to borrow money from Japan, it’s one or two per cent interest rate and this is because of their natural endowment. They generate a lot of capital to develop their economy. They don’t say because money is being borrowed in New York at 10 per cent, they must also give out loan at the same rate.
So, that’s the only point I disagree with all the others. Those who are producing crude oil here pay tax to Nigerian government. So, I am saying they should sell crude oil to the Nigerian refineries at the domestic cost at which they are producing oil, plus their reasonable profit margin. That price should be lower than the international price of oil. This is logical. So, there must be a Nigeria price which covers the cost of the producer, which compensates an enterprise and capitalism and gives them a decent profit. The truth of the matter is this: the oil industry is an industry of rent. In economics, rent occurs when you earn an income which you don’t really deserve and which you rarely work for. It just happens just because you are holding certain things to get this special income over and above what is due to you. The rent occurs because of the volatile nature of oil, because the life of man depends on it, especially during the winter. If there’s no oil for heating, people will die. So, they can’t afford it and they must maintain a huge of reserves so that throughout the winter nobody dies. It is so important that people are ready to pay almost anything for survival. Deregulate the oil industry, but ensure that Nigerian refineries buy crude from Nigerian crude producers at a price that will cover their cost.
What do you make of the current heated debates over the unity and survival of the country?
The recent noise we are hearing is a symptom that the basic problem of Nigeria is rearing its ugly head again. Nigerians like to pretend that things are okay when they are not. The fundamental problem is that of an unjust, distorted federation which has been manipulated to favour one section against the other. There is no way such an unjust arrangement can endure or generate peace and stability. It is not possible. In 2014, after a lot deferring and hesitation, the former President Goodluck Jonathan finally convened the 2014 National Conference, there were various predictions that it would achieve nothing or that it would break up in confusion and that there would be riot or that there would be fight. But none of the above happened. It was as if God himself started to have a hand in the affairs of Nigeria. I was made the leader of the Yoruba delegation and in that capacity, I can say with all humility that I was at the very core of what happened at the conference. Maybe that was the first time Nigerians recognised that changing the constitution was the most effective strategy in returning peace and stability to Nigeria. All the delegates at the conference cooperated at getting all the resolutions passed without a single division of voting. It is important, because, in our history, we have never succeeded in coming to so many conclusions that constitute a package on the basis of consensus. What that means to me is that Nigerians recognise that if we want to live together as a country, there must be give and take; that nobody can say that he must take everything and the other people take nothing. That was how we agreed. Over 600 resolutions were taken. They said there had been conferences in the past. But did any of these passed 600 resolutions by consensus? Which one did? The one held in London or Ibadan? It was the most glorious meeting and decision Nigeria has ever had by my account.
Are you justifying the hate speeches?
No, I am laying a foundation that this is the best we have ever done. Let anybody talk nonsense if he can point to another one comparable to this. So, having done that, there should be no room for all that is happening now, either for anybody, be it Arewa that said they’re expelling the Igbo from Nigeria or some components in Igbo land saying they’re going away. We are all committed through our leaders and delegates to this package of survival. I said it at a time that whether anybody likes it or not, that report will prove to be the future of Nigeria, that when Nigeria gets to breaking point, somebody will remember that there is a consensus document signed by all of us that can save this country. We do not need to start re-debating issues that took us several weeks to debate. With all humility, I don’t think we can have a group that is better educated, more intelligent, more experienced, more committed, more patriotic than the group we had at the conference of retired judges, generals and so on.
In my view, the answer to all that is going on now is the immediate implementation of the report of the conference. It is a major report in our history. The main thrust is that we have gone astray; we have wandered away from the straight path. We have abandoned the political covenant which we negotiated and obtained from the British before independence by our leaders who went to London not once or twice to hammer out a constitution which they all felt comfortable with. That constitution gave the regions considerable autonomy so that you can be yourself in Yorubaland or Igboland without inconveniencing anyone in the North or anywhere, while remaining a Nigerian. In that constitution, the regional government had an Ambassador in London in addition to the Nigerian Ambassador. That was how loose the thing was, how free we were.
But when [General Sani] Abacha came, they threw all these away and the military invented its own contraption which threw away all the balances in the original constitution. We can’t have what’s going on now because Abacha and co gave us a constitution that was patently biased against the southern part. In the North, they created local governments in a most unfair way. Every fair- minded person knows that Lagos population is bigger than that of any other state in Nigeria. But today, Lagos has only 20 local government areas, but Kano has 44. They created Jigawa out of Kano and the total councils in the two states grew but Lagos still has 20. When they are sharing revenue, they first share it equally. Lagos gets 20 while old Kano gets 71. Is that fair? Everything other thing is like that. That is cheating. It is unfair. There can be no happiness, stability if somebody used his position to put in place a constitution that would be permanently unfair to the rest of Nigerians. You cannot agree to be a slave in your own country. The other day, they were appointing people into the federal agencies [DSS recruitment] they took 40 something from the whole of the South-West and 50 something from Katsina alone. Is this a country or is that the way the country should treat us? This cannot stand.
But the answer is not for Arewa to expel the Igbo or the Igbo to say they are walking away. The answer is: let us implement this rescue document. The Fulani herdsmen issue is addressed in the report. 80-90 per cent of our problems will be resolved if we implement this document. Anybody who thinks that Nigeria can stay the way it is either a fool or an enemy of Nigeria. I don’t think it’s possible or desirable to seek to keep Nigeria the way it is. At the same time, I think it’s undesirable or unnecessary for anybody to contemplate secession. What is desirable and feasible or what should happen is the implementation of the report of the 2014 conference. We must go back to that covenant we negotiated with and obtained from the British at independence. It was the throwing away of that covenant that has caused permanent instability.
Why is it difficult for government to implement this report?
It’s the government that can answer that. But let’s be charitable to say that the ruling government is a conservative and a conservative government does not what change. A conservative is someone who by nature or experience tries to avoid change because he is comfortable with where he is now and if change comes, he is not sure what will happen to him. In your comfort zone, that’s on a personal level. But on the political level, a conservative won’t want to rock the boat. So, you can say that this government is conservative, because it does not want change. If there are changes, they are not too sure what will happen to their interests or whatever that’s the most charitable construction you can proffer. You can also say from the ethnic or geopolitical point of view that if you feel that your part of Nigeria has a good deal in the present arrangement, the question is: why do you want a change, if everything is to your advantage? You will be a foolish man to allow anybody to come and change the arrangement, particularly when you are not sure that it will be better than the present. These are kinds of conjectures one can make.
What about Northern leaders who are now backing out?
Mention the names of any of those leaders who signed the report and are now saying they made a mistake. Of course, there would always be dissenters. There were leaders in the North and West who opposed the conference. In any case, if there is anybody now backing out, has that removed their signature? The logic of the situation and the demand of the people will overwhelm their resistance. I am not a prophet, Nigeria has no choice, if it wants to survive, but to implement the report of the 2014 National Conference. The alternative will be chaos, inferior and be unpatriotic.
What’s your midterm assessment on anti-corruption crusade of the present administration? Is it working?
Fighting corruption is a very worthy policy. Some two years ago, when I was launching the SDP as a party, I made a speech with the title that Nigeria must kill corruption so that corruption does not kill Nigeria. Later I heard President [Muhammadu] Buhari using the expression after over a year that I have used it. As a former public officer, the way they are setting out to fight corruption is not the way to go about it. It was the same way [Olusegun] Obasanjo set out about it. He was running after his perceived political opponents. He was selective and people wondered why some members of the government who were alleged to have committed some corrupt practices were left out of the war. Is it fair, sincere or designed to punish one side and leave others to go? I think a good idea of the corruption war is that it has been poorly implemented. But I have no doubt that the various reforms and changes would compel the corrupt people to be expunged from the system, to reduce the level of corruption. There is corruption in all society, but here it has become endemic and part of the system, even among public officers. You can walk to any ministry and to do things free of charge is not possible. What we need is a holistic reform and the contained in the confab report and not the change that mouthed by APC during their campaign.
There are rumours of the possible merger of PDP and SDP and other parties. Can you confirm this?
I cannot confirm it, but we are always talking among ourselves. We have friends across the places, but if their ambition is for all Nigerians to join our party, including the APC, even President Buhari who is an old friend, they are welcome to SDP. It is the original party for all of us. At least, there will be discipline which is what is missing in the country. The main problem in Nigeria is that there is no discipline. Everybody is a big man. People can’t be disciplined because they are governors. So, the governors put the party in their pockets and substitute service to the people with personal interest. If there is discipline, there will be integrity and fairness.
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