By AKOMA CHINWEOKE & ONWUKA ANTHONIA
Almost five decades after independence, Nigeria, a country richly endowed with rich human and natural resources has consistently failed to take its pride of place in the global economy. According to the 2008 human capital index, the country is ranked 154 out of 177 countries.
Professor Peter Chukwuyem Egbon is a professor of economics in Delta State University, Abraka, and former deputy vice chancellor of the institution is also the first vice president of the Institute of Planning. He spoke with Sunday Vanguard Business in Lagos, on how the economy can rise to the challenge of stunted growth and development through effective policy planning and implementation. Excerpts:
WHATâ€™s your impression about the countryâ€™sÂ economy after 49 years of independence?
We are definitely not doing well given the resources we have both human and material.
No doubt the leadership of the country lacks the will power to implement her economic policies. Do you think we can ever get the economy back on track?
Well, we must be committed in what we are doing. We have been planning. We had first national development plan and if you go back to those plans, they were well written but the problem has been implementation. When we implement, we donâ€™t even monitor because it only when you monitor you will know when you are deviating from your target and then you find a way of reinforcing and coming back to track but we donâ€™t. We seem to be carried away as we always see planning as mere ritual. We forgot that budget is a one year plan. To what extent do we really do real budget in this country when at the end of the year we derive joy in returning money to the treasury when there are problems on ground to solve.
Recently, we witnessed a rumble in the countryâ€™s banking sector even when we were assured that the banks would safe and secure after the consolidation exercise, do you think the steps taken so far by the new CBN governor would ensure stability in the sector?
You see, planning is a continuous thing because it is a life project and therefore it requires further reviews. We have consolidated quite alright and it has helped us tidy over certain issues but we needed to review, to see what is going on post consolidation. I think that is what led us where we are now but whether we followed the due process in doing that is a different matter because the banks are owned as at today by the shareholders. Were they consulted? Were their rights not taken over and could we have done it the other way without necessarily causing panic? Those are the issues otherwise what has happened is what is expected in planning given that it is a life experience. Having reviewed the exercise, post consolidation, and found out that some of the operators were deviating, there was the need to bring them to order but the way we went about it, the issue is whether we followed the right path and have not caused panic that is now affecting the economy. because people are no longer having confidence in the banking sector and that would go a long way in affecting the stability of the sector. We hope that the panic/announcement measures would be reduced in the future so asÂ to avoid tension in the sector otherwise, the exercise is worth it.
At the peak of the global economic crisis, the G20 countries came together to fashion a way out of crisis, Nigeria as a country aspiring to become one of the leading world economies was not even invited as an observer at that event.
How far has Nigeriaâ€™s absence at the event affected its actualization of vision 2020?
Well, you said G20, that is meant for those who have already arrived at that level we are hoping to be there. Maybe if we had been invited to be an observer, we would know how they go about it and that may inspire us to do that. It is unfortunate but there are many reasons for that. One, people have reservations about how those crop of leaders today came about because governance has to do with accountability and transparency and if the process that threw you up is questionable, to that extent, you are not accountable to the people and if a leader is not accountable to the people, that affects governance because with good governance there is accountability and transparency. Therefore, the dividends of democracy can go down to the people but because there is no accountability we find ourselves in a situation where we seem to be generating more money but at the same time seems to beÂ poorer as a nation. That means there is a paradox because ordinarily we expect that when you have more money, poverty will reduce but we seem to be having more money and increasing poverty which means something is wrong and in the country today there are a lot of linkages.
The countryâ€™s GDP index, according to recent IMF ranking, failed short of what is expected of an economy aspiring to play in the big league. That again was a minus for Nigeria. Aside tackling the problem of bad leadership what else can be done to jumpstart the economy?
GDP can be said to be a monetary evaluation on your goods and services. So, to talk of increased production that means there must beÂ productivity and you produce in the real sector which is known for producing goods and then you have the service sector. Most often if you are to produce, you need energy for instance.
We are still having the perennial problem of energy to the extent that many industries have closed up because of the cost of procuring diesel to power their various generators. So, that is a major thing that is affecting productivity and that would always affect the countryâ€™s GDP. The economy seems to be depending solely on oil now. It has the linkage but there is no linkage. We have oil and we are making money out of it but we donâ€™t have input as we are still exporting raw oil and importing the refined products from it, so when there is no value added to your oil, you would sell cheaply and import at a higher rate. Besides, if we have refined oil here, there would be many subsidiary industries that would go into different things and then that would create more employment and when there is employment you would have increase in spending and consumption. Therefore, that would further have a multiplier effect on the economy but where you now had to sell cheaply and import costly, it affects your GDP because there is no value added. So, the GDP would continue to be low particularly when the real sectorÂ is not productive. We seem to be putting things in the service sector and that is why when the capital market crashed everything crashed because people left the whole issue of productive sector to now be going out to the financial sector. Certainly people can get more money from buying more shares but the output would not increase. I think thatâ€™s where we are.
The CBN recently launched more polymer notes for the lower denomination of the naira. Is that part of what the country needs especially at this time when available resources to revive the economy appears to be dwindling?
The apex bank seem to have been justified its action as they said in the short run it may be costly but in the long run it may be cheaper given the fact that past experience have shown thatÂ the products last longer. So, the cost of having to replace those old ones would out weigh the cost of the immediate printing. They seem to know what they are saying but they ought to have sensitized the Nigerian public before now as they seem to be doing what they would have done first in terms of letting us know why they think they had to produce more of polymer notes as against the existing paper one. So, part of the problem is communication. The Central Bank needs to increase their communication and minimize the communication gap to avoid suspicion because we need trust in the banking sector.