*Says the nation, like the Catholic marriage, is indissoluble
By Wale Akinola
Mr Samuel S.O. Afemikhe, Managing Partner of .S.S Afemikhe and Co. (Chartered Accountants), pioneered the introduction of Value for Money Reviews (VFMR) in the Nigerian oil and gas industry in Nigeria and his firm was the pioneer auditor to the Extractive Industry Transparency (NEITI) in the conduct of the financial, physical and process audit of the Nigerian petroleum sector for the years 1999-2008.
Afemikhe has carried out several consultancy assessments for the World Bank, including post-procurement reviews, Baseline Indicator System (BIS) regarding the assessment of Nigeria public procurement system. He is the author of three books: The pursuit of Value for Money (2003), Budget Implementation and Value for Money – the Due Process Experience (2005) and Public Procurement Practices (2009). The renowned accountant speaks, in this interview, on his latest book, Hope Betrayed: A comprehensive analysis of Nigeria’s nationhood challenges and how to overcome them.
You are quite comfortable. Not many people of your status will be bothered about how Nigeria can be better. What actually motivated you into writing his book that is due for presentation in Abuja on November 24,2016?
Nigeria is a blessed country. It can be made a better place for all of us, our children and generations yet unborn.
On January 1, every year, we shout ‘happy new year’, and hope the year will be better but, at the end of the year, you find that the year is worse than the previous year. So, it is important to ask ourselves, why this is so? Until we are able to answer this question, there is no way we can make Nigeria a better place for all of us. So, it is like interrogating the situation and this book helps us to do that with facts and figures.
Interrogation. How? What are the problems? What are your findings?
Before one answers the question about what we found, let’s talk about how we did it. We took 10 countries, including Nigeria, that had independence at the same time and have the same ethno-religious backgrounds, with most dotted around the equator and in fact Nigeria is better placed because we have abundant natural and human resources that is well trained and dedicated. The question then arose: Where were we with these nine other countries at independence in 1960 and where are we today? And what we found was painful. I will give you two simple examples. Our capita per head in 1960 was 92.8 dollars, Singapore’s was 394.6 dollars. When we finished this project in 2015, Singapore’s capital per head was about 52,000 dollars.
Ours, even with the rebasing, was 2,500 dollars. Now, with the challenges we have, the foreign exchange down and the rest, our capita per head is about 1,100 dollars while Singapore’s has gone up to 75,000 dollars.
Can you imagine where we were together in 1960 and where Singapore is and where we are now? And in terms of natural resources, Singapore has nothing. So how did they do it and why have we kept on retrogressing? This is an issue that we have to challenge.
What is the second example?
You probably will say capita per head is an economic number, it has a lot of challenges in terms of how you measure and interpret it. But, let us look at human development index which basically tells us the level of education, the level of health, life expectancy and standard of living. We were around 0.3 with Singapore in 1960 standing at 0.4, 56 years after, we have moved up only by only 0.1 to 0.4 while Singapore has moved to 0.9. Why is this so? I will even give a third example. We are a factor-driven economy which means we rely on resources at the time of independence in 1960.
Since that time, we have not been able to move to the second level, which is Efficiency knowledge-driven, and the third level, which is technology and Innovation – driven. And if you continue to live on your elementary resources without any value added, then you are open to vagaries in prices, demand and supply swings and so on and so forth, which is what we have seen in the last couple of years when the price of crude continued to fall.
There are a lot more examples of how we retrogressed and we came out with very strong views in the book Hope Rekindled on how we can redress the situation. And we can reverse the trend because, like I always say, Nigeria is like phoenix, which never dies, and like the Catholic marriage which can wobble, fumble and stumble but cannot be dissolved.
Nigeria is indissoluble like the Catholic marriage?
Yes, even the Pope cannot dissolve a Catholic marriage.
So, people should bear in mind that Nigeria is here forever. So, let’s think seriously about how we can make it a better place for all of us.
So, how do we make Nigeria a better place?
That is what the book, Hope Rekindled, has addressed. The challenges that have befallen Nigeria are challenges all around. We can sit here till tomorrow, listing them and we will not finish. Let me just single out a few. First is, we are still grappling with structural defects. We have to address that. It is like the foundation of a house that is not strong. Some people talk about nobody loves Nigeria.
But Nigeria is well loved. It is just a few, the elite that do not love Nigeria. They take out of the system without putting back. They are the ones that engage in corruption, they are the ones that mislead the people.
Most Nigerians are patriotic, focused, determined to make Nigeria work, but if you live in a house which has structural challenges, you have to mend it. Let’s define that a little bit in terms of the foundation that has challenges. If you look at our peers at independence, they were basically parliamentary. And they are still majorly parliamentary in the system of government that they operate.
In the parliamentary system, the leaders are more accountable, more efficient and that is where you can challenge the head of government straight to his face at parliament question time. We abandoned that system. Then, if you look at the issue of the federation itself, when we had four regions, we prospered. From four regions we went to 12, then 19, 24 and now 36.
Today, 83 percent of our resources go into the running of government. In my opinion, Nigerians are not getting value for the bloated cost of governance. We appreciate that the current government is trying to roll back the trend. When you use 83 percent of your resources to run the government and pay less than two million people in a population of 180 million people, then it is very clear that we have a budget expenditure and developmental challenge. So, we must go back to the structure and see how we can make it better, cheaper and more cost effective.
The second issue that is closely related to this is the acquisition of knowledge and the application of lessons learned to continuously improve and be better. People learn better by doing but the military didn’t allow our politicians to learn. People make mistakes but you learn along the line and become better.
Many people believe we must address our problems holistically and not in a piece-meal manner. Do you share that perspective?
Yes, we must take a good look at the foundation because our problems must be viewed holistically. Our political and business leaders are the elite, they should not take one problem and think they can use it to solve the Nigerian problems. When you move away from the issue of structure, you come to the issue of economics of retrogression which was practiced for many years until we got to the time of Structural Adjustment Programme (SAP) under the Babangida administration. We started with import substitution which was not working because you cannot uproot a plant in the US and import it here. There are a lot of things that go into and with it. What it did then was that, it created a big gap between the rich (industrialists) and the poor.
The military decided to correct that and came up with controls on imports, rent, etc; which didn’t help anybody because the Adams Smith’s theory says that the system is richer when everybody goes and defends his own territory; so when you say rent control, import control, all those things don’t work and only retrogress.
So, they abandoned that and went into scapegoat economics. Under the system, all sorts of boards were raised to control imports and supply. That also didn’t work. Then they said let government control the land as a factor of production and the land use Act was born with all its distortions on land ownership and use’. Thereafter they felt the foreign investors are the problem and the indigenization decree was introduced to take over foreigners’ businesses which Nigerians didn’t know how to manage except that they were merely fronts and of course that didn’t work. You need some level of economic freedom to apply competition to grow the economy.
Then SAP came and steady growth came, the middle class began to rebuild as competition generated productivity. We should look back at all these things and see what worked and didn’t work. That is what knowledge and lessons learned mean. We should think of how to create economic freedom to allow people to use their talents to create wealth. When you have economic freedom, there is competition, economic growth generates employment, wealth is created and poverty comes down. If you don’t allow people to operate competitively, nationally and internationally, you cannot create wealth.
The world is a global village now and Nigerians must be empowered to compete globally in that village. What you do here matters to people in Ghana, Singapore, USA, Britain, etc. We have to sell what we produce to the people in these countries. But if you are not competitive, you cannot be efficient and you cannot sell what you produce even within your country.
Then you need good governance, rule of law, property rights and ease of doing business to continuously underpin your competitiveness. When the rule of law is in place and foreign investors see that things are done properly, people will be free to invest and capital will come in. The moment the issue of good governance, economic freedom, rule of law and the structure are addressed, Nigeria will fly higher economically than anybody can imagine and we would have made substantial progress.
For instance, we need elections that are free. By the way, the original title of this book was ‘Hope Betrayed’, but one of the things we canvassed very strongly in the book before the last elections was that elections should be allowed to be free and fair because you need the wisdom of the crowd to enable good leadership to emerge.
So, when the elections came and they appeared free and fair and Buhari emerged, we felt like hope is rekindled because things are beginning to happen the way they should. But, overall, our elite should begin to support government to create a pluralistic and inclusive society.
They should stop being extractive in their attitude by taking from the society without putting back. So, if we can address our challenges comprehensively, Nigeria will be a fantastic place to live in and we will bequeath a better nation to the generations coming behind. Hope Rekindled teaches us how we can do this.