Why It Is Worth Listening To Bola Ahmed Tinubu On Sovereign Economics

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Wednesday, April 10, 2019   / 08:56PM / By Tope Kolade Fasua*


The article was titled “DOES BOLA TINUBU EVER LISTEN TO HIMSELF?”

 

Or I should title this; “Why Does APC Never Listen to Bola Tinubu (BAT)?”  Well, there is surely something that the followers of Bola Ahmed Tinubu see in him, which some of us don’t. What we see more often is the bad news, the purported greed and alleged ownership of half of Lagos, and so on. But some years back, I was quite touched by the advice that BAT gave to the Jonathan government around the subject of a recessing economy, that I wrote an article on this page titled “Revisiting Tinubu-nomics” (published on the 15th of October 2015), and made efforts to meet the man. Through his then Chief of Staff, Mr Sunday Dare, I did meet Tinubu at Lagos House at Asokoro, Abuja, for a fleeting minute. Then politics started for me late in 2016 and we have waged our own counter gambit to what BAT and his camp has to offer. We failed to make a dent perhaps, but we tried. Nothing could have stopped us from trying.

 

Just as I was amazed by the kind of advice that Tinubu gave the Jonathan government and urged him in 2015 to ensure he got the Buhari government to adopt some of those ideas, again he has made some profound new statements at his 2019 colloquium which I believe need amplification. However, and unfortunately too, Tinubu has not succeeded to influence the economic path of this current Buhari administration. It is also doubtful if he will influence the coming one. And this is cause for concern.  I will do a recap of the statements that capture my imagination from past Tinubu statements and also the recent one. I wonder if it is these statements that attract people to BAT. But I also see contradictions. Is Bola Ahmed Tinubu who his statements say he is? Or deep at heart he is one person and outwardly another - some sort of bipolar personality? ……for his statements show that this man aligns with the right approaches that can truly help Nigeria.  However what we hear is that he has pocketed Lagos and his companies probably vanish with half of all taxes collected by Lagos State Government. Or does he see himself as some modern-day Robin Hood, taking massively from the state through pseudo-official capers and spending on the hoi-polloi close to him?  Also could we say the ideologies that he espouses rubs off on those closest to him - chiefly those he has put in government at one level or the other?

 

Four years ago when I commented on his article, some friends asked if I thought he wrote the article himself. Truly, for someone with so many people milling around him, I doubt if he could find time to write. My recent foray into politics slowed down my writing. But in the recent colloquium, Bola Tinubu spoke extensively extempore, and didn’t miss a beat regarding his economic ideology. Now I believe these ideas are truly his.  My appeal for now is for him to know that as someone very influential in our national politics and who has enthroned a number of governors, he cannot continue to light lamps and stick them under bushels. The lives of 200million people and more, and our collective future, depend on people like him who have figured out how to capture power in this society. Especially since his views are so different, riveting and refreshing, a lot hangs on this man’s frail shoulders. Like they say on the streets, ‘if you know, you know’. Only truly discerning people will understand the power of Tinubu’s economic proposals.

 

Let’s go.

 

In November 2014, Bola Tinubu wrote to Okonjo Iwealla and Jonathan;

           

“… Nigeria is mired in a long-term, secular depression. Forget the rosy GDP numbers. They signify a great economic and financial segregation between those who have and others who have not. If we continue with the policy preferences of the current administration, the haves shall become the “have–mores” and the “have-nots” shall become the “have even less…. The vast majority of the claimed GDP growth has fallen into the laps of those already enjoying obvious luxury. The rest of the people are left to gaze at the enormity of the income and wealth chasm separating them from the cabal orchestrating the discordant political economy. While a small group flourishes, the rest of the nation subsidises their economic bounty. A tight confederacy rides an economic skyrocket while the bulk of the people languish in the swamp. For one group, the economy is effervescent. For the other, it is catatonic. Nigeria is one nation with two economies.”

 

It is more than evident that the Buhari government which he has helped - twice - to install has not heeded his advice, so one is forced to wonder why he is offering these opinions when even his own people (APC) couldn’t care less. The Buhari government could claim to have benefited poor people through its tradermoni and school feeding program, which are marginally praiseworthy, but the government has also continued along the lines of targeting GDP growth, doing nothing about inequality (under this government Nigeria became the most unequal country in the world - according to OXFAM), and of course, much earlier in this administration we saw increases in fuel price, devaluation of the Naira by half and we have tanked on foreign and local debts. I could even bet that electricity bills have been increased surreptitiously by DISCOs by at least 100%!  These policies are in direct opposition to the ideas of Bola Tinubu yet he has not spoken against their emergence.

 

Hear some more facts from BAT (2014):

 

“…the nation’s economic engineers should focus primarily on allocating value and opportunity to our under-utilised labour force and our idle, yet potentially productive capital in a way that promotes wealth creation and expansion of aggregate demand. It is this sustainment of aggregate demand that empowers the nation to rescue itself from the whirlpool of economic contraction… In the face of recessionary headwinds, government should run countercyclical fiscal policy by using its Naira sovereignty to fund fiscal deficits. The deficit is not simply for the sake of running a deficit; the funds cannot be spent on nonproductive matters. It must be used to fuel infrastructural and other projects that not only employ great numbers of people but enhance the overall productivity of the economy… Inflation is the major risk of running budget deficits to spur growth. We can contain inflation to acceptable levels by ensuring additional government expenditures are for items that can be supplied domestically, particularly labour. Naira paid to poor and working class people mostly circulates in the domestic economy, spurring additional local commerce and production…This is because their consumption patterns do not approach the level of import expenditures associated with their wealthier compatriots. Related to this, we must decrease our level of superfluous imports.”

 

Very few commentators in our milieu speak on such hard facts as these. Tinubu is the only one I know who has dared to broach the issue of Naira sovereignty.  Most of the ‘revered’ economic intellectuals in this space would never dare.  Their brains are probably Americanized to the Dollar.  Let me explain. For some reason, our yearly national budgets is based on the price of crude oil and how much dollars we intend to get therefrom. The only revenue assumption on our yearly budget is crude oil. This means our thinking is externalized. Those who run our governments feel helpless and dependent on foreigners to solve our problems.  But sovereign countries should never depend on the availability of other people’s currencies in order to plan their lives. It should NEVER be said that Nigeria cannot pay the salaries of government workers just because there is no dollar to convert to Naira. The stability of our economy should not be so tightly linked with the price of crude oil. Nobody has engaged Tinubu on this statement. They just behave like he didn’t say it. I would want to hear opposing positions.  The liberalists who hold our economy by the jugular have been trained never to think of any other possibilities but that which is included in the texts that their masters dictate. We may not print the Naira into perpetuity, but we cannot be locked into a single option of ‘dollar-standard’, says Tinubu.  And I agree.

 

The 2019 COLLOQUIUM

 

The reason why I am writing to Tinubu again is borne out of his recent statements at his yearly colloquium. Again Bola Tinubu came out blazing. I am not patronizing the man. But in the desert of pro-people ideology that is Nigeria, and in a sea of regurgitated, regressive, and inhumane policies that we elevate to the level of mantra here, where those we have trusted with governance have continually betrayed us, I do have no apologies amplifying someone who sounds different even if he was the devil incarnate. I am also trying to tie this with the man’s influence among a number of highflying administrators that we cannot ignore. No matter how much anyone hates Tinubu, perhaps we can ask them to consider that even a dead clock is correct twice everyday. I think we should begin to understand that no man is completely bad, or good.

 

So Tinubu addressed the issue of impending VAT increase and taxation in general. These are excerpts from his speech titled “Work for the people that the people may work for themselves” on the 28th of March, 2019:

 

"….Consumer spending is slipping and this is where I will stop and appeal to Professor Yemi Osinbajo and his team to put a huge question mark on any increase of VAT please. If we reduce the purchasing power of the people, we can further slow down the economy. Let's widen the tax net… Those who are not paying now, even if it is inclusive of Bola Tinubu, let the net get bigger and take more taxes and that is what we must do in the country instead of additional layer in taxes… We must recognize these harsh economic tidings (a predicted one-coming global recession and financial crisis) as advance warnings to the wise. Hence we must think deeper and work harder for our people in Nigeria… This dominant train of thought has made the people servants to the dictates of abstract economic theories. In a more effective system, the economy would be fashioned to serve the concrete needs and legitimate aspirations of the people… Our economy must be redefined to be an efficient yet moral social construct with the primary goal of optimizing the long-term welfare of the people through the sustained, productive and full employment of labour, land, capital and natural resources… To pull the nation from poverty, government must play a decisive role. It must at times direct and even develop markets and opportunities. This is nothing novel. I am only restating what the established economies did when they were young and assumed their trajectories toward growth… Our pursuit of the Next Level cannot be achieved by blindly following the (current) economic path (position) of other nations. That would be tantamount to racing to live in a building just as its long-term occupants were frantically rushing out, screaming that the edifice was mean and crumbling.   If we are smart, we dare not enter”.

 

Whereas I now believe that Nigeria’s VAT rate is unnecessarily low and that indeed, given the inability of the present day government to move decisively and fundamentally rethink our finance, we have little choice but to increase VAT, I commend Tinubu’s steadfastness in pushing pro-people ideas at the centre. In truth, an increase in VAT will certainly lead to price rise across the board in Nigeria. Nigeria suffers the risk of inflation from four quarters presently; from tax increases which will be passed on to final consumers, from marginal decreases in interest rates, from increases in tariffs in electricity and other utilities, from impending wage increases, and even from a likely currency devaluation as we are being pushed in that direction by the likes of the IMF and World Bank.  With a weak balance sheet riddled with debts at almost 70% of our revenue, we really have little say in the matter, and further Naira devaluation could come much earlier than expected.

 

There are other critical nuggets in this simple statement above.

 

Tinubu said government should widen the tax net to include people like him. He has simply confessed to not paying his due taxes. Can the people in government, including his man Mr Fowler, take a cue, do the needful and legitimately approach our many billionaires for our dues? What more are they waiting for? Until they are brave enough to do something about income inequality, in a way that spurs productivity among the majority, we shall only be moving around in circles.  Labour productivity is the key. Human resources is our undisputed most-important resource. Osinbajo and Buhari unfortunately seem stuck with the infrastructure approach without being able to link the infrastructure (much needed) with the needed emergency in our human capital area. For example, the Minister for Power is building 9 power plants for 9 universities in Nigeria so that they may have uninterrupted power supply, but none of the students or their lecturers are involved in the projects. So nothing learnt.

 

I would want Bola Tinubu to do us all a big favor and move away from these taunting, tantalizing and brain-wracking sweet statements to sitting on the governments he helped put in place to ensure the prevailing thinking changes and they do the needful. In the meantime, I can only say; RESPECT. And thanks Jagaban. We need more of these.

 

 

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For the Records - Investing in People: Jobs and the Economy

 

Bola Tinubu Colloquium and Productive National Discourse

Investing in People: A More Accurate Perspective - By Bola Tinubu


It is indeed a high moment when the President alters his schedule to participate in this event. I am humbled and honored by your presence today, Mr. President.

 

May the collective dream of progressive governance and positive reform in Nigeria never fade and always be the vision that guides us.

 

Despite the hurdles and difficulties that come, let this noble effort become our national reality for the sake of those amongst us most in need, for the sake of the present generation and for the sake of generations yet to come.

 

I wish to also thank your Vice President whose dedication and ability so well serve you and your administration. Without him and his team of organizers, this event would not have been possible.

 

I thank Governor Ambode for hosting us so graciously for the true character of Lagos is generosity of spirit as well as the spirit of excellence.

 

My greetings to everyone in this hall and outside of it as well.

 

I beg that you forgive my abruptness with usual protocol. I do so not to slight anyone. If you must blame anything for my abruptness, please direct your blame at the advancing hour (of the day).

 

The speakers have been thoughtful and inspiring. There is not much I can add; but the nature of the day compels that I offer some thoughts regarding the subject at hand.

 

I shall labor to meet this obligation in as short a time as possible.

 

The topic “Investing in People” is timely, given both the current arc of our national political and economic evolution and given the recent discussion of this topic generated by a famous philanthropist who recently visited our shores.

 

How we invest today determines the quality of our tomorrow. We start from the realization that our resources are as scarce and finite as they are valuable.

 

Thus, we dare not waste them for they are almost always inadequate and never in surplus when measured against all the beneficial things we desire to do for our society.

 

In short, waste is the mother of want and misuse the father of lack.

 

Mis-investment comes with steep opportunity costs. The misapplication of one naira means one naira less for a more appropriate investment. In a way, this represents a double loss.

 

Here I shall depart from the mainstream approach that draws a line between capital investment and what many people now call human capital investment.

 

We now speak of the two as if they were conflicting opposites, inherently at odds with each other.

 

This is not a wise road to travel. Instead, we must think of them as points along the same continuum. Instead of being opposites, they are in fact similar and complementary, the one to the other.

 

Human capital investment connotes expenditures that improve the inner capacity or wellbeing of a person or populace. Things such as education and health care come quickly to mind.

 

Traditional capital investment connotes expenditure on instrumentalities external to a person that improves his ability to further improve his productivity or lifestyle. These are things like roads and power.

 

In between, lie things like potable water which has clear human capital as well as traditional capital investment dividends.

 

In my mind, both forms of investment are related; both ultimately benefit the people. No right-minded government builds a road but forbids travelers its usage. Better roads lessen accidents, reduce travel time and cut costs of business and goods.

 

Electric power is not generated merely for its own sake but so people can work more efficiently and live in greater comfort.

 

It allows students to read into the night, learning more and learning better; it permits hospitals to utilize equipment and procedures that can save thousands of lives otherwise lost.

 

It allow factories to hum 24-hours a day, producing jobs and goods that increase the wealth and welfare of a people.

 

Thus, investing in roads is more an investment in the people who use them than an investment in the gravel and tar that comprise the paved way.

 

Investment in power is at its essence more an investment in the people who will rely on it to improve their activities and efforts than it is merely an investment in turbines and other physical equipment.

 

This is like the chicken and egg question. When asked which one comes first, the only reasonable response is to say that “the one produces the other.”

 

Thus, our task is not to draw an artificial boundary between the two types of investment.

 

Our task must be to re-integrate these two components into a coherent plan where finite resources are allocated in ways that respond to present urgencies yet also answer the burning question of how to best achieve durable economic growth for all segments of society.

 

It would be the height of cruelty to tell a man dying of thirst that he must wait until we build him a perfect well before we can give him all the water he will ever want.

 

He needs but a cup to drink. But he needs it here and now. Waiting is not a viable option. Thus, we must hurry the cup unto him.

 

Only once that is done, do we work on constructing a well so that he may never again fall prey to such a danger.

 

It is at this point that we must draw a different conceptual distinction than the one normally drawn between physical capital and human capital investment.

 

I posit that we profit more by drawing a conceptual distinction between the type of social investment that helps us manage or mitigate poverty as compared to that investment which leads to economic growth that reduces if not eliminates poverty at its very root.

 

Poverty mitigating investment may soften the harshest blows of penury but such investment offers no great escape from it.

 

For example, every human being has a right to health care. Giving such care is a moral duty of any compassionate government. Yet, however healthy that person may become as a result, this does not mean his economic situation will necessarily improve because of better health.

 

The same goes for education. We already have many intelligent graduates whose abilities did not meet a job because there simply were no jobs to meet.

 

Over the decades, we have built legions of people who are well educated but not for this economy and this job market.

We must remember that education is not an abstraction. While education is a virtue in itself, it also must have practical utility or else it will become a discredited, even detested thing.

 

A key purpose of education is to provide a person the skills required to earn a living within the context of a given economic environment. There is no pressing need to teach a desert nomad to scuba dive or to instruct a fisherman in the Delta the intricacies of hunting a polar bear or riding a camel.

 

Education must be wedded to the economy that now exists as well as to the economy that shall be in the foreseeable future.

 

The able-bodied Africans who braved the harsh desert crossing of the Sahara only to further brave the death waters of the Mediterranean Sea do so not in search for better healthcare or even education for the most part.

 

They do so in search of meaningful work, the money, as well as the sense of independent existence and self-worth that such work can bring.

 

This is the compelling force.

 

Thus, any responsible government and society must heavily invest in those things that promise economic prosperity and employment. This is the primary challenge government must meet.

 

While government cannot ignore investments that lessen the grimmest effects of poverty, we also must face the hard fact that a nation cannot truly defeat poverty without generating broadly-shared economic growth through prudent investment in infrastructure, industrial development, and agricultural modernization.

 

My life has been dedicated to the proposition that Nigeria can grow and overcome poverty, not just live with a less brutal version of poverty.

 

After 66 years, I am not about to change my walk or change my talk at this point.

 

There is something we must examine more closely. The chorus of Western-appointed experts sings that we must target certain levels of expenditure on various programs to reach sustainable growth.

 

Few people dare question the veracity of this claim, the soundness of this song. However, the question of cause and effect casts a long shadow over the entire procession.

 

Is it true that sustaining certain levels of expenditures will bring economic development?

Or is the deeper, more fundamental truth that economic development will generate heightened levels of social expenditure?

 

Economic history points to the latter explanation as the most viable road to durable national improvement.

 

We must define our path to development correctly if we are to have any chance of following that path faithfully.

 

Yes, our society must invest sufficiently in lessening the most brutal aspects of poverty. We cannot allow people to be broken by poverty unattended.

 

However, the great escape from poverty comes not by making poverty more livable. Our escape comes by burying poverty under an edifice of wealth creation and equitable distribution of said wealth.

 

This is only done by economic growth. This is how England, America and China did it.

 

As these nations represent the past, present and immediate future of economic greatness, we should learn more from what they did for themselves than from what they say we should do.

 

Here, I offer a few suggestions that may help blunt the effects of poverty while ensuring sustained growth to increase our national standard of living. We must:

  1. Stimulate the economy by investment in new generation technology and its resultant infrastructure. This must be at the heart of our national infrastructure planning. 

 

  1. Encourage private sector investment in labor intensive industries by reducing barriers to entry in these sectors and by helping such enterprises to be cost competitive. This must be the core of our national industrial plan. 

 

  1. Continue massive investment in agricultural output and move to establish commodity boards and commodity exchanges so that farmers will be assured of a livable income. Farm mortgages should be more accessible to give farmers a pathway to credit to procure better equipment and inputs.

 

  1. Help the elderly. We must continue to improve the pension system. This will reduce poverty among the elderly while generating additional economic activity through enhanced consumer demand. Moreover, this is the moral thing to do. 

 

  1. Reform the mortgage system to facilitate credit expansion in a manner that allows the real estate sector to become a key driver of overall economic growth and that opens the door to affordable housing throughout the land. 

 

  1. Extend school feeding programs into all states. 

 

  1. Promote judicial reform to insulate jurists and the legal system from corruption. Providing attractive salaries and allowances will make jurists less susceptible to the corrupt temptations and illicit requests that distort the cause of justice.

 

  1. Create a blue ribbon panel that identify ways to eliminate all forms of wrongful discrimination in our land. Every Nigerian must be seen as a full and complete Nigerian in whatever part of the nation he may go, no matter what part of the nation from which he came.

 

 

Our task is to define ourselves. That means we must think for ourselves.

 

We are a populous, richly endowed nation. The growth of neighboring countries depends on ours. We hold a responsibility greater than ourselves.

 

We must act with care. Prudence suggests that we learn our most profound lessons from those nations that have already climbed the highest rungs of the global economic ladder.

 

As such, this requires that we reject the artificial difference between human capital and normal capital investment.

All investment, if used constructively, benefits the people and thus can be called human capital investment.

 

As such, the term human capital investment really tells us nothing of value when it comes to defining the correct path to optimal growth.

 

To forge that path, we must strike the correct balance between investment that mitigates or temporarily relieves the worst of poverty and that type of investment that sparks long-term economic growth that will divorce the poor from poverty.

 

For our goal is not to endure a less biting poverty. Our goal is to enter into an era of robust prosperity.

 

This, my friends, my brothers and sisters, my compatriots is the only way I know for our nation to invest in its people so that they may become what God intended them to be.

 

Being written speech delivered by Asiwaju Bola Tinubu at the 10th Bola Ahmed Tinubu Colloquium in Lagos on March 29, 2018.

 

 

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About the Author

Tope Kolade Fasua is a Nigerian businessman, economist and writer. He is the founder and CEO of Global Analytics Consulting Limited, an international consulting firm with its headquarters in Abuja, Nigeria. He was the 2019 presidential candidate of the Abundant Nigeria Renewal Party (ANRP), which he founded. He can be contacted via e-mail at ceo@global-analytics.co.uk

 

 

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