These are interesting times for the members of the dismal science of economics. The perfect storm in which we find ourselves is eliciting all sorts of untoward vitriolic outpourings; some anodyne, others downright venomous. The improbable topic of today’s column derives from three important contributions to the ongoing discourses on Nigeria’s economic policy. The first is from an interview by former CBN Governor Chukwuma (the professor formerly known as Charles) Soludo. The second is from Steve Johnson of the Financial Times and the third is a leader by the London-based Economist newspaper.
Chukwuma Soludo, my former boss at Nigeria’s apex bank, is no stranger to controversy. Not too long ago he took his former friend and confidante Ngozi Okonjo-Iweala to the cleaners. He stopped short of calling her a degenerate charlatan for ruining the Nigerian economy. Not to be outdone in the spilling of bad blood, Ngozi in her turn, gave as much as she received. She described Soludo as “the worst Governor in the history of the CBN”.
Some of us watched in utter bewilderment from the sidelines as these two gladiators were slugging it out in such an unseemly manner. Soludo and Ngozi are both highly gifted and accomplished people. To see them tearing each other apart in this manner caused some of us not a small amount of anguish.
Soludo had been the central mind of the famous economic team under Olusegun Obasanjo which comprised Ngozi as head and leader and the duo of El-Rufai and Nuhu Ribadu as the consummate troubleshooters. His tragedy is that he boxed himself into a corner, mesmerized by his own highly overrated genius. His ultimate tragedy is that he seemed innately incapable of managing success. Having driven away all his brethren who helped him on his way up by the sheer repugnance of his insufferable defects, his latter-day nouveux riches friends have abandoned him like a bad dream.
The other day Soludo was at it again. In a magazine interview a few weeks ago he took Goodluck Jonathan, our former President to the cleaners.
To quote him verbatim: “Imagine a scenario where a president can order the CBN to create an intervention fund for national stability and CBN literally ‘prints’ say, N3 trillion, and doles it out cash to the Presidency to prosecute an election campaign or for just about anything he fancies. It is a scary thought….We are going down a dangerous path that ruins the economy. I don’t know any other country where such is tolerated, except perhaps what I watched in a movie about Idi Amin and his governor of central bank.”
I was never at any time of my life a member of the PDP and I had no role either openly or covertly in the previous administration. As a matter of fact, I took the position then as I do now, that Goodluck Jonathan was a disastrous failure who deserved to lose the elections. This was not to say that the APC was a paragon of virtue. I pointed out several of the weaknesses of Muhammadu Buhari during his military incarnation and I warned that he would have to inoculate himself against those defects if he was to be electable. The people spoke. Buhari won the overwhelming endorsement of the great Nigerian people. He is in power, but he is not governing. Nigerians are groaning while our President is obsessed with chasing shadows.
To draw a parallel between Goodluck Jonathan and Idi Amin was, quite simply, preposterous. Idi Amin, who ruled Uganda from 1971 to 1979, was one of the bloodiest and most sanguinary despots which our benighted continent was ever to witness. As the story goes, he needed to go on a foreign trip and had approached the governor of the Bank of Uganda for dollars. Apparently, the Governor had doled out a lecture on the role of prudence in public finance instead of giving him the dosh. Incensed, General Amin cornered a petrified cleaner in the central bank premises who told him he knew where they kept the money. He was made Governor, for all his pains. True or apocryphal, some of those stories were often exaggerated by the Western press in their eagerness to paint our continent as a land of savages.
I just came back from Brussels after five memorable years working for the European Development Fund. My Personal Assistant was a granddaughter of King Kabalega of the great kingdom of Bunyoro-Kitara in Uganda. She once tearfully narrated to me how Idi Amin’s goons came and kidnapped her father from their well-appointed home in Kampala, drove him to an unknown destination in the trunk of their car and had him assassinated in cold blood.
And yet she was not prepared to engage in wholesale condemnation of everything General Amin ever did. That was surprising to me. She pointed out that some of the most important public projects that Uganda has today were originated by Idi Amin. She described him as a man of high taste who believed that nothing but the best was good enough for Uganda.
The military administration in Uganda was once gravely short of cash. Amin flew to Tripoli to solicit for funds from Colonel Gadaffi. He came back home with a bagful of millions of dollars. As the money was taken home from the presidential jet, the First Lady suggested to her husband that they could take half of the money and give the other to the Treasury. The President was so livid that he threatened to have her executed if she ever dared to touch that money. He pointed out that the money was donated to the Ugandan government and people and not to the Amin family. And so it was.
Idi Amin was, no doubt, a murderous tyrant, but he may have been innocent of some of the excesses that were attributed to him by the Western press.
Comparing our former President to Idi Amin was not a fair comparison to make whatsoever. I would imagine that Soludo understands what unconventional monetary policy from Q1 to Q4 was as practiced by the U.S. Federal Reserve. It was about printing dollars to buy assets in a bid to shore up the dollar and American public finances in age of turmoil. Many central banks resorted to those measures during those years of turbulence. Some of the so-called “intervention funds” structured by our own CBN were clearly inspired by the American example. Some of the funds probably did find their way into private pockets. This is highly regrettable, of course. But I would not from that happenstance deduce that the former President was in the same class as Uganda’s bloody dictator.
Odenigbo, please, get a life!
This brings me to the article of 23rd January by the Deputy Editor of the Financial Times of London, Steve Johnson in which dismisses the economic policies of the Buhari administration as “the height of foolishness”. In an opinion piece titled, “Why Buhari’s Economic Policies Are Foolish”, the journalist singled out 3 elements of those policies as constituting folly: resistance to devaluation of the naira by the Buhari administration; declaration of the Chinese-type circuit breaker for the stock market; and the alleged copying of Venezuela’s foreign exchange regime. In his own words, “It is hardly confidence-inspiring that Nigeria is copying a Chinese policy that is widely seen to have failed.” He also went on to declare: “Copying Venezuela’s exchange rate policy and China’s failed equity market strategy might seem the height of foolishness.”
The third article is a leader in the influential London-based Economist, which dismissed the policies of the current administration as anchored on “crude tactics”. The leader described our former President Goodluck Jonathan as “an ineffectual buffoon” and that his leaving the scene was good riddance to bad rubbish. But they also expressed profound disillusionment with the “crude tactics” of Buharinomics. They accuse him of making the mistakes of 30 years ago. Like the Bourbon kings of old, he is supposed to have learned nothing and forgotten nothing.
The Economist and the FT both belong to the Pearson stable, the most influential financial publications in the world. What they say is important. I take strong exception to the tone and diction they often deploy when they write about Nigeria and Africa. When I was a graduate student in England I had occasion to write to the Editor-in-Chief of the Economist. This was in the winter of 1989. They had written a report on the African crisis. The front page depicted a gorilla being weighed down by a dollar symbol. I was deeply incensed. How would they dare compare a whole continent and people to gorillas? I wrote a long and bitter letter to the editor. I lectured them on Hugo Grotius and Law of Nations and how the ethical norms of our enlightened century require that they treat all human beings with a minimum of dignity. I concluded by pointing out that the depiction said more about them than about the African people. Within a fortnight I had received a long letter of apology.
The Provost of Oriel College, my beloved alma mater invited me to dinner in his private lodgings. The editors had obviously contacted him as well. The late Sir Zelman Cowen, Rhodes Scholar, celebrated international jurist and former Governor-General of Australia, and later Legal Counselor to the Murdoch Group, spoke to me with his inimitable gentleness and wisdom. He told me that some Europeans are yet to fully understand Africa and we probably need not take to heart much of what they say. But I think my protest worked. For many years the Economist always wrote about Africa in a more a sensible and respectful way.
Some of the brightest people from Britain work for the Economist. If you got a First in PPE (Politics, Philosophy and Economics) you could easily get recruited to work for the newspaper. Young talents undergo several months of training after which they are loosed to set the world to rights. I am told there has been only one admonition to the writers of the Economist: “Write as if you are God!”It is therefore not altogether surprising that they often write with such condescending arrogance and judgmental superciliousness.
But it is important that we discount the chaff from the wheat. Much of the gravamen of their critique is valid. We cannot operate nineteenth century economic theory derived from a hodge-podge of neo-Marxian theory of value and mercantilist protectionism in a twenty-first century open-macroeconomy setting. We do not have a credible economic team to speak of. Much of what goes for economic policy at present is an ad hoc series of measures not based on a sound development strategy or a much thought-out economic policy framework. It is clear that we are lost in the woods this time around. I am mortified to be reminded that hell, as they say, is sometimes paved with the best intentions. The current administration needs to revisit its economic strategy before it brings us to ruin while gambling away the massive moral capital that brought it to power. Their heart is in the right place but their brain, unfortunately, is not.
Obadiah Mailafia
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