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To save economy, Nigeria should stop borrowing to fund recurrent expenditure – DR AKIN OGUNBIYI

The Chairman, Mutual Benefits Assurance Plc, Dr. Akin Ogunbiyi, in this interview with ONYEDIKA AGBEDO, says that allowing states to control resources within their domains will pave the way for economic growth.

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He also cautions the Federal Government against borrowing to fund recurrent expenditure, saying borrowing must be attached to well-priced projects that should be able to pay back their costs. Ogunbiyi also points to the way out of incessant strike by university lecturers and the problem of brain drain in the health sector, among other issues.

Nigeria’s inflation rate rose for many months but has been declining in recent months, according to the latest figures from the National Bureau of Statistics (NBS). Do you think the NBS figures reflect the market prices?

When COVID-19 came, economic activities were not the way they used to be. But now, we are having a bit of stability and I think that is impacting positively on economic development and inflation rate. What was published by the NBS is close to reality when you look at how economic activities in the country have improved. It is not just government spending that is making the impact. When you look at individuals and various companies, you will see that economic activities have actually picked up and that will definitely impact the economy. Look at real estate, trade and commerce, even major towns and cities in Nigeria, economic activities have picked up, except in the North where we have insecurity issues.

Can you expatiate on how insecurity is affecting the business environment because today, many Nigerians who require travelling to do their businesses are scared of going by road because of insecurity, and travelling by air has become quite expensive?

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I’m happy with the aviation industry each time I travel and see the activities at the airport, and the response index with the level of traffic; it is phenomenal. The airlines are buying new aircraft. It is not that they are too comfortable, but they are managing themselves and they are responding. Why will people abandon the roads and go for aircraft? It is at a great inconvenience, I must say. What is the cost of a flight from Lagos to Abuja? It is so high. But can you blame them? Insecurity in this country has affected trade and commerce. Customs agents even disturb the few people travelling by road with their goods. Customs are to secure the borders. But today, if the goods have passed the borders and somebody is travelling within with the goods, he has to pass through several checkpoints by Customs, and for every point, he has to drop something.

This will only add to the cost of the goods, apart from the insecurity on the roads. And in fact, you have to organise your security if you are going by road. Thank God for the Information Technology (IT); services can be rendered online now. But no matter what, some services have to be done physically. Aside from the security challenge, we don’t have good roads.

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Nigeria is spending a substantial part of its revenue on debt servicing and is still borrowing. How sustainable is Nigeria’s mounting debt?

Let the government do an analysis of the debt profile and tell us what they used each debt they have taken for? The National Assembly will not ask questions. There is nothing wrong with taking debt. America borrows but it is still the wealthiest country in the world. They are taking debt to satisfy their needs. If you are going to borrow money, attach it to a particular project. Let the project have its life, cash flow, and the project will payback. If it is a social project like education and health, let us see exactly what you used the money for.

I don’t subscribe to Nigeria taking any further credit because they take this money to satisfy the few. How can you be taking debt to satisfy your recurrent expenditure; is that how it is done? How sustainable is that? It is unfortunate that you pass debts to other governments after you. I will say Nigeria should stop borrowing to fund recurrent expenditure. The costs of projects awarded in this country most times are inflated.

If you are borrowing money, give it to people that will deliver the projects, but do not overload the cost of the projects. How many billions have they spent? They are too complacent; nobody asks questions. And when our youths rose up, they killed them. I just pray that in the next elections, Nigerians should vote rightly. How can you sell your conscience because of money?

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The youths have the power to change the leadership in this country. Let them come together and form a party. They have the population. I am challenging our youths to rise up. We don’t have another country. Our country is one that we should be proud of. I am challenging the youths; don’t just go and protest. There are better ways to do it. The general election will hold in 2023; they can organise themselves now. Let them register online now. There will be sanctity in the unity of Nigeria; we should not compromise it. We can do it better.

Many states have very low Internally Generated Revenue (IGR) and largely depend on Federal Allocations to meet their needs. How can this be addressed?

One thing affects the other. How many states are viable the way they are run now? That is why I support the idea of regionalisation. A lot of our states are not viable. If we run Federalism the way it should be run, the states should have control over any resources that are in their domain. The power at the centre should be decentralised to the states.

For example, Osun State can provide resources that oil is providing. We have stock of mineral resources in Osun State, but what is the state getting out of the mining business that the Chinese are doing there?

If the Federal Government allows Osun State to take over the resources and manage them, you will see the development that will follow. The same thing is applicable to many other states.

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The way we operate our Federalism is the issue. We first contribute resources to the centre and the centre now looks at it. Look at the recent agitation on the Value Added Tax? A state that contributes little is getting more. Some states are challenging the Federal Government. They are right! They should challenge this Federalism. That is the beginning of restructuring. The states should allow the Supreme Court to make a pronouncement because they are right. It takes boldness on the part of a state governor to challenge the Federal Government. If all of them can wake up and get SANs to interpret the law, let them go and challenge the FG and get the right things done.

Again, in terms of IGR, many people cut corners. How many businesses are registered in the states? How many businesses are paying taxes? Tax evasion is criminal. If you are a petty trader, the business must be registered. Who is implementing the laws? The laws are there. I wish and I pray that the right leadership will emerge in this country and in each state.

Doctors and lecturers are always going on strike in this country. In fact, the Academic Staff Union of Universities (ASUU) are currently on a warning strike while many Medical doctiors trained at home keep relocating to foreign countries in search of greener pastures.

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How can the country wriggle out of this problem?

The implication is capital flight, also called brain drain. It is because of the insensitivity of our leadership. Tell me one hospital that you can walk into and get services that you need? Is it a teaching hospital? They are glorified hospitals and we have lots of people working there who would not even go to work. All the doctors there have their own private practice because of continuous neglect of these facilities. So you will continue to have strike upon strike.

That is what you find not only in the health sector but also in the education sector. What is the budget assigned to education and health? Do the monies go to the projects they are meant for? When you select people who are incompetent, they value the wrong thing.

Somebody talked about knowledge, power and wealth; it is only a fool that will go for wealth. If you have the knowledge, that knowledge will give you power and you will use that power to create wealth.

We know that in the civil service, when you retire, you get your pension. The fund under the contributory pension scheme is about N13 trillion. The government has borrowed almost 80 per cent of the funds. How will they payback? Who cares about pensioners in this country? If you retire today, you don’t even talk about pension for the next five years and you may have even dropped dead. It is unfortunate. There has been neglect over the years, but there has to be somebody who is competent to handle this.

As long as we don’t go the conventional way of seeking knowledge to create wealth, but are just spending and spending, we will just be moving round the circle. What do we produce? Is it not shameful that we don’t have a refinery that is functional? Most of the monies being taken abroad are going to be lost when the owners die because many Nigerians don’t disclose what they have to their children and wives. Even when they disclose, it becomes a major problem because if you have huge monies and you want to reclaim them, lawyers will want to feed fat; and if you don’t have the money to pay lawyers, what will now become of the monies? A whole lot of resources are lost.

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In essence, you are saying that with good leadership, Nigeria will overcome all its challenges…

(Cuts in) There are many corporate gurus that have done extremely very well. They have gone out there to take leadership courses for this country. But the way and manner in which leaders are selected in this country is a challenge. By the grace of God, I started out with Mutual Benefits and we now employ over 5,000 Nigerians. The Federal and State Governments that are the largest employers of labour, what do they give? There are many civil servants that are totally unproductive; there are those that are corrupt. It is not as if they don’t have something to offer, but because the system does not encourage them. We need good leadership in this country. When you have these good qualities, you put them into use to make this country grow.

CULLED FROM, The Guardian

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Adesoji Omosebi
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Written by Adesoji OMOSEBI

BSc Agric Science

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