CHIEF Olusola Dada, a frontline economist, stock broker and former president, Institute of Directors (IoD) has said the new Nigeria’s GDP Rebasing may not translate into quality life for Nigerians because of too many corrupt practices in the country.
Chief Dada shared his thought about the new economic indices…
What is your impression about the current stage of Nigeria’s economy?
Going by the first quarter report by the Federal Office of Statistics, the Central Bank of Nigeria and the Federal Ministry of Finance, the economy is doing well. These three government organizations can give us the true position of the state of Nigeria’s economy. Each of them has an aspect of the economy it monitors. In the case of Central Bank of Nigeria (CBN), it monitors if the exchange rate, interest rate are doing well. The Federal Ministry of Finance is in charge of fiscal policies of the government, taxation as well as issues concerning the capital market, whether the stocks are doing well. The Office of Statistics keeps record of the Gross Domestic Product (GDP) and going by their indices and parameters the economy did well from January till date this year. Aside the fact that there was a delay in passing the budget which affected the performance of the economy, if there is a delay in the passing of the budget there is always the problem of developing the economy by way of availability of funds to work with.
Government expenditure is another problem. We have to grow our economy by producing in the country. It’s so sad that our manufacturers still import raw materials. There is also the problem of power. The new power owners are complaining that they inherited dilapidated equipment and they need to spend a lot of money to turn things around so that they can start producing. For the meantime, manufacturers depend on diesel to produce. These are those things that affect the Nigerian economy for now. If we are able to overcome infrastructural problem, the problem of exchange rate and interest rate, the impact of this is that more jobs will be created. One of the greatest problems of Nigeria’s economy is unemployment. Imagine what happened during the Immigration Service recruitment where over a million applied for a job space of just 3,000.
Many analysts have said the new GDP rebasing is mere paperwork and can’t translate to a better living for Nigerians. What is your position?
There is no way you can calculate this GDP without resorting to practical data. GDP rebasing mean moving from the old indices to the more recent time. The rebase we used before is from 1990 and all over the world especially emerging markets like US, the World Bank, IMF have said there will have to be occasional review, otherwise we will not be having proper GDP growth. That is why they said we should move from 1990 to 2010 indices and by the time they did the new calculations they found out that the GDP has increased. It may be theoretical because it has not reflected in the lives of the common man but that is the definition of how you measure GDP in a real economic situation.
There are many factors affecting the quality of lives of the people in Nigeria and this is that there are a lot of leakages. How do we account for the situation whereby somebody made money in Nigeria and instead of reinvesting that money in Nigeria, he went to US or UK to buy properties and keep Rolls Royce inside his garage abroad. This is Nigerian money which I regard as a leakage. When you see the leakage going on, you will feel sad. Recently, the House of Representatives accused the Minister of Petroleum, Diezani Alison Madueke of spending a lot of money hiring aircraft to move around. It is very alarming when you look at the figure she expended on that. Her counterpart in other parts of the world would not go about in private jets.
The situation now is that the income generated from the GDP growth is not being distributed equally, a small number of people are enjoying it to the detriment of the people. If our GDP is above South Africa, it’s good news but in South Africa, their economy is better managed and there are no room for corrupt practices.
What are the signs to look out for to know an economy is growing?
Average life expectancy in comparison to other countries, infrastructural development, good roads and how many people can afford three square meals.
What is your assessment of former CBN governor?
There is no CBN governor present or past that did not mean well for the country. Soludo, Paul Ogwuma, Sanusi, Joseph. Sanusi came in to stabilize the banking system and he tried his best. If he had not done what he did many lives would have been affected. Reducing the number of banks to 25 is an achievement, trying to improve the value of the naira is also an achievement. The only problem Sanusi has is that it is unexpected of a governor of a Central Bank anywhere in the world to talk too much. He is not a politician. When you see an individual who says he is the only one who has answers to all problems, then he needs to be checked. Again, you don’t bite the fingers that feed you. Somebody brought you in. The issue of unremitted account by the NNPC is something you could go to the Presidency and explain and the president will just call in the Minister of Finance and other people involved but going to talk about it in public is wrong.
How would you assess the impact of the President and the Minister of Finance in terms of improving the lives of Nigerians?
I can’t talk about the Presidency, it’s political. But concerning the finance, I think the minister is doing well. She is a seasoned economist and a bureaucrat. She has managed other economies and she has brought the experience to Nigeria. She is a professional.
With the current trend in the economy, would you say the future is bright for Nigerians?
Yes, we have a brighter future. My fear is that anytime we are approaching election year, attention is diverted to politics and not how to improve the economy, in terms of unnecessary spending or political activities that will not improve the economy. Most political leaders will now concentrate on how to come back to power rather than doing things that will better the lives of Nigerians.