MUSA RAFSANJANI:Strong Economic Team is Non-negotiable in Nigeria Now

 At the recently concluded meetings of the International Monetary Fund and the World Bank held in Washington DC, United States, several issues affecting the Nigerian economy, including oil subsidy, oil theft, lack of accountability and excessive borrowing came to the front burner. In this interview with Funke Olaode, the Executive Director of Civil Society Legislative Advocacy. Centre (CISLAC), Auwal Musa Rafsanjani, stressed the urgent need for a strong economic team to navigate the Nigerian economy through its existential challenges

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ow important are the IMF-World Bank meetings to the Nigerian economy?

The annual event is very important to us as a nation because it provides avenues for civil society organisations to draw the federal government’s attention to unnecessary wastage that might have emanated through its budget. If you recall, President Muhammadu Buhari on October 7, 2022, presented the 2023 National Budget and Appropriation Bill to the National Assembly. The budget estimates as contained in the bill total N20.5trillion with expected revenue of N9.7 trillion and expected (additional) borrowing to the tune of N8.8 trillion. If proposed budget scales through, Nigeria’s debt stock will be at N50.8 trillion. This is not just worrisome but also scary considering the state of our economy that we are already in. This situation looks like nothing but escalated poverty and exacerbated austerity. So, we consider this IMF-World Bank annual meeting as a very important forum for civil society to deepen their engagement with the financial institutions.

I remember that CISLAC in 2019 or 2020, when COVID-19 erupted, and the Nigerian government sought an emergency loan from the IMF to facilitate or mitigate the effect of the pandemic, CISLAC was worried and concerned about the influx of money without accountability. So when the Nigerian government approached the IMF for loan facilities, CISLAC wrote to the IMF to insist that while we are not against the granting of the loan, there must be certain transparency clauses in whatever MoU that the Nigerian government was going to sign with the IMF. This was to ensure that there would not be room for the diversion of the funds that are meant to mitigate the effect of COVID-19. And we also wanted safe reporting for Nigerian journalists and other Nigerians to be able to expose and monitor the use of the money.

We also wanted to make sure that the emergency procurement is also properly spelled out. Besides, based on our engagement with the World Bank and IMF, for the first time IMF and World Bank responded positively and they constituted a regular call with select Civil Society Organisations. ClSLAC is one of the organisations in Africa that the World Bank always does call with the directors. This has not happened before and it was as a result of this engagement that CISLAC brokered with the IMF on the COVID-19 money. 

So now that the Nigerian government has presented a budget that we consider a very disturbing figure, we also felt that this is also a good forum because almost half of the money projected would also be borrowed. And we felt that there is a need since all financial institutions are here and Nigeria is talking about debt forgiveness. Nigeria is still borrowing money and this money is not utilised according to the Fiscal Responsibility Act.

We thought that it is important to make use of this meeting to draw the attention of global financial institutions to the state of the financial or economic crisis in Nigeria, occasioned by corruption, diversion of public funds, mismanagement, and lack of ability to block leakages like issues as oil theft, issues about illicit financial flow and money laundry. So we thought it is important to draw the attention of Nigeria and the financial institution to ensure that the country’s economy does not collapse. We have already witnessed several recessions and the country has still not gotten its stand. We still need to do a lot to ensure that the economy is restored. Our foreign exchange rate has completely gone down. The lack of an effective and efficient economic management team is also part of the reasons why we are not having good policy choices in terms of our economy. And this is very worrisome because there is no way a country can be governed without an effective and efficient economic management team that will do that.

Are you not worried about the country’s indebtedness?

Of course, we are worried as CSOs. You know the way and manner in which money is being borrowed recklessly is a grave concern. Our income is not even enough to pay the servicing of the debt, not to talk of paying the debt itself. And yet, now and then, the National Assembly is approving fresh loans to the government. This is worrisome because there are other ways in which Nigeria could intensify efforts to raise more money rather than resolving to borrow. Because borrowing has become a lazy and easy way to get this money. And unfortunately, they misapply it or divert it or waste it, or do things that are not meant to regenerate the money back, as envisaged in the Fiscal Responsibility Act that spells out that loans should be collected, but the loan should be paid back from whatever source that it has been taken. That has not been the case and that explains why poverty is increasing. Austerity measure is going to be harder now with this budget presented by Mr. President. And I think it is important that as a civil society, we continue to draw the attention of the government so that it can look inward for other areas where revenue can be raised. And waste, diversion, and stealing can be minimised so that the economy can come back.

It is generally believed that lack of accountability is majorly responsible for the current economic mess. How can this be addressed?

It is simple. By holding officeholders accountable. Part of the challenges that we have in Nigeria at local, state, and national levels is the inability to instill and ensure accountability in governance. So people believe that it is their birthright to squander or mismanage or loot public money and nothing will happen to them. So there is also a gross misunderstanding of democracy. Some people assume democracy is a luxury for them to use public taxpayer’s money and get away with it. And also the political corruption we are witnessing is what is exacerbating the kind of crisis we are seeing. So when you loot, when you belong to the ruling party, a kind of soft landing is given to do whatever you are doing, until you have probably political clash, then that is when they will begin to think that you have deviated. But I think if we are talking about building systems and building institutions, it doesn’t matter whether you belong to a particular group, religious group, political group, and whatever identity. If you break the law, the law should take its course on you.

 Are you worried about the issue of oil theft in Nigeria?

The oil theft is a conscious and deliberate effort by some people, who are also in power, in government, who are being given the trust to ensure that they secure the economy. They secure the oil facilities, but because of a few or small gains they make out of it, they allowed oil theft to be a very, very lucrative business against the interest of the nation. To the extent that more and more discoveries are coming on this prolonged deliberate effort to continue to siphon the oil and destroy the facilities. As I speak to you today after several years of oil exploration, Nigeria did not have one genuine metering system. So apart from oil theft, which is a result of that, we are not even able to meet our quota offered by OPEC. There is also another fraud, which is, giving a huge amount of money to some militants or ex-militants to guide the oil pumps when you have the Navy, the police, you have the DSS, you have all sorts of security apparatus in the country. So this means that Nigeria is promoting militancy and criminality, if she would have to give this huge amount of contracts. For now, it has not even stopped the oil theft. It has not also stopped other vandalism that we are seeing. So it is a cartel. It is a properly organised local and international crime that is perpetuated in collaboration with local collaborators to continue to undermine the economy and destroy the economic base of Nigeria. And this is because corruption has been taken as a joke. The fight against corruption has not been institutionalised. And it has not been taken seriously. Because if you have a system and you have proper anti-corruption in place, you will not see the kind of rampant and reckless way of doing things in Nigeria. So it is a serious crisis that we are facing. And government must rise.

Nigeria’s economy has gone comatose. How do you think it can be saved?

The public finance integrity in Nigeria is probably at its lowest state. The debt profile has defied all economic prudence frameworks that exist in the laws. During interaction with the media, I mentioned many contributors to the non-existent solution to the issue. The number one is tax administration. I said this because the leakages that exist within the financial architecture of Nigeria as a country create a default opportunity for ineffective taxation and consequently failure in optimising our revenue that is required for national development. And this must be addressed.

Also, the extractive sector must be looked into. As mentioned earlier, organised corruption in the oil and gas sector is a major issue that is expressed in several ways including oil theft and all other forms of sabotage within the trade value chain – fuel subsidy and other unproductive incentives. This trend has consistently left us in a situation where this revered sector is rather sapping revenue from the government instead of contributing substantially to fund developmental projects in Nigeria. Another one is the absence of an economic team. As the saying goes “If you fail to plan then you are planning to fail.” Every government should constitute an economic team of technocrats saddled with the responsibility of advising the President on economic issues at any given time in the life of every regime.

The absence of such a critical team leaves room for a knee-jerk approach to economic policies and interventions which a lot of times fail to make any serious impact. Although this essential spending is being made by our governments today, the debate over how to deal with the debt generated by the COVID-19 crisis will be of vital importance to Nigerians.

Also, policy actions that choke the middle class and informal sector and public procurement issues have been issues with numerous irregularities that are alleged within the process. And finally, misplaced economic priorities. I said this because the legislature’s primary mandates are oversight, law-making, and representation. The legislator is never saddled with the responsibility of implementing projects at any level of government. This is arguably putting the constituency project concept as an economic misplaced priority. Also, these funds have never been accounted for nor have they ever had any resemblance of proper management in the past. We believe that the lawmaker should concentrate on his/her primary mandates, but ensure that the executive implements any project as provided by the Appropriation Act within the fiscal of the government.

 The IMF has been clamouring for the removal of oil subsidies, but its critics believe the masses will be at the receiving end, if it is removed. What is your stand on this?

Before the IMF, we as CSOs have been advocating that government should stop this fraudulent oil subsidy. There is nothing like an oil subsidy except oil stealing. We are also in agreement with the so-called oil subsidy that should be removed and utilised for other social development like the healthcare system, like an educational system that has collapsed. These are visible areas where we can see revitalisation.

 But there is a belief that if the subsidy is removed, it is going to affect the masses…

The masses are already affected because the majority of the masses don’t even benefit from anything called fuel subsidy. There is nothing that has been subsidised. In every city you go to, every state you go to in Nigeria, it is the black market they are buying. So who is subsidising whom? In the North, since I grew up, I saw the black market as the only option for buying fuel. So people in northern Nigeria didn’t get anything called a subsidy because they have been permanently buying in the black market. And likewise in some parts of southern Nigeria, many of them don’t also see anything called a subsidy. So this subsidy must be stopped, if we are serious about fighting, corruption and if we are serious about engineering our economy. You cannot take about five trillion to invest in this fraudulent venture called fuel subsidy. You can imagine if you are having this money, it is a different thing altogether. But you are borrowing this money to finance this subsidy. This is not done anywhere in the world except in Nigeria. And this is because there is no serious economy management team that can help govern the economy of the country. Otherwise, they would have brought other policy options to deal with this. So the apex bank needs to be restructured to make it to be more effective and more efficient and less corrupt.