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| Clement Ofuan |
Chief
Clement Ofuani is a Chartered Accountant and a former Commissioner for
Economic Planning in Delta State. He was also a Special Adviser to late
President Umaru Musa Yar’Adua. In this interview anchored by OMOS OYINS
of Delta Herald, Ofuani explains, in details, the impact of the rebased
Nigerian economy, the essence for resource control and certain issues in
the Delta State 2015 politics. He exudes intelligence in his analysis
of economic issues and gave insight into the benefit of the Delta beyond
oil initiative. It provides enough breakfast material for all
Nigerians. Excerpts:
You
are a Chartered Accountant and a former Commissioner for Economic
Planning in Delta State, how do you see the present rebasing of the
nation’s economy as the largest in Africa and the 26th in the world?
The
rebasing of our economy is something done to give us a more up to date
statistical information about our economy. Until now, we were working
on estimate that was based on 1990 and this is supposed to be done every
five years, but it hadn’t been done in almost more than a century. What
this means is that if you were looking for accurate statistical
information upon which to make decision, you are getting wrong
information and obviously you cannot make the right decision based on
faulty information. At best it would be guess work. Armed with better
information now, we expect that we would make better informed judgment
about our economy.
There
are investors that only deal with economies at a certain level in terms
of size. Before now, if we didn’t qualify on the basis of our size
based on the faulty information of the past, those investors would not
look in our direction but now that they can see the size of our economy,
their own investment outlook towards us will change. The same thing
when they compare the GDP or per capita income, that is the average
income per person and they see 250 dollars, some people would say they
are poor people so I don’t have any business going there. But when you
compare the GDP based on the rebased GDP size, you suddenly find such
people being interested.
It
was this kind of wrong information that was used by the GSM companies
in making their feasibility studies and projection when they were coming
into Nigeria 10 years ago. Because of that they underprized our GSM
licenses and we even gave them five years tax holidays because we
thought we were too poor to afford their services so we saw it as a
bigger risk. If they had better information that time, perhaps we would
have made more money as a nation on the GSM auction and possibly we
wouldn’t have given them five years tax holidays when they started
breaking even. Before they were one year into operations, there were
fears that they would be making losses in the period before they start
making profits to recouping the losses but in this case they break even
in just one year and for the next five years they didn’t pay us any
taxes on their income because we acted on faulty information. So the
rebasing of the GDP is essentially what is giving us better statistical
information to plan our economy. It doesn’t change the amount of money
in our pocket but it does change our prospect for tomorrow.
How would this rebasing translate to making jobs available for the average Nigerian youths?
Precisely,
what I have said is that investment decisions would be altered
positively to our advantage. For instance, if you are coming to Africa
before and you thought that South Africa was the place to go because
they have the largest economy, now you learn that Nigeria’s economy is
many times larger than South African’s economy, you change the
decision. Added to the fact that we also have a much larger population
it makes us even more attractive as an investment destination. I was
just reading today that NISAN South Africa took over the assembly in
Lagos and they just rolled out the first made in Nigeria Nissan SUV so a
whole lot of these investment activities would start happening. It
doesn’t happen overnight but the environment has been created for
positive actions to be taken and once that kind of increased investment
flows into our own economy, the next thing that would follow is jobs
because the jobs flow in the employment will follow and our youths would
be employed.
The
National Conference in Abuja has been on for about a month plus, from
your view of the whole setting, what do you think would be the outcome
of the conference?
I
would like to say that it is more of what our expectations are than
what the outcome would be because our expectations are that they would
come up with a product that would be a better re-arrangement of the way
we govern ourselves than what is found in our current constitution.
Now, how we move from the existing constitution to the new product that
we hope they can give us is something that I believe the authorities are
still working on. I know that Mr. President said in his inaugural
address that the National Assembly was trying to amend the constitution
to allow for a referendum perhaps to bring to birth a new constitution
for the simple reason that the generality of the people accept that the
constitution we are running with has failed us.
We
are operating a federal system of government but it is being run as a
unitary state and that is not in concord with our nature and our history
and all of these have ended up with the kind of conflict and
instability that has been prevalent in our nation. So, one expects that
first the opportunity to talk would enable people take away some of the
wrong information that they had about people in the past. It would arm
you with better understanding of the differences that exist about the
various people that make up Nigeria, then we would now be able to evolve
more sustainable solutions in terms of the kind of political
arrangement that would make us a more united nation. And I hope that
would be the outcome.
The
issue of resource control is really causing heat at the conference, in
your view as a Deltan where we have much oil, would you subscribe to
states controlling their resources and against the current practice
where the center controls and distributes the resources to the states?
Sometimes
when we use terms like resource control, they become too emotive that
people cannot even reason in terms of what are the advantages and the
disadvantages. We have to trace back to our independence arrangement
where the regions that came together to form the Federal Republic of
Nigeria had a large measure of control over their resources, both human
and mineral resources and because of that there was a very healthy
competition between the regions. We were growing at an incredibly good
rate per annum and then suddenly all of these were changed with the oil
mineral act and all the control over mineral rights became vested only
in the federal government. Of course the oil curse has been such that
that apparently free money that we have been getting from oil eclipsed
other productive ventures that we should have been taking, so the Cocoa
farms, groundnut pyramids and oil palms disappeared and all of us
continue to eat and survive only on the basis of the oil.
But
if we go back to how it used to be, what we negotiated at the beginning
of independence, then it becomes another mechanism for bringing back
the good old days, it is something that will now force back more
people to be dependent on themselves on what they can produce and what
they can contribute. There is no part of this country that is too poor
to survive. Typically, some people may think Zamfara, for instance, to
be poor, but they are sitting on gold. But beyond the gold the state is a
food basket and that is enough to keep so many nations going and we
have enough agricultural production in Zamfara than a couple of West
African countries. If you calculate their GDP, with proper value chain
addition, you will find out that their GDP may even be larger than that
of the several states in Africa. The idea of going back to proper fiscal
federalism of increased control of resources at the subnational level
is not to make states richer but simply to increase the efficiency of
the management of our national resources.
From
observations, it seems the federal government is playing game with the
security situation in the country, what do you think should be done
beside what they are doing now that can help in solving the problem?
I
would not say the security men are playing games, these are people who
are sacrificing their lives for Nigerians. A lot of them have been
killed, their families have suffered all kinds of deprivations as a
result of their involvement in the ongoing insecurity containment. What I
would say is that either the strategy they are applying has not yielded
the desired results just yet, then we need to review those strategies
and find how to make them more effective. I expect now that we have
noticed that these incursions happen mostly in our border areas which
gives some credence to the fact that these people may have some external
support in our neighboring countries. I expect us to have a summit in
all the neigbouring states so that we can jointly deal with it as a
regional issue because we cannot have a base in Cameroun and they are
coming to strike in Nigeria and run back to Cameroun and expects us to
respect the Cameroonian territorial integrity because it has been used
as a base to bridge Nigeria’s territorial integrity.
So,
I expect that the federal government should be able to involve all the
surrounding states in a regional summit and see if we can agree on
certain joint actions to be taken to deal with the challenges in our
borders and I also think that a lot more has to be done in terms of
tracking the financing and the supply lines. Take the abduction of the
200 girls, imagine the number of vehicles that would have come in a
convoy to be able to carry all of those pupils including the one that
would carry the arms men. If they used Hiace buses as they claim, they
would even need far more and these buses need to be fuelled before they
come to the school. There is so much questions that need to be answered
in an intelligent manner for them to be able to unravel what is going
on.
Now,
Nigeria is on the verge of conducting another election, what do you
think can be done to stop the issue of electoral mal practices and
acrimony, fighting, litigations and other fraudulent acts in the system?
There
is no severe bullet for it, none at all. You could say that if we have
a free and fair election in which the wishes and aspirations of the
people are respected through the electoral mechanism, then of course, it
would begin to reduce the acrimony but you the issue is how do you then
have the free and fair election? That is the job of INEC without
looking at anybody’s face to make sure that every vote counts and every
vote is counted. Once that happens, at least when somebody is losing the
election, you will know you lose because you are not the choice of the
people and when that happens the political parties who field candidates
in the past as a first step to the general election will now bear in
mind that if they field unpopular people or inappropriate people, they
are likely to lose in the general election.
But
situations where some parties think that even if you field a goat, it
is going to win in certain constituencies, then of course the tendency
is for them to take people for granted in choosing who their flag
bearers are and then it increases the level of discord and discontent in
the electoral process. All of these also trace back to the kind of
incentives our public office holders enjoy where some of the resources
is diverted to the personal comfort and the paraphernalia of the offices
of states, then it becomes a do- or- die affair to get in there but if
we rechannel the incentives to ensure that only people propelled by the
desire to render service and what it takes to render that service, then
the acrimony will reduce.
Let’
come to Delta State. For 2015, Delta Northerners are saying it is their
turn. Do you subscribe to a shift of power to Delta North or anybody
that is qualified to be voted into power?
To
answer that question, it would not be a question of do I subscribe to
power shift or power rotation, it is a solution that evolves from our
historical experience, nobody just woke up and said power shift or power
rotation. They had looked at the struggle for power in Nigeria over a
period of time including pre independence and right until now and find
out that historically election went along ethnic lines. It wasn’t a
matter of ideology. So, what then happens was that the moment you belong
to a democratic majority, it was expected that even if you were the
worst candidate, you would win and that created dominance over those
with minority groupings in their demographics and when I say minority,
it does not mean by tribe alone, it could be by religion.
Any
form of demographics that puts you in the majority is exploited to win
the election rather than what you as an individual represent and what
capacity you are bringing to the table. It was in consideration of all
of these that the founding fathers of the Peoples Democratic Party (PDP)
have said that we will subscribe to a zoning and rotational arrangement
that will reduce this acrimony because it gives every member of the
demographics a sense of hope that sometimes it would be your turn and if
you are a member of the PDP you are bound by it. Go and read it in
section 7, subsection 3C, it is very clear on it and as a member of the
PDP, that is what I believe and I subscribe to. So how it plays out in
every single election whether in the House of Assembly election,
senatorial, or presidential, we follow the dictates and directives of
our party to resolve the issue.
There
are about 15 aspirants that are aspiring to become governors from Delta
North, what do you think should be done to pick the best, should it be
left to the powers that be, the leaders of the party or the electorate?
The
first line is the party because constitutionally, only the party can
present candidates for the electorate to choose and in making that
decision, the party has to take into consideration the desires and
aspirations of the electorate. So, we believe that if all of these are
done harmoniously, the best person will emerge. The best person meaning
the most appropriate of all the factors considered in determining who
will make a worthy leader at any point in time and the number you have
mentioned shouldn’t scare anybody. It doesn’t mean anything as people
can indicate interest and go and do consultations and they haven’t told
us what they are telling them as they do the consultations and at the
end of the day some will listen to what they have been told while others
won’t until it comes to the primaries. That is the point when the party
makes its decision and that is the process that is constitutional.
The
present government runs three agenda; security, infrastructure and
human capital development, what do you think should be the focus of the
next government coming into power?
The
3 points agenda are very excellent programmes and they represent the
challenges before us even today. So, I do not see that anybody coming in
is going to do anything differently in terms of the agenda setting
because we still need infrastructure. There is a huge infrastructure
deficit; we still need security to attract more investments in order to
reduce the unemployment. We need human capital development, investment
in our youths, investment in skills acquisitions, and investment in
giving them knowledge. The infrastructure that you are developing also
need skilled hands to maintain and to operate, so these agenda remain
the same. What may be different would be the way each person interprets
the agenda and prioritizes his attention on each and every component and
that is what makes the difference between one government and the other.
As far as I am concerned, the problems and challenges facing every
Delta is still the same.
If you were to be the governor in the next election, what would you do for Delta State?
I
just told you that I would still face the same agenda trying to create a
liveable and safe environment for our people, trying to create jobs,
and to increase family incomes so that our people can live better lives
and in cleaner environment. I will still want to deal with the
infrastructure deficit to make sure that the cost of doing business
finally drops then making us more business attractive for investment. So
it remains essentially the same thing but as I said the difference will
still be on how I set my priorities and I trust that I have
demonstrated that I know how to set priorities.
What
do you think is required of a person leaving a private sector to a
public sector, what qualities do you think he needs to manage large
resources like state or federal government resources?
It
is not really a matter of the size of the resources. Many private
sector organizations are far richer than the state in terms of the
resources available. The least Nigerian bank has a turn over that is
bigger than the budget of any Nigerian state and it is one Managing
Director managing all of that resource, so it is not so much about
resource management but the challenge in the public sector and how you
formulate policies because these policies affect different sectors of
our society in different ways, forcing them to respond in different ways
knowing fully well that it is the aggregate of our responses that makes
for how our economy performs.
The
public sector runs on rules and regulations, so it is not like you are
coming to invent new things. There are procedures for managing the
resources; you must present a budget, the budget must be approved by the
House of Assembly and then it is implemented by the civil service but
the differentiator is really about finding the best way to enact
legislations and policies that make people behave differently in order
to achieve a specific result and specific target, that is the challenge
for a person who comes into the public sector unlike the private sector
where you don’t go through legislative process and the politics because
you are managing people.
The
present government has been talking of Delta beyond oil but we, in the
media, are seeing it as more or less like theories. What practical steps
do you think should be taken to make the initiative felt by the people?
I
would say what is your own understanding of Delta beyond oil? Because
it is clarity of understanding that would drive the conclusions we reach
on the subject. I would say for me, my understanding is the government
recognizes that it has been largely dependent on oil revenue for its
physical activities and it seeks to broaden its revenue base so that
even if oil price is going down, its capacity to meet its obligations
would not be diminished simply because oil price is going down. Where
are those resources going to come from? They come from taxation and
taxation is a function of the level of income of the citizens because
citizens pay taxes on the basis of their income.
Therefore
if you want to diversify your economy to dependent beyond oil, it then
means that you would have to take actions that would affect the size of
citizens income and of course their civic responsibility and they go in
two ways; one is the ability to pay which government policy can enhance
and the willingness to pay which of course is a factor of the coercive
authority of government and as well as what the government has done
positively that becomes an energizer for the average citizen to say I
have seen this government manage our resources well and I feel an
obligation to pay my taxes.
The
government, in its own wisdom, has pursued micro-credit schemes to
create new crop of entrepreneurs and it is expected that these
entrepreneurs would be employers of labour who would pay taxes and they
would make profit in their various businesses and those profits would
then begin to trickle into government revenue in form of taxes. I think
it is an ongoing process and these things are not things you switch on
and switch off like light. Some of the businesses may not break through
in the first year or second year and the third year and subsequently
they start growing so you have to plan and wait for the gestation
period.
What do you think are the economic potentials of Delta state that need to be developed to attract more investors?
The
first thing is trying to deal with the infrastructure deficit to reduce
the cost of doing business. Moving goods from one point to the other
and developing our ports and integrating the port with our
transportation system; rail and road and air including our water
transportation in such a way that the cost of doing import and export
would dramatically drop. Those are the kind of things that investors are
looking for. A secured and safe environment to do their business,
uninterrupted power supply such that they don’t have to be their own
local government area supplying all sorts of services, water and
electricity by themselves. These are the things that government can do
to attract businesses.
We
have got incredible potentials as a state in Delta. With five seaports,
with a free trade zone, Asaba industrial lay-out, investing in housing
development in and around the Asaba territory alone can create jobs for
the housing construction phase. It would also create increased tax
revenue on the basis of the rates that ought to be paid for the occupied
houses and can draw a lot of people even from across the Niger into
this area knowing that tax law says that you pay tax on the basis of
where you reside. These are some of the things that we can deal with to
create a sustainable economy.
What message do you have for Deltans as the election approaches?
An
election is always an opportunity to have a new beginning and that new
beginning means that you must seek to put people that have the capacity
to lead the state in the direction that the people yearn for. It is
about their sitting down to make proper judgements and assessment about
where they want. It is not an easy undertaking because lots of factors
come into play in making that decision but ultimately, they have to
realize that until we vote for people with proven competence with
capacity, character and the knowledge and experience to lead the state
in new direction, we would then continue to do things the old way in
which case you would have motion without movement.
Delta Herad
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