Vice President, Prof. Yemi Osinbajo SAN recently granted an interview to the Financial Times on the state of the economy, and how the present administration has been steering the ship of state. Below is a transcript of that interview released by his office.
Q: Views of critics that the Buhari administration didn’t make the most opportunity of the recession to diversify the economy.
Vice President: First, the nature of the crisis, of course, even beyond low oil prices, we were also experiencing considerably reduced oil production. At some point, we were producing less than a million barrels of oil per day, that being the major source of revenue at the time. But I think that what we did during that period was also very important in bringing the strong outcome that we are seeing today.
In terms of corruption, I think that we were able to deal with grand corruption. By that, I mean the sort of corruption where you found huge sums of money missing from the treasury and all of that. And because we were able to control grand corruption, we were able to do more with far less. So, for example, we invested N1.3 trillion in 2016 on capital for the very first time in almost 10 years of the country’s economic history.
So, if we were able to invest more when oil prices at some point, were $50 or $60, than when oil prices were at $110, $114; especially on infrastructure and capital; I’m sure anyone could say that there is something wrong with that. I think we managed to do far more with less.
Q: What else had been done by the administration?
Vice President: If you look at the different sectors, let’s take agriculture, for example, we have recorded very significant growth in agriculture. We are looking to gain at least 3.6 per cent growth in agriculture. That is particularly important to us, because in thinking of diversification of our economy, agriculture is, of course, a fitting point, and we closed that gap. Take rice for example, we were importing rice in the order of about $1.6 billion a year, which is about $5 million every day. Today, we are down to importing just about two per cent of the rice that we consume. So we have at least, ramped up rice production, we are practically self-sufficient.
Q: What role did government play in this regard?
Vice President: No, it is creating the right environment. For example, the Anchors Borrowers Programme was an important programme in getting people back to the farms, and also, which is one very part of this whole process, we supported the big millers in being able to increase a lot of the paddy rice that was being produced.
So there was a genuine effort to ensure that we are able to not just ramp up the production of rice, but also milling, and we found that the private sector responded to that, and we found the big millers, WACOT and others. Dangote is now investing about a million metric tonnes of milling capacity. I think that at this stage, agriculture has recorded significant improvement.
Also mining, because of the focus on mining, growth continued through the recession and growth has continued even now…
Q: Nigeria’s manufacturing capabilities.
Vice President: We are trying to create the right environment for manufacturing, and for business generally. And we took time to focus on the business environment with our Ease of Doing Business initiative, and we worked on various areas, including access to credit, access to registration of title, company registration, taxation and all of those things.
We looked at all of the different areas in our Ease of Doing Business, with a view to making life easier, to creating the right environment for manufacturing and for business generally. And we’ve recorded significant growth and this we are seeing in the growth that we are seeing today.
I’m sure you are familiar with how our World Bank rating went up and we were also considered one of the best reforming countries in the world.
Of course, there has been a lot of damage to the environment in terms of business and all that, but correcting that would take a while, don’t forget that we (this administration) are barely three years old. And we are focused on doing the right thing.
Q: What areas hasn’t the administration been able to achieve all that it had planned to?
Vice President: I think the one thing we wanted was for us to be much farther ahead in terms of manufacturing. But a lot of these things are also infrastructure constraints that cannot be developed overnight; which explains why we are investing heavily in infrastructure; rail, road and power, especially rail. This is the significant part of the investment that we are doing; concessioning the Lagos-Kano to General Electric, the narrow gauge, developing the standard gauge is important in terms of just movement of goods and all that. A lot of these initiatives would be a great help in moving goods.
Q: Why hasn’t Nigeria signed the African Free Trade Agreement yet?
Vice President: Nigeria has one of the most vibrant private sectors. Manufacturers associations, in particular, and several others felt that we shouldn’t go into this without further consultations, and we wanted to know exactly what specifically in terms of negotiations that will follow the signing of the framework. And it was the President’s opinion that it would be much wiser for us to suspend the signing until all of those engagements had been done to the satisfaction of the private sector. We work very closely with the private sector in practically everything that we have done.
For us, it is important to sit back, take a look at those negotiations first before heading into the framework, which is really what we are doing at the moment. So, where we are is that we are looking at the nitty gritty and we are trying to be sure how it is going to play for our private sector people, for industry, for trade, etc. We are not saying we are going to renegotiate the framework; the framework is already there. Our greater concern is for the specifics. And we are at a point where before we go into that, we will certainly make sure that we are happy with the terms and conditions.
Q: How is the administration tackling Nigeria’s security challenges?
Vice President: First of all, let me say that the nature of the security threats is asymmetric coping with it. And this is the same with countries all over the world; coping with terrorism is the sort of thing that most countries are grappling with.
I think that we are dealing with that as well. And my take is that the way we are going about it is the right way, in other words, we are working with partners in the sub-region to ensure that we are able to stem the flow of small arms for example.
We are also working on developing our local capacity. One of the strong initiatives that we are pushing is community policing; because a lot of the terrorism that you see are the sorts of opportunistic attacks that require local policing. And one of the strong initiatives that we are pushing is the whole question of the state police; more local and community policing, and we are working on those initiatives with the governors, like in the National Economic Council, which I have the privilege of chairing. We are trying to see how we can do more in terms of local policing, intelligence gathering, in order to be able to respond much more quickly to some of the threats that we see.
For example, in Benue State, we have deployed Special Forces now to several of the places where we have the disturbances. So, it is an ongoing engagement, and, as I said, asymmetric threat of this nature means that we just have to keep planning ahead as much as we can.
Q: Criticisms of government’s efforts in tackling herdsmen/farmers clashes.
Vice President: If you look at the herdsmen/farmers clashes, it is a different type of problem (to the issue of Boko Haram) and it has to be dealt with differently. Note that this crisis did not start with the Buhari government. These clashes have been going on for years. I think we are at a point that we believe that the right response; our response, has to be robust to ensuring that we are able to keep communities safe, which is what is going on. We are doing that in various parts of the North central.
Q: On Nigeria’s dependence on oil revenue.
Vice President: I think that what we are doing is that we are managing our finances far better. Today oil prices are about $80 a barrel. Our reserves are at $47 billion, which is the highest in about 10 years, comparable to 2013 when oil prices were higher. So beside the Sovereign Wealth Fund, we have invested far more; we’ve almost tripled our investment in the Sovereign Wealth Fund.
I think the question about whether you spend or you don’t spend is really more a question of how you manage the resources in the first place. For us, I think that the management of resources has been a strong point. I think we have managed our resources well. Which explains why we focus a great deal on diversifying; agriculture, manufacturing. We’ve focused on trying to diversify as much as possible, and we think that it is the path to go. There is no other way of doing this.
And if you look at the figures, there has been tremendous improvement, in the export of raw materials, agriculture produce, even manufacturing has improved. I think that we are on the right path. I am convinced that we are going to stay the course.