By Charles Iyore
Africa’s leadership challenges
It is pertinent at this point, to review one attempt at building a self-equilibrating and, therefore, organic African economy.
President Ibrahim Babangida, made some bold decisions and deregulated the core financial system area of Banking and Finance. At that time, there were also rice and food riots all over Africa, following the short falls in dollar earnings from cash crop and extractive mineral exports.
In Nigeria, the import licensing system was seriously flawed and we had significant dollar reserves. It therefore made sense to begin a foreign exchange auction programme, purportedly to determine a market driven exchange rate, but mainly as backing to the naira, issued to meet the ballooning cost of running government.
This action prevented the Tanzania kind of food riots in Nigeria, which could have quickly degenerated into civil insurrection, against the unelected and nervous military junta. Rice was imported aplenty, and became the food staple of Nigerians.
The poor management of the foreign exchange auctions meant there were wild swings in auction rates and too much naira in recovery. The Ministry of Finance through the treasury, could not be trusted to efficiently allocate resources with the Central Bank, given the import license debacle, and the Presidency assumed the final supervisory role, over the Central Bank.
Having bought time, with rice imports, the military went ahead to silence all opposition groups, mainly students and labour unions. Infiltrating their internal leadership elections, and incarcerating or eliminating anyone who dared to question the order of things.
The new banking class made hay, with spreads on dollar trades, as the real sector died slowly. The retort of foreign exchange traders, at the height of this debauchery was, “why are you worrying? The markets can take it”.
The foreign exchange auctions were very quickly taken over by a spate of sharp practices, which led to the wipe-out of the manufacturing and industrial base.
With chokeholds on the economy and voices of dissent, the seeds for maximum leadership with all the powers in the Presidency, were being sown. The rest, as in common parlance, is history.
With such presentations, even the most brilliant local market analysis is at best cosmetic, while foreign economic analysis (World Bank, IMF, etc.) are distant, and, I dare say, detached.
Is there any Hope?
Yes, there is hope, but Africa must build its economies from the bottom up, by building the appropriate institutions on enduring systems. This must be the approach, as no one else will do it for the continent.
The countryside does not need poverty alleviation but economic partnerships, financial inclusion will come as a matter of course, but structured economic engagement is critical.
Stepping outside the bubble has its own turbulence, but Mssrs. Wazobia needs to get it into their heads, that bubbles are not sustainable and that transformation is not a single subject pursuit, but detailed multi-disciplinary adjustments.
We must not be afraid or ashamed to seek vital local and foreign partnerships, or seek sovereign advisory, to birth critical institutions. This is the aid Africa needs, and Mr. Kandeh Yumkella, former Director General of UNIDO, has said as much.
Africa must first engage the many idle hands on the land and then progressively engage the minds through various other capacity building programmes. This is the real challenge of today’s leadership.
A new beginning?
I make no defense of President Buhari, but my take on the Presidential inaugural speech in Eagle Square on May 29, 2015, was of a man passionate about the future of the country and continent. He spoke about empires of the past, as a reflection of innate institution building capacities. He tried to wake-up the spirits, by affirming that those skills are like our blood, in our veins. So for me, starting with “I belong to nobody but to everybody” meant he would build institutions, rather than powerful individuals.
My attendance at the inauguration ceremony was fortuitous. I came in from England with the promise of an invite, which never came, but on the morning of the event, I got an invite by virtue of the personal sacrifice of Mr. Babajide Sanwoolu, now Governor of Lagos State. To him I will always remain grateful.
To manage traffic in Abuja, all invitees travelled in coaches, laid out for the journey to the Eagle square. I went with Right Hon. Phillip Hammond, then Foreign Secretary of the United Kingdom, and a Saudi Cabinet Minister. Despite the disorder at coach boarding, most in my coach, were full of hope and looked forward to a new and better order. I was therefore taken aback, that the line that most warmed the cockles of my heart, in his speech, was for many, the sore point at the Hotel lobby reviews. Many it would seem now felt their safe bubbles threatened.
I had published a few articles on hope and great expectations previously, and was reassured by an insider, who later became Minister, that things would change rapidly, once the President got on the saddle.
The jury is still out as to what the outcomes would be. There have been some dots of hope (Pension Act, NPA, Customs, JAMB, Treasury Single Account, Financial autonomy in arms of Government) but they have not been connected. The domestic plumbing has been good, but the production needs to start now.
Therein lies the hope, as many of the building blocks are in play, but requires an architect to put it all together. The new architecture will take Nigeria beyond the perpetual state of promise, to an economy, fighting fit, for global competition.
It will take leadership that has the confidence to take the necessary risk of stepping out of their bubbles and to begin the detailed work of rural/urban integration.
The emergence of Buhari as President, already demonstrated the boldness of some of the political class to take risks, by stepping outside of their safety bubbles. We need to put life and vibrancy back into African economies and make them organic. Nigeria’s leadership is critical.
• Dioncta@aol.com Darenth Kent England
Frontpage September 3, 2019