 we're delving straight into the economy of Nigeria. You know Nigeria needs a lot of support it can get for us to rank to the top and we have to do that with money. We need more investors to come in. You need to shake your pocket. You need to have for yourself and enough to give to yourself, to your family, to your society. So right about now it is the economy. I'll take you to Professor Pat Otomi to do justice. Well thank you so very much. The question of the state of the Nigerian economy is central to everything. Security, the basics of healthcare like we've talked about, everything revolves around the economy. One American presidential candidate who became president said, listen, listen, is the economy stupid? It's the economy. Everything revolves around the economy. One of the things that we have done wrong in Nigeria is we have got the economy quite wrong. But I like to set the tone from the manifesto. Joining us via Zoom, two professors from the Lagos Business School, Franklin Ngu and Bongo Adi, perhaps I should ask that they provide a brief summary of the position in the manifesto on the economy. Maybe we'll go first with Bongo. Is Bongo there? Okay. Okay, Bongo. What in summary form does the manifesto say about how to get this engine cracking again? Okay, thank you very much Prof. And welcome everyone to this program. Yeah, like just as Prof said, everything revolves around the economy. And then the manifesto took its departure from the state of the economy. What we have today is a rentier economic system where it's difficult actually to place Nigeria's economy on the spectrum of economic models. Some people will say we have a mixed economy. But if you follow what has been going on in the past few years, you will know that it is neither here nor there. We are more like a socialist system where the government retook the commanding height of the economy. Not because it had any good interest or any sort of, will I say, you know, the interest of the people at heart to begin to allocate resources in an efficient manner. By the way, government has never been a good allocator of resources. But that is what we have seen happen in our economy in the past seven to eight years now. So where the government took over the commanding height of the economy by, you know, trying to reallocate resources. So creating a manner of subsidies. So we now have a misaligned macroeconomic system. The fiscal buffers have nothing, you know, in connection with the planks, other economic planks. So we have a situation where the fiscal is running at some pace, whether it's running or not. It's also something up for debate. And then the macroeconomy is also on its own levels. So at the end of the day, as we've noticed, the macroeconomy has no longer any control on the economy. So what do I mean by that? You've seen the central bank raising rates, which is targeted at curtailing inflation and things like that. But we've seen that macroeconomic policy over the years have become sterile. They've become unable to effect any sort of change or to correct the anomalies in the economy. Why did that happen? It's simply because of the way the government has managed economy, a subsidy driven economy, a rentier system, so which benefits just a few people. There is no efficiency in the system. So our manifesto started from there. Now the first thing that will happen is that we have to dismantle all these, you know, structures of systems of subsidy. Well, they are not actually subsidy. So let's call them rent seeking systems, because if it is subsidy, you will now be looking at, okay, the question will be, who is benefiting from the subsidy or who is the subsidy helping? Because if you subsidize a product or a service or any sort of good as we have with petroleum, you know, the fuel, the PMS, when we subsidize it, the target would be to help the poor, helps more businesses. But then you notice that those people are not the beneficiary of that subsidy. So the subsidy is still hijacked by the same rent seeking system. So it doesn't work. So the first thing that manifests to the government of the day we do is to dismantle all those systems. So when those systems are dismantled, revenue will begin to flow back to the covers of the government, because what we have right now, apart from the huge debt overhand, remember before 2015, Nigeria was not, you know, highly indebted poor country that has become today. By 2005, we got ourselves off the debt hook. Okay. And then that actually sets the economy on a new new spiral of growth. So for consistently for over 10 years, or about 10 years, a decade, that is during the Obasanjo, and then the beginning period of Jonathan's regime, we had a sustained economy growth of that average 6%. That was because we were kind of tending towards a market-driven system where demand and supply and the price system kind of determine the allocation of resources. That really worked and benefited the economy. Most Nigerians in diaspora actually started, in fact, we had a reverse brain drain. People started coming back to Nigeria because Nigeria started looking, I mean, putting very positive prospects for prosperity, for well-being and for people to meet the aspirations. So we had our people coming from all parts of the globe to take up positions in Nigeria. But that, of course, that freighted away by 2015 when the current administration came to power. Now they started to pursue what I call a socialist system. So which started to disrupt the market to create distortions all over the place. So whether in the fiscal system or in the macroeconomic system, we had that, you know, overriding ambition of populism. So populist policies never helped anybody. So that is the first thing that the manifesto tackled and then what our administration will do as soon as our president comes into power. We have to dismantle all those systems to liberate the economy from the stranglehold of rent seeking. So once that is done, so we are sure that we can now have the revenue to begin to build up all the critical necessary things within the economic system. So let me leave it there. So the first thing is that the macroeconomic mainstreaming, we are going to dismantle the system of rent seeking, which of course is workforce corruption. So once we tackle that, we are sure that corruption will be reduced by about 25%. Do not forget that our principal said that, okay, if you get into power, if he's not stealing, his wife is not corrupt, and then his family is not corrupt, and those around him are not corrupt. Corruption will reduce by 50%. So when we dismantle the rent seeking system that we have in the macroeconomic angle, corruption will further reduce by 25%. So we now have 25% to deal with, and that will be handled through institutional reforms that we have also proposed. So I will leave it at that point, bro. Thank you very much. Thank you. Thank you, Bongo. Franklin, it's Franklin in a position to join us right away to look at the points of emphasis that certain things that must be emphasized if you are to get an economy go from what is often described as consumption to production, to go away from rent seeking as Bongo has shown, which is at the heart of a Nigerian economy. Most of the choices that are made are made to advance the extraction of rent by a certain privileged group. That's simply the basis of policymaking in Nigeria today. Now, if you are going to stop the hemorrhage, cut rent seeking, if you are going to cut your coat according to your cloth, as General Obasan just said many, many years ago, instead of continuing in this profligate manner when your revenues are declining, oil stealing is preventing you from earning as much as you should, etc., etc. What should be the emphasis? What are the focus points before we then come to a general conversation around economic strategy? Yeah, Franklin. Good afternoon, everybody, and I hope you can see me or you can hear me. In terms of just taking off from where Professor Bongo talked, the key thing that needs to be done is, of course, for you to revive an economy, we have to look at three policy directions. One is the monetary policy, two is the physical policy, and three is the supply side policies. So, of course, we all agree that in this last in this current regime, it seems that the fiscal policy side has been on the back set, and that's why it seems like the monetary policy or the CBN is more or less pursuing both monetary policy and as well as fiscal policy and even supply side policies. So, I think the key thing that we need to do to start reviving the economy is, first of all, that the monetary policy institution, which is the CBN, should focus more on its core responsibility, and the fiscal policy side should also be up and running with regard to what they are supposed to do, and there has to be a clear harmony between the two in terms of how do they drive the economy revival. And of course, they need also to attend to the supply side policies. But on top of that, there are three or four things that needs to be done urgently. One is how do we, as we are actually pointed out before, how do we urgently remove the subsidy? As we all know, subsidy for the year will take almost 6.7 trillion. So, even if you remove subsidy, it means that you have about 6 trillion that you can't relocate to education health, which will definitely help in reviving the economy. As we also know, the difference between the rich and poor countries mainly lie on education and health, which is human development index. In addition to removing the subsidy, we also look at the cost of governance in Nigeria in terms of how do we significantly reduce it. Interestingly, it's been said that some people are stingy, some people are not stingy. So, some people are, Mr. Pitobi is now saying that Nigeria needs a stingy person because he's going to manage the economy prudently in terms of managing public resources efficiently. So, we've mentioned the removal of the subsidy, then reducing the cost of governance, then also in terms of how do we start looking at the issue of insecurity. If we're able to tackle insecurity very well, it means that our mainstay of our GDP, of the economy, which is agriculture, will be properly and properly revived. It means that people can go back to the farms, it means that people can now start farming properly. It means that output in the agricultural sector will now come up, which will also link to the mantra of emphasizing moving from consumption to production. Because even if we are good in agriculture, it means that the agricultural outputs will now be used in other sectors of the economy, so that we can now start moving from the first industrial revolution to second to third, and possibly to fourth industrial revolution, which is also in the manifesto as well. So, these are a few things that need to be done urgently. So, at least in the first few months of the administration, if it comes in to start reviving the economy. Okay, thank you, bro. Thank you, thank you, Franklin. I've got Mr. Madukah and Dr. Owezi here with me. And the big question is, some people think the task is too daunting. I mean, things are so far gone, so bad that, ah, can anybody fix this? What are your thoughts on saving the Nigerian economy? I think it's too far gone. What? But you can start. Okay. I can start. No, of course, things are not too far gone. If you look at countries like Rwanda, at some point you must have thought it was completely over. But look at them to do that, the stars of the continent, everybody's going, they're looking to them for direction. So, no, we're not too far gone. It's hope, which is really why we're sitting here. So, it wouldn't be on the back of the continent. We start the economy. And I think that, like Franklin mentioned, one of the points he mentioned was the security. And if nobody is going to invest in an hostile environment, and we need to raise, and what I see a people be doing in all his trips overseas and all that, is to build confidence. And the economy thrives on confidence. Investment can only happen when there is confidence in the economy. If I'm confident that money will come in in the next month, I can spend what I have now. But if I'm not sure of what's going to happen, I can hold on to what I have. So, yeah, we need that investment and all that. Like in the 90s, a nosy journalist asked a Belgian ambassador to Nigeria, why Belgian investors cannot invest in Nigeria. He said to the journalist, when Nigerian rich men begin to invest in Nigeria, have the confidence to invest in Nigeria, then foreigners will join suit. So, it will encourage domestic investors as well. And this is very, very important because investment is a function of capital. You have to have capital to invest and then generate the growth and so on and so forth. But we find that savings don't seem to figure in the consciousness of today's leading policymakers. That's right. I mean, I thought that the idea of referring to Peter Rubio as stingy was the silliest thing that shows people don't understand how economies grow. To say, ah, the money is stingy, save money. Why didn't you use it for the people? The quality of life of the people get any worse from what was done with the money that was spent. Now, there's to be a famous economist at Columbia University back in the 50s called Raghman Noxi. And his mantra was capital is made at home. All this foreign investment we are praying for, hoping it does not come in, really happens like the Belgian ambassador said. Yes. When there's domestic savings and investment and the city opportunity and then the rush in. But there has been almost irresponsibility in the way that most of those in the current order think of public resources, spend, spend, spend, no consciousness of savings. To compile that, still on this issue of capital, we have the fact that a lot of the assets we have can be converted to capital, you know. As Heranda de Soto, the Peruvian economist likes to preach. We have a lot of dead assets, dead capital. We are assets because simple things, like having a proper representational system, use this language, but let's call it a land registry, where you can buy and sell houses without any problem so people can lend you against any kind of land asset, for example, that you have. In preaching this for years, state governments have not managed to improve those representational systems, not realizing that it's a critical part of how capital formation takes place. So you look at these problems and you can even go further on that, the way that our regulators manage things, that reduce confidence. And then finally, a very big issue, I would like to emphasize this point. Most of the inflow of resources into countries like Brazil, India, China comes from having an asset register that is available to the world in a way that the world can bring in capital to develop those assets. Give a simple example. Here in Lagos, there is a national secretariat that was abandoned 30, 70 years ago to steal a waste asset. Whatever the legal issues, whatever, it doesn't make any sense, it doesn't matter. If we think we're serious people, we should have suggested whatever the issues are. Hundreds, literally thousands of such assets are doing nothing around the country. Whereas if we listed them, we did the right thing for the regulatory environment, literally billions of dollars will come in. Let's take that national secretariat for example. Can you imagine people bringing in two, three billion dollars to convert that place into some, let's even call it a hotel or whatever complex. Do you know how many thousands of Nigerians will get jobs there? So this failure to think about it is part of failure of development. Professor, I just recall the Singapore thing. When I visited the Singapore study tour, there was this issue of savings, which you rightly mentioned, that government is like for savings. For savings is the idea of Singapore's development. Yes. And then that for savings, made people to become conscious of their own lifestyle. From when you're a single person, you graduate from university at 21, you get a job. Government will force you to begin to save. Once you're 25, you move to an apartment, one bedroom apartment. When you begin to have children, you move to a bigger apartment and all that. So they plan their business like that. And I think that is what the government of B2B is also planning to do. The savings culture is obviously necessary for cut-off information. However, where the wage rate is so low that most people cannot afford to save. So even if you want to save, your cost of living so high, your wage is so low, you really cannot save. So one of the first things to do is to pay reasonable wages to people. Part of the police, for instance, who earns $30,000 a night, what exactly is going to happen? He has a child, he has a wife, he's meant to prevent his own rules. So already you are pushing that man into corruption. He doesn't want to be corrupt, he doesn't want to be bad, but he almost has much choice by the time he survives. Yes, you have to survive. So true, so true. The thing is that one commitment of the OB that he push is to increase wages. And you take, like the police force as a classic example, I cannot imagine that a policeman should earn less than $100,000 as basic wage. I really personally can't imagine that. But policies then facilitate people who now earn better. And it's not just people, but institutions to save. If you look at the Singapore story, all of the things they did in Singapore, we actually tried to do. At the same time, I was failed, hopefully they succeeded remarkably. National Housing Fund. Where is the money? It was the HDB, Housing Development Board of Singapore, and the savings they were forced that led to most of the major investments in this grand industrial park and all of those and all of those. But what happened? Because of corruption, I'm trying to make people understand why fighting corruption is such an important thing. Because of corruption, the same initiative at the same time in Nigeria failed massively. Suddenly, we couldn't find the money for the National Housing Scheme. But Singapore took it as forced savings, invested and grew the economy. So there's a relationship that Nigerians need to understand and own the change that is desired for this economy to grow. And we're at Abu Dukato Ranch for two weeks on this program that we had for scenario planning in Nigeria 2025. And we came out with three scenarios. You made a presentation, I was part of the logistics and all that. And out of that, we had observed that we had never had opportunity, Nigeria never had opportunity of having someone that understand the economy in the hem of affairs, a president that understand the economy, unlike other countries that even though they don't understand, but they can learn about it, but none of them willing to. The only person that even tried was a passenger, you know, that tried to understand the economy. So we said, okay, by 2025, this is the way. If we are lucky to have an entrepreneurial leader, a president, then the economy can grow by 10, 15 percent. Then if we are also lucky to have autocratic benevolent autocrat like a Singapore mandate, we're also going to have, you know, some growth then, you know, but the other one is going to with Somalia. But what I'm saying is that for the first time, we are going to have by the grace of God a president that understands the economy. Yeah. So I'm going to try and move on to our aspects very quickly because people are waiting for us. We've got Dr. Jerry Umukulo to talk about power and economic development. But in terms of general strategy, the manifesto captures a commitment to a strategy to move from consumption to production, which looks at agriculture. A good part of Nigeria, in northern parts of Nigeria, endowed with land area that is fertile. The threat of the rivers becoming opportunity through damming the Bainway and Niger rivers in ways that will, instead of flooding and killing our people, will have irrigated all season farming across these places, boost agriculture in a dramatic way, and begin to transfer them in industrial parks across the country into products that can be exported, consumed locally, improve the quality of lives of people. I think that a sense for this as the real crucible of how you turn around an economy that is in trouble is what we need to go on to by turning to a fundamental thing for building a manufacturing economy, power. If we're set, perhaps we can take Jerry Umukulo on power. The manifesto paid a lot of attention to how we can get power up and running. Nigeria has had an almost tragic experience with generating power. I'm ready to bring Jerome on on power, because for years I hosted another conference on power, and I keep talking about how when the late engineer Joe Makoju and Lili Moke were essentially the focal persons on power, they came to one of those conferences at the Lagos Business School on power, and they said, and don't forget that comparing us to South Africa, that on a per capita basis, if we were to just reach the South African level, and this was like 20 years ago, Nigeria needed to actually generate 88,000 megawatts of power. And today we're still talking about 5,000 in the three work. Oh, we can actually generate six possibly, but kind of stuff we hear every day. And we've seen Egypt just do dramatic things in raising power past 50,000 megawatts with, you know, population significantly, half of ours, and so on and so forth. Power is therefore a crucial part of this economic conversation. So I'm ready to take Jerome on. Okay, Dr. Jerome Umukulo is the focal person in our review, policy review and future view team. And he has tried to summarize the power discussion in the manifesto, and then to be joined by a few other people with expertise, including, and this is very interesting, we're going to bring on from the United States, a power sector investor to reflect on the Ubi Dachi manifesto on power. Give us a view of a foreigner who invests in power around the world, what do you think of the position of a manifesto on power, and see how we can really ratchet up this subject. Yeah, before Jerome comes on there, I just want to make a few comments on the importance of power to economic growth. You discovered that power constitutes between 65 and 85 percent of manufacturing component. Yeah, and you recall that when Lamy Dosanusi was central bank governor, he gave about 400 or 600 billion to the textile industry. Most of them rejected it. They said, look, if there is no power, there's no way they're still going to use that money to generate, listen, the only way to make sense to them is when there is power. And that's why the textile industry is still in the comatose, the way it is. It is a gentleman called Charlton. He married, he's a Canadian gentleman, married the daughter of the Char Group founder of the Hong Kong Chinese gentleman who built the big textile mill in Kaduna back in the early 60s. How's that? A conference in Anse in France, a Europe Africa summit, and he was there from African heads of state and all of this. And we're talking about the challenges of African development. And he said, look, their factory could have been in the stratosphere, literally speaking, in terms of producing for export from Nigeria, but for power. He even suggested a regional strategy where you can produce certain things in Mali, Saudi and Ghana, because there are better places for power and that combined with Nigeria and they could still be competitive. And this was good back in the mid 90s, and we watch the textile industry. Second biggest employer of labor in the country, after government, literally just disintegrate. Policy, trade policy, so badly managed through the years. And so one of the things that you'll be that team is going to focus on. And frankly, Rizzi's even talked about fiscal policy issues. Trade policy is so critical to competitiveness. And it's interesting the Chinese born, laid use, I guess he's American now, at McKinsey, Irwin's son, who has studied this whole thing, has written this book on Africa at the next, the world's next factory. And she talks about the failure of trade policy in Nigeria and how it led to the collapse of the textile industry. We must be able to get the best Nigerians around the world who understand trade policy. Interestingly, a Nigerian is now a CEO at the World Trade Organization. I think that her role there should be helpful to help him build capacity in trade policy, which has been a major being of the Nigerian economy.