Dr. Obadiah Mailafia is a former Deputy Governor of Central Bank of Nigeria (CBN), a development economist and one-time official of the African Development Bank. In this interview with BIYI ADEGOROYE, he speaks about the economy, terrorism and other developmental challenges facing the country
How can Nigeria benefit from Dr. Ngozi Okonjo-Iweala’s emergence as Word Trade Organisation’s (WTO) Director-General?
Well, the victory of our own Ngozi in securing the WTO top job is worthy of celebration.
There is very little to praise the current government for. But if we are to be fair, they have done well on this one and deserve to be commended. From day one, President Muhammadu Buhari supported her candidacy and stood firmly by her. Do we as a country stand to gain directly from her appointment as WTO Director-General? I do not think that should be our pre-occupation.
Besides, we need to understand that before you get such appointments, you must swear an oath never to be influenced by any external body or country, including your own. As an international civil servant, your primary loyalty is to the organisation itself and to the pursuit of the global interest, not the narrow interests of your country or constituency.
As to whether her position will benefit us, let me simply say that such appointments normally bring additional prestige to the candidate’s own country of origin. The WTO traditionally has tended to pander more to the interests of the advanced industrial nations to the detriment of those of the developing countries. Its decision-making processes, through the so-called “Green Room” mechanism, have often been opaque.
We expect Ngozi to clean up the cobwebs – the Augean Stable — and create a more transparent system that will help promote greater equity and greater fairness in the way things are done. This will, in itself, benefit our country and the African continent in general.
Ngozi was in the country last week and we saw that she had made a courtesy call on the Presidency. We also heard it announced that the WTO would provide technical assistance to our government on trade-development matters. This can only be good for our country.
Inflation has risen as high as 17 per cent. How can Nigeria wrest down this monster?
Yes, the recent increases in inflation are quite worrisome. One feels a tinge of nostalgia for paradise lost – for when we were able to get inflation to single-digit levels in the years 2006—2015. Gone are those glory days.
The factors fuelling inflationary spirals are fairly well established in economic science. The Nobel laureate Milton Friedman famously declared that inflation is always and everywhere a monetary phenomenon. By this he meant that we have to ultimately look at monetary aggregates.
Inflation, by definition, derives from the fact of too much money chasing too few goods. Inflation can sometimes be imported, through exchange rate pressures and international trade pricing. It can derive from rises in factor costs, from labour to land and capital.
Geopolitical uncertainty and insecurity can also trigger inflationary spirals, as economic actors cut back on investments and production to minimise risks in a turbulent environment. Inflation is always and everywhere, bad news. It hampers growth and long-term investments. It encourages capital flight. It also worsens the incidence of poverty and inequality.
Inflation is a form of robbery against the poor. The poor as the worst off because they live on fixed incomes and cannot take over in dollar assets like the rich can. Inflation, in my view, contributes to the collective debasement of value. Bringing down inflation requires a multifarious strategy.
Controlling monetary aggregates is essential, in addition to taming rises in factor costs. Boosting production and exports will also tend to have a salutary impact on the exchange rate, which in our own situation as an importdependent renter economy, will tend to dampen prices.
Reducing geopolitical uncertainty will also help, in addition to boosting confidence and ensuring a long-term macroeconomic equilibrium. For the rest, I might have to send you a consultancy invoice! (Laughter)
What is your reaction to the unemployment rate which has now risen to 33 per cent?
Again, the unemployment figures look bleak. At the height of the 1930s Great Depression in the United States, when unemployment reached an unprecedented height of 24 per cent, Americans thought the world had come to an end. There were many suicides.
It was not uncommon for people to jump out of the window of their upper-storey buildings. Nigerians are a highly resilient people. When you combine inflation with economic recession and high unemployment and novel coronavi- rus, you get a fatal cocktail of social misery, anomie.
Traditional coping mechanisms are collapsing. The social networks of kinship and organic solidarity that held communities and families together are breaking down. The worst affected are the youths. While general unemployment trails 33 per cent, youth unemployment averages around 40 per cent nationally.
However, in the North- West and the North- East, youth unemployment hovers above the 65 per cent mark. It is therefore no surprise that armed robbery, kidnapping, nihilistic violence and lawlessness have become the order of the day.
Every year, millions of young people are being churned out of our rickety and ramshackle education system. Many of our so-called “graduates” are barely literate.
Most are virtually unemployable. If you are in doubt, go to the global firms operating in our country. They will tell you they despair about finding qualified candidates for available jobs.
Much of the curriculum is also irrelevant to market needs. Much of the emphasis is on the humanities and liberal arts instead of the STEM disciplines of science, technology, engineering and mathematics. And much of the pedagogy emphasises rote-learning not practical skills. Another dimension of the problem is that not enough jobs are being created.
You could say that a graduate of Mechanical Engineering who is riding an Okada has a job. But it is clear that he is seriously under-employed, because riding an Okada is not the best use of all the skills he learned at university or polytechnic.
My position is that we can only frontally address the unemployment crisis through a mass-based agro-industrial revolution. Without mass industrialisation, we have no hope of absorbing this rising army of unemployed youths.
What are the dangers associated with Nigeria’s multiple exchange rates and why is a single exchange rate a better policy?
Multiple exchange rates are not good for the economy. In the first, they are rather artificial. I have always believed that the market rate – the clearing rate – is the right exchange rate. Anything below or above the market rate is a pursuit of illusions. Multiple exchange rates have always been the bane of the economy. Our military tyrants of yester-years thrived on it.
During our time at the CBN, we can proudly say that, for the first time in decades, we achieved a unified exchange rate for the naira. And it was a great boon for the economy.
The current administration has operated as many as a dozen exchange rates, although they have now been reduced to a few. But we are not yet there. Multiple rates are bad because they are distortionary; they open vast opportunities for profiteering and rent-seeking behaviour. They are an open sesame for corruption.
They even encourage capture of our financial institutions. As far as I am concerned, CBN autonomy is currently in name only, not in reality and not in fact. That venerable institution has been captured by vested interests.
Imagine this game-theoretic scenario: Because of the multiple exchange rates, a member of the cabal can sit in the comfort of his home and order any amount of forex at the favourable to be delivered to them.
They would then call a Mallam from one of the forex bureaus to come and buy at the higher rate. Sitting in the comfort of their homes, they have made a big killing for doing absolutely no work whatsoever.
All they have is connection and access. It is a vast cesspool of iniquity. A single rate as determined by the market is the best we can hope for. It leads to greater transparency and it leads to a more efficient allocation of forex. It reduces corruption, which is toxic for the financial system and corrosive to business relations and public morals in general.
How would you react to the current rate of kidnapping and general insecurity in the North?
Well, to be honest with you, I am getting tired of having to answer the same questions every now and again. I need to remind people that I am not a security expert – and have never claimed to be one – even some of my work has centred on national defence and strategic studies.
By the time one keeps repeating oneself, one begins to sound boring and tiresome. I am a social scientist and development and finance expert.
My interest in security matters centres mainly on how insecurity destroys economic development and social progress. My training leads to belief, beyond a shadow of doubt, that insecurity is bad for the economy and bad for long-term sustainable growth. It is the devil’s weapon to perpetuate poverty and human degradation.
The entire country has suffered from insecurity, including kidnapping and mayhem. But, if truth be told, the North has suffered far more than the rest of the country – Borno, Katsina, Birnin Gwari, Zamfara, Niger and the rest. Of course, the whole thing was originally directed at the Middle Belt, particularly Benue, Plateau and Southern Kaduna.
It was a calculated strategy of genocide and eliminationism based on ethnic and religious grounds. And we haven’t seen the back of them yet. The North- East and North-West are the poorest regions in our country.
The streets are always littered with Almajiris clothed in dirty tattered rags, with begging bowls covered by flies. When you pursue those who are already downtrodden and you kidnap, rape and kill them, what else is there to say?
It is a harrowing, staggering, heart-breaking, recrudescent abuse of humanity. God will judge the people behind these crimes. They will have to answer for their wicked crimes before the Bar of History.
How do you view the culture of paying ransom to the kidnappers?
I am afraid, many Nigerians believe that those in power are not being transparently honest with us about the transactions they have been doing with the kidnappers. For me, therefore, the question of ransom payment should not arise. Ransom payments are by definition immune to EFCC investigations.
It’s therefore no surprise that they rush to cough out before anybody even asks them. I also suspect that some of these kidnappers are only acting out scripts originating from the high and mighty. God will judge them and he will demand the blood of the innocents from their hands.
Two countries provide good evidence that ransom payments to kidnappers should summarily be outlawed in Nigeria. One example is Italy. In the 70s and 80s, Italy was plagued by the menace of kidnapping by terrorist groups.
The country was literally brought to its knees. One of the prominent victims was former Prime Minister Aldo Moro, who was kidnapped and killed in a horrific manner by far-left terrorists known as “the Red Brigade” in March 1978. In 1990 the Italian parliament enacted a law banning any payment of ransom to kidnappers.
In fact, the law went as far as immediately freezing all the assets of hostages and their families to prevent payment to kidnappers. The law came under a lot of criticism.
But in the end, it worked. The rate of kidnapping fizzled out. Another example is Russia under Vladimir Putin. As a policy, Putin does not negotiate with terrorists, not to talk of paying ransom. What he does is to seek purely militarykinetic solutions. They try to gather sufficient intelligence about the kidnappers and then they unleash their special operations forces.
We are told, although we cannot confirm this, that the Russians even seek out the families of the kidnappers and have systematically wiped them out.
They did it to Hamas in Lebanon and everybody now knows better than to mess up with the Russians.
The state, since Aristotle, is by definition that institution that monopolizes the use of violence. When a state allows terrorist groups to compete with it in the use of violence, it undermines the legitimacy and moral authority of the state.
This is why wise leaders take uncompromisingly firm positions against all terrorists. Do not negotiate; do not pay ransom; and do not appease. Instead, smoke them out from their rat-holes and pound the daylights out of them with fire and thunder, until they learn the bitter lessons of life. It sounds drastic at first. It will be very painful, but thereafter, we shall have a better and more peaceful society.
Do you think these guys are bandits or terrorists?
A bandit is a ‘robber or outlaw belonging to a gang and typically operating in an isolated or lawless area’. The synonyms for a bandit are: robber, raider, mugger, brigand, freebooter, outlaw, desperado, hijacker, marauder and gangster.
The touts and agberos you find at Agege Motor Park and throughout the streets of our cities and towns are bandits. A bandit is a wanderer, hustler, common thief and trickster who is ready to do you in for a quid or two.
However, when you meet a man in army uniform holding a fullyloaded AK-47 and rocket-launchers, you cannot say he is a “bandit”, then you yourself have serious problems. These people are not bandits; they are murderous terrorists who deserve no mercy whatsoever.
People who have killed and raped and maimed and kidnapped thousands of innocent people and have turned our country into a graveyard must never be treated with kidgloves. And many of such people are not even Nigerians.
They are mercenaries from distant lands of which we know nothing. In civilised countries, when a foreigner enters your territorial jurisdiction bearing military-grade arms an army uniforms, he is ipso facto considered an enemy combatant. Here, the laws of war must immediately apply. A government worth its salt must exterminate them before even listening to what they have to say.
Would you say history and facts support the claims of Boko Haram that Western education is forbidden?
You see, we live in an age where ignorance is at a premium and knowledge and wisdom are on the defensive. In the first place, they do not know what education is, let alone Western education.
And they are aliens even to their own purported religion of Islam. If they had a modicum of education they would have known that, in medieval times, the Muslims led the world in fields as diverse as mathematics, philosophy, natural sciences, astronomy and even prosody.
During the European Dark Ages, the magic lantern of civilisation was held high by Persian and Arab Muslim scholars and thinkers. The greatest Muslim thinkers were Universalists. They obeyed the Quranic injunction to seek for knowledge even as far as China. The world’s greatest centres of learning in the medieval world were Baghdad, Fez, Timbuktu, al-Andalus, Cordoba, Alhambara and Samarkand.
The Europeans re-learned Greek philosophy — Aristotle and Plato — from the Muslim sages. The figure zero (0), is an Arab invention. The current numerals that we use, 0,1,2,3,4,5,188.8.131.52. 10, are Arab numerals. The Muslims and the Indians were far better mathematicians than the ancient Romans.
Try and figure how you could do complex numerical analysis with such numbers as I, II, III. IV, IX, LXXVI. CXL, CC, CDLXX, D. The Romans who built great public works and wielded so much power in the ancient world were mere children in the field of mathematics compared to the Muslims.
The science of chemistry derives from the Arab word al-kimiya as established by the scientist and physician Abu Bakr ibn Zakariya al-Razi. Muslim sages such as Al-Farabi, Averroes, Al-Kindi, Avicenna and my beloved Rumi, are part of our common heritage of world intellectual culture.
Science and mathematics do not belong to one race, religion or ethnicity. Therefore, to say that “Western education is haram” is to talk alien tongue of the barbarian hordes.
What do you make of the failure of developed countries to assist Nigeria on the war on terror?
This is one of the most baffling puzzles for all observers of the Nigerian scene. In the midst of what looks like an incipient genocide, the international community has remained silent. The United States has largely been silent.
The EU has been silent. The same thing goes for Britain, Japan and the rest. I am very disappointed with the United Nations. There seems to be a conspiracy of silence to downplay what is happening in our country and to push everything under the carpet.
For the better part of decade, we were receiving prophecies of doom that Nigeria would collapse in 2015. When that did not happen, they changed the date to 2020. Now they are talking of 2030.
Military academies in the United States have been doing war games with Nigeria as the model of the failed state of the future. I have my own suspicions. I have been an assiduous student of Western classical diplomatic thought from Talleyrand and Metternich to Henry Alfred Kissinger.
The Westphalian machstaaten power-states which emerged in early modern Europe are based on nothing but the pursuit of power and naked self-interest.
In a world of diminishing raw materials, many of these world powers are trying to enforce an international division of labour whereby African counties will be a source of raw materials and a dumping ground for their goods and nothing else. They have studied our internal fault-lines and they know which buttons to press to trigger ethnic wars.
Through satellite imagery, they know where the vital materials are and are able to sponsor and arm rebel groups to move into the villages and clear the lands in readiness for the vultures to descend. I am not one of those who thrive on conspiracy theories and I am not in the habit of blaming others for all our misfortunes.
But it would be foolhardy, even suicidal, to think that imperialism has ended. The system of informal empire that now dominates our world is more evil and more pernicious than ever before. Look at the DRC. I believe there is a global complot to keep that wonderfully blessed country in a comatose state in perpetuity.
The DRC has three million square km of lush and rich forests.
According to some estimates the mineral wealth of the country, in present value terms, are worth about $40 trillion, which exceeds the combined GDP of the USA and the EU. Some rare earths are found in the Congo and nowhere else. Somebody, somewhere, might be planning to turn Nigeria into another DRC.
Recently, various world powers have been building military bases in our neighbouring countries – Cameroon, Chad, Niger and so one. AFRICOM has been patrolling the Gulf of Guinea. Do they know something we don’t? There is a kind schadenfreude about Nigeria.
The demons seem to be waiting for us to slaughter each other in the millions to fill up their blood banks. Sinister powers are pushing Nigeria to the precipice.
Our country is forecast to become a nation of 400 million by 2050. We would become the third most populous nation in the world. Nigerians are an intelligent and highly entrepreneurial people. The enemies of Africa know that if we are given a chance, we would become a world power.
So, for them, destroying Nigeria will ensure that no regional power rises on our continent. They want Africa to remain the playing field of empires as it has been for the better part of a millennium. This is why we must come to our senses and stop this mad rush towards another horrific civil war.
Some people have been told that Fulanis and Arewa are destined to rule forever and all of us are destined to be slaves. It is the kind of political formula that may end in catastrophe