HRM Oba Oluyemi Falae, the Olu Abo of Ilu-Oba and Baba Oba of Akure Kingdom, is a former Secretary to the Federal Government, former Minister of Finance, and former Presidential Candidate. A pro-democracy activist and Afenifere chieftain, in this interview monitored on national television, bares his mind on why Nigeria should be restructured, why Afenifere endorsed Tinubu during the 2023 presidential election and other national issues.
You served the Federal Government of Nigeria in various capacities at a time Nigeria was a production economy, what is your assessment of the major danger you see in this economy, and how you think the President Bola Tinubu government can surmount it.
In my time as Minister of Finance, the challenge was the huge external debt that Nigeria had accumulated, not through formal borrowing, but through what I can call sleepwalking into a debt crisis, a trade debt crisis. We had imported, by that I mean Nigerian businesses and governments, had imported a lot of foreign goods which we could not pay for and that crystallized into huge external debt. Of course, that had an immediate impact on the foreign currency in Nigeria, and we had found it extremely difficult to pay for imports, to even open letters of credit for essential goods, for drugs, for wheat for bread, for books, raw materials, etc.
And unfortunately, at that time, the price of oil dropped to as low as $10 a barrel. So, we had it from all directions, but we were able to manipulate, to navigate the situation through a series of measures which we collectively called the Structural Adjustment Programme (SAP), which had both positive and negative impacts on the economy. But in my opinion, it was a very, very bitter medicine which did not kill the patient. On the contrary, it gradually brought sanity back to the country.
What do I mean by that? We were able to renegotiate our external debt to the level where we could start paying without sacrificing our ability to import essential goods. We were able to encourage Nigerians to produce other items outside of oil to earn foreign exchange, and we were able to achieve a level of economic development and diversification, even in that crisis period. And by the way, as of August 1990, when I ceased to be Minister of Finance, I left office in August 1990 to go into politics, the exchange rate was N5.50, not N55.50, not N550, to the American dollar and that was when we were screaming about SAP. I cannot explain to you what happened, but the Naira took a nosedive, and since then, it has been in free fall, unfortunately.
The consequences of that are that imports have become extremely expensive, and unfortunately, Nigeria is very highly import dependent. We depend on imports, not only of capital goods, machinery and spare parts and raw materials for manufacturing, but dependent on imports for even essential food like bread and cooking oil and medicines and books and all materials. If the exchange rate is not right, the Naira is weak, then automatically we are importing a lot of inflation into the country. What used to cost $1 when Naira was $100, if it still costs $1 today, then the price in Naira is about $2,000. So, the valuation of the Naira is the main cause of the high level of inflation today in our country. I suspect that the status of Naira, which everybody fears, including myself, is an attempt by government and the Central Bank to manage this inflation.
If that is so, then I’m afraid they have to think again, because you see, the high level of prices inflation is not being caused essentially by excess liquidity. It’s not what you call in economic balance, it’s not the demand push inflation that we have, it is a cost-push inflation. The cost of imports of raw materials, of machinery and spare parts, the increased cost in those items is what is causing substantially the inflation we are facing today.
So, trying to mop up liquidity, in my view, is not the right thing to do. There may be other reasons for making currency in the United States, but surely, the reason should not be an attempt to manage what is essentially a cost-push inflation through what I call a traditional way of doing it.
You were just talking about how much import reliant we are, and news has just broken that Procter & Gamble, an American firm is planning to dissolve its ground operations here in Nigeria, with an estimated 5,000 people connected in terms of employment and jobs. Nigeria relies on imports of their products into Nigeria. Looking at the climate, local production climate in Nigeria, what would you say to the government if P&G, for example, is dissolving?
Unfortunately, manufacturing industry is almost dead in Nigeria, I’m very sad to observe that and because of the multiplicity of the problems that we have, unless we revive, revitalize and resuscitated the manufacturing industry, our dependence on imports will continue, and imported inflation will continue to be a major problem.
The way to revive the manufacturing industry is well known to policy makers. The first thing is power, which is the motive force. In fact, you can take the power consumption per head in an economy as a good proxy for the level of development in that economy. Power supply, both the quantum and the distribution and the reliability and the price must be satisfactory. This is very sad because when I was still in service, way back in 1980, when we prepared the third national development plan, we had projected that Nigeria should have 6,000 megawatts of electricity by 1985, that’s 43 years ago. Now, if we had done that at that time, I’m sure by now we would have around 50,000 megawatts or 100,000 megawatts. But unfortunately, that plan project was never implemented.
And today, I doubt whether we have even 5,000 megawatts, and as long as power supply is inadequate, is not reliable, is expensive, manufacturing will suffer. And production of products has to be very expensive because self-generated power is very expensive. Solar energy may come to the rescue, but the stage of solar technology development is such that solar energy is still expensive. I hope a day will come when solar energy becomes very cheap and available to everybody. But power is, to me, the most important single factor affecting manufacturing in Nigeria. Of course, there are other factors like infrastructure, like new market capital becomes a multi-population because after all, this is the market.
I have what I call the Olu falae Formula, M + M = M. In ordinary algebra, M + M should be 2M. But in my own economic algebra, M +M is =M. Meaning, men plus money equal’s market. Now, we have plenty of men and women in Nigeria, but the money in their hands is very small. So, our M plus M is a very small M, very small market. So, does the need therefore to generate employment? The unemployed people have little or no income. Employment generation will expand the market, will strengthen the market, and make it worthwhile for manufacturers to produce on this market.
So, in the first place, power generation number one, employment generation number two. Of course, of course, almighty insecurity. Many of the old manufacturers have left the country for the reasons I’ve just mentioned. Power supply and, in more recent times, insecurity. So, these are three critical things. There are so many others. Those are the three. Power, employment generation, and security.
The former Emir of Kano and former CBN Governor, Mohammed Sanusi II raised, some issues on whether or not the President should be the substantive minister of petroleum, what are your thoughts?
Well, I believe that there ought to be a minister for every important subject in government, including petroleum. Petroleum is so important to the finances of government that no president has been able to take his hands off petroleum completely. But conceptually, it is necessary and important to have a man of integrity called a minister to manage the petroleum industry on behalf of the President and Nigeria so that he can be held accountable. As the former Emir of Kano said, people are reluctant, out of respect for the office of the President to attack the policies of petroleum because they don’t want to be seen to be attacking the President. But if we had a minister of petroleum, their comments and suggestions and criticisms will be more robust. All ministers report to the President but the President doesn’t have to be minister for petroleum.
Afenifere recently met and insisted on restructuring, what exactly is the restructuring Afenifere is demanding for?
Well, if there are people in Nigeria today, after all that has happened in the last 25 years, who still oppose restructuring, it would be because they don’t really understand what it means.
What restructuring means, simply, is that Nigeria should return to the constitutional and political arrangement, which we had at independence, which served us well, which brought prosperity and competitive development all over Nigeria, which brought peace and security and stability but was lost as a result of political changes in the constitution, the civil war and all that followed. It certainly means we want to go back to that which worked for us constitutionally.
Nobody can say he doesn’t want to go back to a better past that served us well, an arrangement that served us well.
Restructuring means rearranging, redistributing powers and responsibilities and resources among the various levels of government and communities in Nigeria, such that most people will be happy, they will have employment, they will be safe in their country, they will have employment. Restructuring means let’s go back to that which we lost, that used to be good for Nigeria. I don’t think anybody will oppose that.
It was amply debated and discussed and agreed upon at the 2014 conference, that we must have a new constitution that will allow every state or region to have its own constitution, and that constitution will derive all its powers from the federal constitution, and every state will be supreme in those areas of the constitution assigned to that state constitution. Every state, for example, will have its own police force. When I was a little boy in this country, I knew three police forces. The younger generation know only one, the Nigerian police force. But I knew three, the Nigerian police force.
When Obafemi Awolowo was Prime Minister of the West, we had Western Nigerian police force. And then every town, at least, had its native authority police. So, there were three police forces in Nigeria, maintaining peace in Nigeria. I believe when the war came, I think those other police forces were absorbed into the army and nobody remembered to return them to what they used to do before the war. It has become very clear now that the Nigerian Police Force has been unable to give Nigeria a secure environment.
So we must go back to a situation where every state or region must have its own police force. That’s one. Number two, we must devolve powers and responsibilities to the states and to the local governments. We should not over-centralize everything at the center, it is not desirable in a federation.
Restructuring Nigeria requires a lot of political will, do you think Tinubu will find it easy?
We were at the barricades together. We were tear gassed together by the Abacha government before I was locked up in prison and Tinubu was driven into exile. We both suffered for these ideas, so he understands them as much as I do. And in any case, when he was governor of Lagos, he did try to implement some of those, for example, to generate electricity for the people of Lagos, that is part of the evolution I was talking about, which is the major element of restructuring.
So, a man who understands restructuring, who has fought for it, who has suffered for it, and who has tried to implement it to some extent when he was governor, clearly is very well prepared to understand it and to do something about it because he knows the benefits of restructuring for the whole of the country.
Are you asking him to dust up and implement the 2014 Comfort Report, there are a lot of people who believe there is going to be a legal, constitutional lacuna because there would be a space of time that is going to create a constitutional crisis?
There were many lawyers among us at the 2014 confab and several groups of educated, enlightened, committed, patriotic Nigerians, there is no lacuna at all. For example, there are things that can be done through administrative decision by the government. There are things that can be done by legislation. For example, after the National Assembly set up a committee on what they call a constitutional amendment, amendment for what? To bring about restructuring of Nigeria; so, there is no problem at all, provided people understand that restructuring means a better Nigeria for all of us. There are people who are afraid of restructuring only because they fear that the revenue formula that it may throw up may be of disadvantage to some parts of the country. We thought about that. Nobody wants to follow a beggar-thy-Neighbour policy in this country, we are brothers, we thought about that. We proposed that, I think 5 per cent of federal revenue for a number of years should be used to assist states with solid mineral deposits to develop them so that over a reasonable period, they will become earners of substantial revenues from those resources. Those with oil are getting large revenues now. Those with solid minerals will be assisted to develop them so that they do not suffer unacceptable revenue losses. So, we thought about all that and we don’t have to implement all this in the same day. The real rationale for the restructuring is that it will unlock the ingenuity of Nigerians. It will release the energies of Nigeria, both government and private people, to become productive and become development oriented. Nigeria has been held down by too many regulations.
Are you making a direct call to the President tonight, I am not sure whether he is watching or not, but If he is, what will you say to him?
Well, I hope and pray that President Tinubu is watching this programme, and if he is, I am saying to him with all humility that he should consider the implementation of essential components of the report of the 2014 confab for the benefit of all Nigerians. There are very many good things in that package, which I am sure Nigerians will benefit from.
For example, we have the programme of state police as part of the structure. I am sure President Tinubu will be more than happy to implement those things, to make security more effective through state police, to make the country better for development by encouraging various individuals to build roads and other transportation facilities. Time was when only government-built roads, now we have come to a stage where we can ask private people to build roads and control them so that they will be complementing the efforts of government. Those are some of the things in the report. I am sure President Tinubu will find the time and resources to implement as many of those programmes as possible for the benefit of all our people.
You are a monarch in Ondo State, the governor of the state has been away on medical leave for some months, what is your take on what is happening in Ondo State?
I, along with other leaders, have done what we thought should be done under the radar to deal with the matter. I am no longer a partisan politician. The sort of leadership we exercise now is discrete leadership. In consultation and conjunction with other leaders, particularly Pa Reuben Fasonrati, we have done a lot to reach both parties and to effect whatever reconciliation that was possible. While we did not achieve much, we made the play to higher levels in Abuja where some initiative came forth and has been able to douse the tension that was very clear to be very present in the state. So, we have done what we needed to do, and we shall continue to do so to ensure that the contending forces are reconciled for the peace, prosperity and development of the state.
Why did Afenifere endorse a presidential candidate during the 2023 presidential election?
I want to say that without humanity that I was probably the first Nigerian political leader who formally and openly retired from politics, not resigned, retired voluntarily. I did so when I was over 80 years of age. I thought I had served my time; I paid my dues. Afenifere was the other name for the Action Group, it was a marketing name, a brand name for the political party. When the Action Group was banned when the military came in, there was a separation between a partisan political party and the Afenifere which is the philosophy of welfarism. Afenifere is a Yoruba welfarist organization, and because a Yoruba person was contesting the presidency along with others, Afenifere felt it should support one of its own members, not just a Yoruba man, but one who has been a member of Afenifere for many years. Those are the reasons why Afenifere is here.