Total Pageviews

Monday, July 25, 2011

DISSECTING JONATHAN ECONOMIC TEAM


          One important feature of American's democratic governance mechanism that has been exported to other countries of the world is the simple inclusion of academic scholars and technocrats in running of an elected government. This has now become a tradition followed by every American government. The academics and technocrats are invited so that those in government who are mostly professional politicians would benefit from these scholars' expert knowledge in various areas of knowledge. It has become the norm to have Science adviser, Economic adviser, advisers on Nanotechnology, Space, information technology, or any new growth area. Coming back to economic team, Presidential economic advisers are usually renowned economists, some are Nobel laureates like Paul Samuelson, Milton Friedman, Joseph Stiglitz, James Tobin or applied Economist like retired Bankers and investors. In Nigeria the process of constituting an economic team reached it pinnacle during the civilian tenure of Obasanjo, when on the advise of multinational institutions (so it was said) Obasanjo brought in the like of Ngozi Okonjo-Iweala, Chukwuma Soludo, Mansur Mukhtar, Billionaire Aliko Dangote from the business community and El Rufai (though not an economist, but he was charged with the running of Bureau of Public Enterprises), to form his economic team. The economic team was later to be credited with putting the country on it current course of free market enterprises, that sow the seed of  among other things Banking sector consolidation, debt relief, privatization of public companies, and liberalization and deregulation of the economy.

 
       From the look of things over the past months, Jonathan is going back to the same Obasanjo model in constituting his economic team. But, this should not come as a surprise to any one, as Jonathan regime is an offshoot of Obasanjo's government. One common factor between them is their obsession with people with foreign education or experience. It is rightly or wrongly belief that their inclusion will be welcomed by foreign institutions, thereby, attracting favors. The return of Okonjo-Iweala to the Ministry of finance, and the transfer of Olusegun Aganga to the Ministry of commerce and investment, is done in order to further this course. For example, the like of Shamsudden Usman, Ngozi Okonjo-Iweala, and Olusegun Aganga had gotten their higher degrees either in America or England  and worked their as well. But, the current CBN governor Sanusi Lamido (just like his predecessor Chukwuma Soludo) had his Economic degrees from a Nigerian university but like Soludo that does not reduce him in any way  when its comes to the job he is tasked with. Despite their not having foreign degrees Sanusi and Soludo were liked by international institutions who at one time or the other praised their management of the economy. The Bureau of public enterprises and the Debt management office, even though they have not feature so often in the current economic team as it happened during Obasanjo regime, but still have important role to play in the new economic management frame work. Mansur Mukhtar at Debt management office and Nasiru El Rufai at Bureau of public enterprises were two people that have contributed a lot to Obasanjo’s management of the economy and privatization respectively.



        Which type of economic team is this Jonathan team? Or to be more specific, what should we expect from a team that comprises ex-World Bank Managing Director, former investment banker from Goldman Sachs, a radical former managing director of Nigeria’s biggest bank, ex deputy governor of the CBN, as well as occasional counsels from members of Nigerian Economic Society. As you might have grasped from the previous paragraphs, people should not expect the reversing of Obasanjo’s continue liberalization and deregulation of the economy consistent with free market policies advocated by major international financial institution like the IMF and World Bank. With the current talks on the prospect of Nigeria surpassing South Africa as forecast by Morgan Stanley, or about Nigeria joining of league of 20 largest economies in the world by the year 2020 as was the prediction of Goldman Sachs some few years back, as well as the issue of foreign direct investments, these predictions will continue despite the fact that the environment for these is yet to be created. As things stand, a planned economic system (i.e. continue domination of the economy by government) as advocated by labour unions and other groups in such matters as fuel subsidy, subsidizing of education, farming and electricity would give way for free market policies. But if President Jonathan would allow the members of Nigeria’s economic society (NES) to have much says, the free market supporters in the economic team will face some opposition, as conservative economists among NES members may likely push for guided deregulation and moderate liberalization. The tasks ahead of this team are enormous, for example for Nigeria to reduce the current level of unemployment to half it present size, it will require trillions of Naira of investment in power, roads, rails, export expansion as well as human capital development. With power supply as it is, roads in bad condition, insecurity the order of the day, the few functioning industries in comatose state, and inflation still in double digit, it will take a miracle for Nigeria to meet any of the forecasts from these two global investment banks. I will advice that Jonathan and his team shall start by going on excursion to countries such as Mexico, Turkey, Brazil and South Africa in order to learn from their experiences on how to leap frog a comatose economy.



            Looking at the economic team one by one, Mrs Ngozi in finance ministry has the task of ensuring fiscal and budgetary discipline which past Nigerian regimes including this one lack. There are indications that Ngozi purview will not only be restricted to the finance ministry as it is said that she is going to be on the top of the economic command, sort of Oga at the top. But in order for her work to be easier, she will very much need the cooperation of Sanusi the radical CBN governor. Sanusi has two major tasks apart from the restoration of confidence in the financial sector; these are fighting of inflation which so far has become difficult for him and the maintenance of foreign exchange stability. If he can deliver on this two the better for the economic team, especially for Aganga who is charged with the responsibility of attracting foreign investors and maintenance of sovereign wealth fund. Jonathan (it was said) is hoping that Aganga vast work experience as former investment banker with Goldman Sachs, a world recognize investment bank, would help in increasing foreign investments coming to Nigeria. But many analysts see Aganga and Shamsudden who is in charge of National planning as the slow-motion-types, which might not be applicable in case of Ngozi and Sanusi. As the minister in charge of national planning, Shamsudden is still battling to put a clear blue print for the realization of Vision 2020. For which, he continue to tell us tells that it is not out of reach of the country despite the evidence to the contrary. But Dr. Shamsudden has his own advantage too, because planning is not compatible with speed, the kind of speed Ngozi’s World Bank demanded from our economic team.