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Monday, July 25, 2011

DISSECTING JONATHAN ECONOMIC TEAM

One important feature of American democratic governance that has so far been exported to other countries of the world is the inclusion of academic scholars and technocrats in the running of elected government which has now become the tradition of every American government. The academics and technocrats are normally invited so that those in government who are mostly professional politicians would benefit from their expert knowledge in various areas of knowledge. It has become the norm to have science adviser, economic adviser, or more specific, adviser on Nanotechnology, space, information technology, or any new growth area. Coming back to economic team, presidential economic advisers are usually renowned economists, some Nobel laureate like Paul Samuelson, Milton Friedman, Joseph Stiglitz, James Tobin or applied economist like retired bankers and investors. In Nigeria the constituting of economic team reach it pinnacle during the civilian tenure of Obasanjo when on the advise of multinational institutions (so it is 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), when he was charged with the running of Bureau of Public Enterprises, to form part of his economic team. The team was later to be credited with putting the country on it current course of free market enterprises that saw 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, which should not come as a surprise to any one as Jonathan regime is an offshoot of Obasanjo government. One common line is the obsession with people with foreign education or experience, as the belief is that their inclusion will be better welcome 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 their higher degrees either in America or England  and worked their as well. The current CBN governor Sanusi Lamido 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 task with. Despite their not having foreign degrees Sanusi and Soludo were highly favored by international institutions who at one time or the other praised their monetary management of the economy. The Bureau of public enterprises and the Debt management office, even though they may not feature so often in the current team as it happened during Obasanjo regime, 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 Fiscal 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 counsel from the members of Nigerian Economic Society. As one will have grasped from the previous paragraphs, one 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 beating of drums on the prospect of Nigeria surpassing South Africa as forecasted by Morgan Stanley, or Nigeria joining the league of 20 largest economies in the world by the year 2020 as was the prediction of Goldman Sachs some few years back, the furor created tempo of generating foreign direct investments, or the country becoming the hub of this or that will continue even if as we all know the environment for all this is yet to be created. As things stand presently, plan economic system or continue domination of the economy by government as advocated by labour unions and other concern groups in the form of fuel subsidies, and government continue subsidizing of such things as education, farming and electricity will have to give way for free market policies. But if Jonathan would allow the members of Nigeria’s economic society (NES) to have much say in the team, the free market policies advocates in the team will not have all they want, as the neo conservative economists from among NES members may push for guided deregulation and moderate liberalization thereby slowing the face of the move towards free market ideals.
      The task ahead of this team being put together by Jonathan is very 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 in inflation still in double digit, it will take miracle for Nigeria to meet any of the forecasts of these two global investment banks. I will advice that Jonathan and his team should 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.
            Taking each important member of the team as he/she is, Ngozi in the finance ministry has the task of ensuring fiscal and budgetary discipline which past Nigerian regimes including this one lack. There are some 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. But in order for her work to be easier she will very much need the cooperation of Sanusi our 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 his sovereign wealth fund. Jonathan (it is 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-type, which you may not say of Ngozi and Sanusi. As minister in charge of national planning Shamsudden still battle to put into shape a clear blue print for the realization of Vision 2020 which he continue to tell us is not out of reach of the country despite evidence to the contrary. But Shamsudden has his own advantage too because planning is in most cases not compatible with speed, the kind Ngozi’s World Bank will have demanded of our economic reforms.

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