Prince Adetokunbo Kayode, SAN is the immediate past president of the Abuja Chamber of Commerce and Industry (ACCI). He is also a former minister of defence, culture and tourism, Labour, and Attorney General/ justice minister. In this interview shortly before he left as ACCI’s President, Prince Kayode said the federal government’s failure to diversify the economy left it vulnerable to a decline in oil price and COVID-19 pandemic which led to the economic recession.
What does the current economic recession mean to ordinary Nigerians?
A recession is a technical term for when a country, a region, or the world is not performing up to particular indexes, like the growth rate is kind of negative. When the growth rate becomes zero, when it’s flat, you are out of recession. Immediately it climbs above zero, let’s say 0.1 per cent, you are out of recession. So, it’s just a technical term.
It simply shows that the economy is not working. You cannot meet your cost, you cannot meet your key responsibilities and you are not making progress. Yes, Nigeria has entered its second recession in as many as five, six years and the reasons are very obvious. Our economy is the most transparent economy in the sense that our foreign exchange is principally sourced from a single product. That’s why we are called a mono-economy, a single product economy. So, immediately after the price of oil crashed late last year, we knew we were in trouble.
To complicate matters, the COVID came in, which itself is a recessive condition. Nigeria was projected to do about 3.5 per cent growth this year. We knew that we were going to get into the negative because this impact is across the board. It affects everybody.
How soon will Nigeria come out of it?
Nigeria will come out of this recession. Soon, I don’t see why not if the oil price goes up a little bit and if we have good rains and agricultural output will assist Nigeria to stabilise the economy. But the most critical thing is not whether we come out of the recession, but making sure we don’t slide back into it because going in and out of recession is a typical, normal economic experience. Will we come out of it, but we will go back again unless we learn lessons from the reasons for going into recession.
What do you think caused the current recession?
We have failed to diversify the economy. The government has been singing about diversifying the economy in the past 10 to 15 years now; we have not yet done it. If we had, we would not be in recession today. We may have reduced growth rate, instead of doing five or six per cent, we may be doing one to two per cent. But we would not go into recession. So, whatever anybody may say, we have not diversified the economy. We have to do that.
How should Nigeria diversify the economy?
Agriculture is still dominated by the federal government. It will never work. This idea of focusing on rice is again trying to create a mono-economy within the agricultural space by talking only about rice. We don’t export rice. We eat rice. And we expend so much energy and time on rice whereas there are a lot of other things that we import and eat. We have to target not only the products that we consume, like rice, but products that in the past we used to shore up our foreign exchange inflow like cocoa, groundnut, palm oil and now, beniseed and a lot of other things. We have to actively and deliberately increase the output. And this can only be done at the state level; not from Abuja. So, how do you do that at the state level? By using the National Economic Council (NEC) – it was the creation of the constitution and it is deliberate. The structure of our constitution is such that the president will handle politics. The vice president will handle the economy. It pains some of us that the leadership of the country does not understand that. Leave the work of the economy to the vice president. And he must take it very seriously. The economy affects everybody; the economy is based on the states performing. That is why it is mandatory for every governor to attend NEC meetings and come up with ideas on how to develop the critical sectors.
We can use agriculture to diversify the economy. The same theory applies to minerals. There is no state; about 32 states have minerals in commercial quantity and at least one, which we can concentrate on. Not only mining and export; there is what we call beneficiation; you have to add value to it. When you export raw minerals to India, and in exactly 90 days, India sends it back to us processed and we pay 10 times more than we got from the raw material. So, agriculture and mineral sectors must be taken as seriously as most import sectors.
What is your take on the high unemployment rate?
We need to get people off the streets. There are too many people in the streets. You can see what happened; this EndSARS thing. It shows the three divides in Nigeria: the government and the so-called big people in the country, the young people in the offices and the young people in the streets. There is a big divide and you can see it very clearly. Government could not talk to the young people in the offices. They said they would do EndSARS, but the boys in the streets took it over and everything in Nigeria went to hell. It’s a big challenge but it was a very interesting challenge. Government must begin to understand that it must engage the young people in the offices who have education and jobs, but who are not satisfied with what is going on. Two, it must also find a way to engage the people in the streets. That’s one level. The second level is that the young people in the offices must too find a way to create a bridge between them and the people in the streets.
Create these opportunities: allow agriculture to work, allow processing to work. Every agricultural process in Nigeria has a lot of value chains that could create opportunities for young Nigerians to be gainfully employed.