Business
Why I didn’t become CBN deputy governor – Chizea
Economist and business development consultant, Dr. Boniface Chizea, in this interview with Okay Onyenweaku and Emeka Ejere, argues that moving Nigeria forward requires right step at the right time and round pegs in round holes.
Excerpts
To what extent do you think the Naira-for-crude policy can bring a form of succour to the local currency?
Well, it’s wrong for us in Nigeria. We’re not supposed to deal in dollars in Nigeria. It’s against the law. Dollar is not a legal tender here. One of the advantages we’re expecting to gain from Dangote Refinery, which explains all the hopes some of us invested in the refinery coming on stream is now being called to question. We expected that things would get much better, but it has been worsened. The pump price increased more than what it was. That wasn’t the expectation.
So, the challenges we have is that we’re not doing the things we should do when we should do them. That’s the main challenge. So Dangote said should we or should we not sell in naira? Yes, we will sell in naira. So, we have that window. But that’s what we expected should happen, because we kept on saying that when will Dangote come on stream, that, at least, about 30 percent of the foreign exchange we have in this country is spent on importation of petroleum products.
So, it’s simple logic (101 Economics), that with Dangote Refinery in place, we’ll now save 30 percent of our foreign exchange. So, for us to go back now and be talking about paying Dangote in dollars is not something we should be talking about. It shouldn’t be there.
People have argued that Dangote is going to pay so many people (foreigners) in dollars. But he exports. I think he’s producing about 350, 000 barrels now. He’s supposed to produce and then export. And Dangote also has domestic expenditure.
So, the staff he has I don’t know if he pays them in dollars. They should be getting naira because they’re spending naira here. You’re talking about Indians, maybe, as an incentive he may be paying them in dollars, but that is in breach of the laws of this country. Yes, dollar is international currency, but it’s not supposed to be spent here the way you spend naira.
When this government came on board – May 2023 – the price of fuel, I still remember, was N197 a litre, and this is last year. And now it’s about N900 or so, and nothing has happened in this economy that should warrant that magnitude of increase.
And we’re struggling now, I hope God we helps us to manage it somehow. If we don’t come out of what we’re having now, very soon we’ll start having scarcity. We are complaining now about prices. It can get to a stage, those who’re buying cannot buy. Today, if you go to Ebeano (supermarket) across the road, there’s nothing you cannot get there. You can complain about the prices, but it’s there. What we’re saying is that it will get to a stage, if you go to Ebeano, the shelves will be empty.
Government has a target of achieving $1 trillion economy. Do you think it is the recapitalization of banks that will help us achieve that?
Bank recapitalization, what it does is to empower the banks to do more business and to make the banks a bit more stable. That’s what recapitalization does. There’s nothing like you shouldn’t lend one person beyond a certain percentage of your equity capital. It gives them greater capacity to do business. Bank is supposed to be for financial intermediation. It is supposed to get money from those with surplus to deposit and give to those, who want to borrow. They’re not supposed to go and bring money from shareholders and then take that money and begin to lend people. So, bank recapitalization, I don’t think, could help.
But if we get our act together and things begin to flow in the same direction, I think that will have more effect. But going from about $430 billion to $1 trillion – like twice – is a tough call, because where is the growth coming from? We’re talking about reforms.
We’re even trying to stabilize, see if we can stop the decline, or if we can slow down the decline. That’s the most we’re on now, anybody that tells you that we’re trying to push for growth now is a joker. Because we’re struggling, people are suffering. There’s hunger. I can’t remember when last we were like this, when people are beginning to commit suicide, people cannot eat. I can’t remember.
Considering all the works you have done, all your contributions, do you have any regret that the country continues to slide?
By 1996 I was nominated as deputy governor of central bank, before I left UBA (United Bank for Africa). Omosola took my name and gave it to Abacha, and they saw it, first-class in Mathematics, the man was excited. If I tell you how many times under Buhari and Jonathan similar things happened.
Under Jonathan, Elumelu and Co took my papers to Jonathan. And Jonathan said okay, let’s see second term. And he did not go second term. And Buhari came, Mutallab, who was my boss at UBA, who when I was there was always saying this man is very competent, he’s from Daura, carried my papers to Buhari. How many times did my name go for clearance?
Until you have somebody, who is very strong politically behind you. These people were pushing that this is a competent person. But some other people, who, perhaps, are in better positions to push you, they will not push you, because they know if you get there, you will not dance to their tone the way they want it. They know if they push me, there’s a limit to their influence on me. They know I’ll want to be professional. Well, I don’t have any regrets. Thank God for today. I’m a Christian.
