Tinubu’s economic team

As a leader, President Bola Ahmed Tinubu has two good qualities. There is ample evidence that the president listens to Nigerians and is sensitive to public opinion. There is also ample evidence that Tinubu accepts responsibility for certain matters and forges ahead regardless of public opinion. These are good qualities in a leader, and any […]

As a leader, President Bola Ahmed Tinubu has two good qualities. There is ample evidence that the president listens to Nigerians and is sensitive to public opinion. There is also ample evidence that Tinubu accepts responsibility for certain matters and forges ahead regardless of public opinion. These are good qualities in a leader, and any Nigerian president absolutely needs both.

On the first, Tinubu softened down and back-pedalled after his initial wrong-footed response to the Niger Republic coup debacle. He also removed a 24-year-old appointed to chair the board of an important agency following outcry from Nigerians. The president also bowed to public outrage by suspending a minister he probably would have otherwise kept in place. And then again, he tried to do something about the widespread outcry for cutting the cost of governance, by announcing restrictions to foreign and domestic travel by federal officials at public expense, however limited those measures may be.

On the second, the president has stuck to his guns on the removal of fuel subsidy and naira devaluation, and accepts responsibility for their consequences, regardless of adverse public opinion. As former President Babangida was once reported to have said, history may forgive a leader for making the wrong decision, but not for making no decision at all.

In that sense, it is a good thing in a leader to accept responsibility for a policy mishap and seek to find a way to make it right going forward, rather than revert to a past that is no less uncertain. The truth is that even if the government were to reverse to nullify the subsidy withdrawal and naira unification policies, inflation is unlikely to get back to former levels because the social and psychological aspects of the market have already taken hold.

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Naira exchanged for N1,350 to the dollar last week, an unprecedented—and unwanted—milestone in Nigeria’s monetary history, just five months after it hit then all-time low of N1000 per dollar, a 35 per cent further depreciation since late September, despite billions of dollars in borrowings. This is a clear indication that the two policies are not working as predicted and that the government really has no idea how to get out of the situation.

Thus, at present, Tinubu faces one overarching economic policy challenge: How do you make fuel subsidy and naira unification work well enough to significantly reduce inflation, keep prices stable, boost forex liquidity and still have some savings to plough back into social investments like education, health and infrastructure? This one question, born of many, is the Sword of Damocles that hangs around the president’s neck and that of his government.

This brings me to my main point today. President Tinubu might be good at listening to Nigerians or accepting responsibility for his government’s actions when the situation calls for either, but he also appears to be really bad at appointing an economic team. The period in which the naira has fallen to its lowest and inflation to its highest in decades also coincides almost precisely with the appointments of the troika members of Tinubu’s core economic team:  Wale Edun as Minister of Finance and Coordinating Minister of the Economy, Yemi Cardoso as the Governor of the Central Bank of Nigeria (CBN), and Dr Zacch Adedeji as Chairman of the Federal Inland Revenue Service (FIRS).

What have they so far brought to the table? All three are distinguished by having served as cabinet members at the state level: Edun and Cardoso in Lagos with Tinubu, and Adedeji more recently in Oyo. Edun and Cardoso have also both held high positions in the corporate world and had established and run successful businesses of their own. Adedeji has a well-packaged resume, but is no match for the other two in terms of experience or concrete achievements on the ground. And politics and cultural capital aside, he is probably no match for the office either.

Yet, by appointing all three men to their respective positions at the same time, Tinubu appears to believe they can each replicate their much-touted successes at the state level. This, I think, is Mistake Number One because the Federal Government of Nigeria is a different animal from any of its federating state governments. Nigeria is not Lagos, and success at the Lagos State level years ago is absolutely no guarantee for success in Abuja.

Second, given their respective resumes, the roles of Edun and Cardoso should probably have been reversed. Don Cardoso, as he is called at the CBN, was a commissioner for budget and planning in Lagos, a position that, in my view, approximates closer to Nigeria’s federal minister of finance, particularly given the functions of his office at the time. Cardoso’s formal training in Accounting, Management and Public Administration also seems better suited for dealing with fiscal issues at the finance ministry. On the other hand, Wale Edun has formal training in economics, which by itself alone, not to mention that he was first named as adviser in monetary policy, makes him a better fit for the CBN.

But my real point is that since all three men come from the same corporate world, with little more than state-level public sector experience, Tinubu should really have had just one of them fill any of the three roles while complementing their skills and experiences with other people from more diverse backgrounds. In addition to either Edun or Cardoso at the CBN or finance ministry, for example, the president really needed someone with a thorough background in political economy, public policy or economic history at the other office.

Tinubu’s economic team now is like having three wraps of amala in a single meal: your stomach will be full, but you are still eating the same thing. Taken as a whole, Cardoso and Edun really bring more or less the same things to the table in terms of background, training, experience, and probably even contacts at the international level. Adedeji is also of the same ilk, although across all metrics here, he falls far below the league of the other two.

The point then is that with an economic team so narrowly constituted, the president is not well placed to deal with the economic policy challenge of the moment as identified above. There is ample evidence of this too. Neither Edun nor Cardoso, nor yet Adedeji, has really come with many solid ideas that point the way forward. Yet, what the moment calls for is not decades of experience in banking or finance, however useful those may be, but originality of ideas and serious contacts in the global world of economic knowledge and money. The government appears stuck now precisely because the economic team has fallen short in these two most crucial criteria required for the moment.

What is the way out? It is perhaps time Nigeria really had a serious Economic Advisory Council as a formal organ of the government supported by legislation. The president can look anywhere in the world, including among non-Nigerians, and appoint up to 11 or more persons drawn from diverse backgrounds to the Council not only to advise him on how to better deal with the current issues, but also to actualise their advice. Sometimes in the life of a government, what is needed is to borrow ideas and people, not money.