Enelamah’s tough but tactful BBC interview
I was going through the day’s newspapers over a meal one evening early this month, when I heard a voice on the BBC talking about President Muhammadu Buhari and Nigeria. Was it an interview with the president or a commentary? I went to the sitting room to check. Well, it was the minister of industry, trade and investment, Okechukwu Enelamah, on the BBC “Hardtalk” programme. I have written a few times in this column about the minister and his ministry, but had not heard him speak before. So, I put everything else aside to watch the interview. It was a gripping, stimulating and enjoyable (at least for me!) encounter between Enelamah and his BBC interrogator, Shaun Ley.
For those who didn’t know, the BBC Hardtalk programme is not for the fainthearted. It is not called “Hardtalk” for nothing! If you appear on the programme without being sure-footed, you will emerge ashen-faced and crestfallen. The interviewer’s forthright and abrasive style will leave you feeling bruised and intimidated. But, overall, Enelamah acquitted himself admirably! He was eloquent, articulate, confident and unfazed. He held his own, despite Ley’s onslaught of difficult questions and constant interruptions. Yet, rating Enelamah’s performance as impressive doesn’t mean that I agreed with him on the issues! I do, in fact, have difficulty with some of his rationalisations in the interview.
In my view, there were two Enelamahs who appeared on that BBC programme. One was a technocrat, with long standing private sector experience, who understood the imperative of an open and competitive economy, and, in fact, articulated some bright ideas during the interview. The other was a government minister, who constantly rationalised or defended, rather unconvincingly, what the interviewer rightly called “some pretty hopeless decisions” of the Buhari administration.
The interview basically had two damning lines of questioning. The first was that President Buhari sat on his hands while the economy struggled, like fiddling while Rome burned, by refusing to appoint ministers six months after coming to power, despite a tottering economy. The second was that, even after Buhari formed a cabinet, his government took “some pretty hopeless decisions” that further damaged the economy. The minister disagreed with both criticisms, but his rationalisations were mostly unconvincing to Ley and, dare I say, to me!
Take the first criticism. Enelamah defended President Buhari’s refusal to form a cabinet for six months after taking office, arguing that the president wanted to appoint ministers “having understood first what he was getting into” and having had “round pegs in round holes”. Then, he pronounced that“ with the benefit of hindsight, the president’s decision will turn out to be the right one”.
This was, of course, a political answer from a government minister. But it does the president little credit to say that he, a former head of state and four-time aspirant to that office again, albeit in a civilian capacity, needed six months after assuming office to figure out “what he was getting into”. That argument, in any serious democracy, would call into question the president’s preparedness for the office. Even worse, when Buhari eventually appointed his ministers, they turned out to be, with very few exceptions, of middling abilities. Desperate times call for desperate measures, but President Buhari failed to assemble a cabinet fit for the crisis-level challenges that Nigeria faces. I mean, barely one year after being inaugurated, there is already a groundswell of public opinion that the cabinet should be dissolved. Why? Its performance is lacklustre; a low-energy cabinet! Hindsight, surely, hasn’t vindicated the president’s decision: there are too many round holes without round pegs.
What’s more, the delay came with a heavy price. As Enelamah rightly pointed out, investors hate uncertainty, but what uncertainty could be greater than a country in serious economic crisis having no finance and economic ministers for six months? Attracting foreign investment is like a road show or a job interview, first impressions matter! And investors pick up political signals and form a view pretty quickly. Unfortunately, the signal sent by President Buhari’s six-month “one-man show”, characterised by a policy lacuna in the midst of an economic crisis, was that Nigeria’s new president was insensitive to economic and market sentiments.
Enelamah argued, correctly, that foreign investors were already cautious about Nigeria before the 2015 general elections, and that when Buhari came in, they waited to see what he would do. That was a fantastic opportunity, as I wrote then, for the new president and his team to hit the ground running and send out positive signals, such as announcing or at least signalling the announcement of a package of far-reaching economic reforms. But what did President Buhari do? He slammed the world with a six-month hiatus in governance, a period of indecision and uncertainty, which set a bad policy tone and spooked investors and the markets. The damage done to investor confidence by this bad start was compounded by subsequent illiberal policies. That was the context of the BBC’s second criticism.
Essentially, Shaun Ley, in the Hardtalk interview, accused the Buhari administration of not only failing to act earlier to stave off a recession, but of taking – that phrase again – “some pretty hopeless decisions” that triggered it. On top of his list was the decision to control foreign exchange and peg the naira at 198 to the dollar. Enelamah responded that the Buhari government inherited the fixed rate, adding, “and, frankly, we have taken the decision subsequently to liberalise the currency”. Butthat missed the point, Minister! The point was that the government inordinately delayed the inevitable; it didn’t act for almost a year, until the economy had virtually collapsed, billions of dollars of investment had left the country and private capital had stopped coming in. Talk of fiddling while Rome burned!
Of course, Enelamah understands the issues and has the right instincts. He argued, for instance, that Nigeria must get its macroeconomics rights, including monetary, fiscal and structural policies; and that government “should be an enabler and a helper, not adversary …” But before he completed that statement, the BBC interrogator interjected. “And it is not, is it? I mean, why, in the teeth of a recession, is the government punishing companies”. He brandished a piece of paper before the minister. “Look, for example, this list of 41 products that if people import they are not allowed to have access to foreign exchange”. This was where the interview became both hilarious and poignant.
The minister said the forex ban was an example of “a classic dilemma”. But Shaun Ley was not interested in hearing the dilemma. “What is the point of this list?”, he pressed, needling the minister for an answer. Enelamah insisted on explaining “the dilemma” and, eventually, had his way. He said the government came up with the list to “spur local production”, but that it has had“ unintended consequences” because the list included some input raw materials! The government, he said, was trying to “identify those items which are raw material inputs to make sure they are not stopped from coming into the country and that the forex to import them is also made available”.
This was a classic muddle! Why was it not obvious to the government, ab initio, that the infamous list, produced by some clueless civil servants, would have unintended consequences? Surely, one of the problems with government interventions is that they usually have unintended consequences because government official slack the market information and even the right motives to make decisions that affect businesses and the markets. Secondly, as soon as the CBN published the list in June last year, Nigerian manufacturers pointed out that it contained several intermediate goods. So, why is the government still talking, in October 2016, of trying to solve a dilemma that it created?
Two patterns of behaviour have emerged from the Buhari government. First, it makes policy on hoof, muddling through, without sound analysis and evidence, and, second, even when it is clear, crystal clear, that a policy is damaging the economy, it dithers, doing nothing about it, until things get really bad! As it was with the failed forex regime, so it is with the discredited CBN forex ban list. The BBC interviewer asked Enelamah whether he thought it is right for the government to direct the economy in this way to stop imports, he responded: “I don’t think it’s necessarily right”. But, when asked, “So, are you going to scrap the list”, the minister demurred.
To be fair, Enelamah had a tough balancing act to perform on the BBC programme. Although a technocrat with the right instincts, for instance, espousing economic openness, he also had to defend the barmy policies of the government of which he is minister. It’s naïve to expect him to disagree with his government’s policy on the BBC. Yet he knows that banning or restricting imports to spur domestic production is extremely old-fashioned and counter-productive in today’s globalised world. He also knows the power of signalling; that the list of 41 products has become globally infamous and emblematic of the Buhari government’s dirigisme. It is punishing domestic companies and harming Nigeria’s image: it has to go!
Olu Fasan