AGBAJE: Government Can’t Be Effective Without A Cabinet

Opeyemi Agbaje is the chief executive officer (CEO) of RTC Advisory Services Limited, a strategy, policy and economic consultancy firm. He spoke with TEMILOLUWA ADEOYE on why President Buhari should quickly take control.

It has been over a month since president Muhammadu Buhari mounted the saddle and up till now, we don’t have a federal cabinet; what is the economic implication of this to the country?
THE bigger problem, from my point of view, is that after the swearing in, we expected not only the cabinet, but some critical appointments, so that the government can take control of the machinery of governance, Chief of Staff, Secretary to the Federal Government, National Security Adviser, Political Adviser, Adviser on National Assembly. Then, apart from these key appointments, we have two spokesmen, but that is neither here nor there.

Apart from that, the bigger problem from economic point of view is that there has been no statement or substantive pronouncement on policy, on the economic direction and management for one month. Of course it has significant impact on the economy. If you look at the capital market for instance, that is the best indicator. Immediately the president was elected and elections went peacefully, there was appreciation on the capital market, a significant gain because the market was excited. The market had been discounted because of fear of political risk, what would happen? Immediately that was cleared, the market rose up, but then it now stalled. Even before the swearing in, investors were expecting statements that would show the direction of government. But they didn’t see anything, so it stopped appreciating; now it is falling. That is the clearest indicator yet. Markets, investors, economic activities are now beginning to take a pessimistic view, because they don’t have a cabinet or policies, they don’t have an idea of where they are going, they have not seen the policies that they think should be taken. So now, it is going down.

It is the same thing in the forex market. Immediately the election was concluded, exchange rate dropped. All the panic of taking money out of the economy stopped, and the exchange rate appreciated. Then they waited and there is nothing. Now, what is the exchange rate today in the parallel market? It is N230. It is higher than it was before the elections. So, investors are fleeing again. Money is going out, we don’t know where it is going. Bloomberg did an article on baba; from being the symbol of change in Nigeria, Buhari is now Baba go-slow. I am very concerned that we shouldn’t loose this opportunity. This is beyond politics. Whether you voted or not, supported or not, it turned out that we now have an opportunity, the whole world was positive; capital market went up, foreign currency went down. So it is critical that the government names his team.

Nobody is going to accept globally that you want to run an economy without a finance minister, chief economic adviser. Nobody will accept that you are going to do a good job without a minister for trade and investments, or a minister for petroleum. The investors don’t even know who to talk to. Are they all going to be meeting civil servants or permanent secretary? No. It has grievous impact on the economy
Some economists have attributed what is going on at the forex and capital markets to excess liquidity, do you share the same view?
There may be a little factor of excess liquidity, because the last monetary policy meetings reached some decisions that possibly marginally increased liquidity, but I don’t think this is about excess liquidity. There is confusion around policy. It is more about sentiment; I think sentiment is turning pessimistic and it is clear. For me the bigger impact is from confidence, vacuum around policy and direction, the absence of leadership of the economic sector.

The National Assembly too appears to be unstable, the year is almost half gone without anyone performing oversight function on the budget implementation, what is the danger of this?
Well, we can’t even talk about revising the budget because if you look, there is a dissonance. One of the things we thought would happen was a quick review of the budget, and a supplementary budget to now factor in the realities of this government. But there is nobody to do that job; there is no minister of finance, no minister for economic planning, no special adviser for budget, no team.

So, we would have to presume that this government would run this budget for the rest of the year.

There is no sign, at least now, based on what we are seeing that there will be a supplementary. The second point is that hints are being dropped and I believe it is from the presidency and those close to him, that we shouldn’t even expect ministers until September. The country is being run by civil servants, the bureaucrats. You will notice that every appointment is now being made by the Head of Civil Service.

Not by the Secretary to the Federal Government, because typically, it is only civil service appointments that should be made by the Head of Civil Service. Political appointments should be made by the Secretary to the Federal Government.

So, I think it is beginning to look like a weak start and I hope that there will be a quick recovery. What we have may begin to look like drift. You spoke about the National Assembly, my sense is that nature abhors a vacuum, especially in respect of political power.

Once there is no action from the top, other people will take control of the system and that may be what has happened. So, people have struggled for power, and those power struggles are going to be spreading across because there is no direction from our government.

So, there is a power struggle in Senate, House of Representatives, in the security services over control of Aso Rock. So, it is the symptom of a problem, and the problem is that leadership needs to exert control of the system. If leadership doesn’t, other players will struggle for power and it will spread into the civil service, police, everywhere. I think the president would have to delegate more functions, perhaps to his vice president, so that the system can function.

If the National Assembly is not stable, can we expect the Executive arm to be stable?
Well, it is obvious. We’ve had essentially two sittings in the National Assembly. First day in the Senate, they sprung a surprise on the entire system and elected the president of the Senate and deputy, then they adjourned for about two weeks or so. Then they met again and chose the Majority Leader, and they adjourned again for a month. Also at the House of Representatives, there was a big fight and they adjourned. So it is currently dysfunctional in its current state because you have a deep split in both Houses, across parties. I do not see in its current state, the House of Reps being able to have a meeting, talk less of monitor the budget or do any legislative function.

My hope is that they will quickly resolve and everybody would deescalate tension. This is not what they were elected to do. Their parties should also get itself together.

Hopefully, they will understand the scale of the disappointment of Nigerians. The international community is watching this unfortunate state and they will step back. There is no gain saying that in its current state, it is not going to perform any legislative oversight, when they can’t even sit down and have meetings. By the time both Houses meet next, it will already be the end of July, and there will be Summer holiday, then they will go away till September and then they will resume late in September, next is Christmas.

Do you think by not having a cabinet is another way to minimise cost?
I don’t think that is an acceptable argument. Imagine a company Chief Executive Officer minimises cost by not appointing Executive Directors, General Managers, and then he is now running the system with operational or unit heads. You don’t minimise cost that way. First of all, you need policy; those people you are running the system with are not policy makers. They are operational heads; civil servants do not define policy.

They look up to political heads to define policy. It is government that defines policy, then civil servants implement. Yes, they advise on the formulation of policy, but they never make policy choices, it is not their role. So they will wait for you to tell them what to do. If you don’t tell them what to do, they will just keep the system running on autopilot, on operational issues, paying salaries and supervising regulatory functions. And if you ask them to formulate policy, especially in a weak policy environment like Nigeria, they would formulate policy for their own benefit, not for national interest. So that cannot be an option.

You cannot save cost by not appointing ministers. Yes, we can rationalise the numbers of ministers we will appoint, we can make effort to appoint the right people, we can make decisions about remuneration, we can do those, but we cannot save cost by not appointing ministers. You can’t run the country without having a Minister of Finance, Attorney General of the Federation, Minister for Investment and Trade, a minister for communication, Internal Affairs and all of those things without a political head. You can’t run an economy in that manner.

Do you see any constitutional issues arising from this delay?
The constitution mandates the president to appoint ministers to assist him in the running of government. The constitution makers understood that it was impossible for an individual to run government as a president and vice president alone. So ministers are mandated by the constitution. Of course, the constitution also says you appoint a minster from each state. The constitution expects us to have 36 ministers, but not 36 ministries. That is a constitutional issue. The constitution expects you to have an Attorney General of the Federation. There is also an assumption that there will be a minister of petroleum, which act gives much responsibility to the minister. Many statutes assumes that there would be a minister of internal affairs in relation to customs and excise, immigration and all of those functions under the minister of internal affairs. Of course, the constitution will create a process by which a president is elected, nominates his ministers, and forward them to the Senate. There is an assumption of a reasonable time for all of that process to take place. But beyond the reasonable time, I do not think that the constitution expects the president or vice president to run the government alone in conjunction with civil servants.

Documents would be operationalised into a policy document, which civil servants can now look at under the direction of political heads, which are the ministers and other political appointees. So the civil servants, don’t have any policy direction yet as it is, and that should be remedied quickly.

Some people believe that slow and steady wins the race; can this be the case with president Buhari?
Well, I don’t question that principle, but I think that in the current circumstances, I can see slow, but I can’t see steady yet. Steadiness means you are moving in a deliberate and precise but assured manner. I am not against slow and steady, but doing what? You have to be heading forward and I don’t think its steady, if you don’t have a Chief of Staff or a National Security Adviser.