A very interesting report from a United Kingdom (UK) commission that examined why Brexit happened was summarised and published in a book called Prosperity and Justice. The book summarised that prosperity and justice must go together, otherwise, the economy that is not working for the majority will produce consequences one day. And that is what led to Brexit.
For example, many people found it strange when I say Ruga is not a Fulani word. So, why the controversy? The controversy came because something more profound sociologically is taking place. We are a nation angry with one another because of the failures, because of the fault-lines. We have refused to accept that we are a little economy. So, how do we become big, so that we have an economy that works for all? Our sociological reasoning escapes even our historical realities. Why were Ife and Modakeke fighting each other on land? They are not Fulani versus Yoruba. Why are Tiv and Jukun killing each other as we speak now? It’s not Fulani versus Hausa. Why are thousands of people dead between Cross River and Ebonyi as we speak? I’m sure if you go to any court system in the 36 states, land issues constitute a significant amount of complaints. So, let us stop getting angry with each other. Let us solve problems, especially problems that have been created by climatic change, by natural progression as a result of our population.
The four-year old child following an animal – believe me, some of them walk 20 kilometres a day – has an identity problem. My maternal grandfather was a cattle rearer. We used to tease him by asking him which village he was from. He didn’t have a village. So, you can imagine that since as early as four years of age, that was his life. He has not gone to Arabic school; they don’t. They don’t go to formal schools. And what does he experience when he’s working with animals? It would rain on him and his clothes would dry on him. That is why when it created an insecurity problem, you have a hot potato, since you have infantry generals; these are people who have been trained by occupation in the most difficult terrain. What is prison to him? Somebody who follows an animal everyday, who is always afraid of snakebites, who gets drenched in rain and his clothes dries on him, somebody who maybe his meal is to stop a goat that he’s rearing and suck from it. You have taken him to a place where you are giving him a hot meal.
I’m not justifying it. I’m just saying ‘let’s understand the social contract.’ So, for him, that social contract has broken down. I’m not just saying it has broken down only for him, or only for the Fulani; it has broken down for the fishing communities as well; and, maybe, some farmers too. And if we don’t deal with it, one day, we will bear the rage of their anger.
The Federal Government rescinded its decision on the creation of Ruga settlements in the country. What do you think informed this decision?
Government should be sensitive to the people. Even if the policy is correct, but it is misunderstood, a responsible government should be sensitive to the people. Ruga is an acronym created by the colonialists. It means Rural Grazing Area. In Birnin-Kebbi, at least, we have 20 Rugas around. That is where the Fulani live. The idea that was developed was that for the states that have this anthropology, let us help them, so that the Fulani living in those settlements can have water and veterinary services. We can teach their women to make yoghurt out of milk, rather than walk seven kilometres to the market to sell N600 worth of milk. This is to ensure they can stay in one place.
What does a Fulani do in the morning, if there is no water? They would have to walk their cows somewhere. It might be one to three kilometres. In walking their cows somewhere, things go wrong, because, maybe six months ago, a primary school did not exist there and they have to meander round it. And in meandering, things can go wrong.
So, population growth is making it impossible for me to help the Fulani. If you go to the prison here in Birnin-Kebbi, more than 60 per cent of its inmates would be Fulanis, because they have entered one farmer or the other’s land, because I haven’t provided water for them to stay in one place and animals cannot stay without water. You may say ‘why do we care? After all, it is private enterprise.’ Yes, it is private enterprise, but a responsive society should care for its weakest link. And provision of infrastructure, ideally, should be for everyone. So, it is part of governance for us to think for everyone. This is not a lifestyle that we should allow anybody to have. For any child waking up at 4:00 a.m. to follow animals for ten to 12 kilometres a day, the social contract between him and society has broken down.
Oftentimes, antagonists of Ruga settlements are quick to propose the idea of ranching. As an economist, what would you say exactly is the difference between the two?
Every economic activity requires some space. It involves recognition that this activity is important to the economy. Whatever terminology we use, let us start with that. Yes, Lagos or Ogun might not be the most ideal for livestock; that is alright. But let those places which are ideal have them, so that our national prosperity can increase. And that is why I always give the example of fishing. What does an Ijaw man like? He likes to enter his canoe and get some fish to take home. Today, it is not possible because that river has been taken over by seaweed which he can’t remove. So, he can’t find fish from that river. That fisherman does not even like the thought of being a fish farmer where he would own a pond. Just like the Fulani man thinks moving around gives him joy.
So, you have to help him migrate, teach him, saying ‘look, what you are doing years back was good and legal, but you can own a shrimp farm which will produce more money for you, take care of your family and send your children to school.’ That’s the obligation of society to him. What is our obligation as society to those people who are moving around with animals?
Don’t even think about this as North versus South. Think about it within Kebbi. What is my obligation? It is to help them, because they are all victims; any cow that moves around in a day loses 70 per cent of its milk. So, no reasonable person would want to do that. So, let me help them with water, teach them veterinary services, teach them artificial insemination. So, rather than hold on to a cow that produces two litres of milk a day, he can have a cow that fetches him 20 to 30 litres a day. And society will be better off. His child would go to school. And the social contract between him and society will now begin to get restored; he feels responsible, you can appeal to his reasoning, his morality and his senses.
So, about ranching, everyone is saying the same thing in different ways. The colonialists forecasted that it is a dangerous thing to have people wandering. So, in any community, there should be a rural area where they can stay and do their business. That’s Ruga. Sometimes, I find it that these noises are being used interchangeably, whether you call it ranching or Ruga, that economic activity requires some space which may be available to those who are undertaking the activity. And more than that, we should work with them, so that they can compete with the rest of the world in that activity, because that is what will contribute to our national prosperity. New Zealand exports about $5.2 billion worth of milk and cheese to the world market. Imagine a Nigeria that is beginning to tap into its potential, where we are not just exporting oil.
Is it true that Nigeria is a small economy as many people claim?
We are a very small economy. Many people have not come to the reality of that. We can be a big economy, if we choose to. But we have to start with the acknowledgement that we are a very small economy.
In 1999, when (Olusegun) Obasanjo was sworn-in as president, the budget was $9 billion. With the increase in oil prices, the fortunes of the country improved. By 2013, we had our highest budget in history, which was $33 billion. But that was the budget. Budget performance in 2013, particularly capital budget, was about 20 per cent. I was in the Senate then. Even assuming we had a 100 per cent performance, how big is $33 billion for a nation of 170 million plus people? In 2013, the federal budget of Brazil was about $600 billion. Here, you have then President Goodluck Jonathan with 170 million plus souls to police and provide infrastructure for hoping to get, at best, $33 billion to spend for them. But the Brazilian president had $600 billion, about 20 times more.
Our budget this year is less than $30 billion. How do we compare to South Africa? So, when are we going to come to terms with this reality, so that we make the choices, because they are not neutral. As long as we remain a small economy, the expectations of the large percentage of our population are unlikely to be met and for whoever is in charge, there will be frustration.
You laid emphasis on comparative advantage. What comparative advantage does Nigeria have compared with the countries you talked about?
Comparative advantage is an imperial term. What do I mean? It is created. Somebody has spent the last 10 years subsidising his farmers and I want to start today; and I offer an incentive to farmers, similar to that which he has provided three to four years ago, maybe much more smaller; and then, he tells me you can’t do this under World Trade Agreement rules, because you are distorting trade. But that is even if you are talking about yesterday. What are European subsidies today? The OECD publishes an annual report on agriculture support. These are subsidies that are given by governments for agriculture in OECD countries. This year, the value of those subsidies was over 445 billion Euros. What is the agricultural subsidy of Nigeria? What is even the total budget or financing available to our agricultural industry? If you start with the 36 states, what is their agricultural budget? We did it last year and found that the total was under N400 billion. Federal Government is another N100 billion naira. Anchor Borrower that has been very successful is less than N200 billion. So, less than $2 billion goes to agriculture – we are not even talking about subsidies, but the total agriculture budget.
Greek shippers who have dominated shipping, how do you think they did it?
They didn’t do it because they have steel more than other countries. They did it because their country decided that they are a trading nation and are going to subsidise the shipping industry so that they can dominate trade.
So, comparative advantage, even as a student of economics, is just gimmickry. How is it that the Netherlands is sending milk to you? What is the comparative advantage? Friesland Campina is a company owned by Farmers’ cooperative. So, their first objective is to sell that milk to the world. And they are the dominant players in our market. Milk is 70 per cent water. So, what do they do? If milk is produced in Europe, to lessen the cost of transportation, you remove the water. So, it is now easy to transport. Then, you move it to Nigeria, find water and reconstitute it. But yet, we are angry with one another because we have failed to develop our milk economy. We are angry with one another because we are foolish not to recognise that we have a bigger industry than the Netherlands. Why are we not a fish-producing nation? We have people who are happy to be fishermen. We have them in Taraba, Rivers, Bayelsa, Bornu and Kebbi States. They are ready to do that for us. Yet, we would rather import smoked fish. The first step in solving that problem is for us to agree as a nation that this is crazy. That is the starting point. Even if we are talking about catfish, why can’t we have a million catfish farms? There are people who are happy to do that.
So, what is our obligation? Sir Olaniwun Ajayi wrote a book. What he did very brilliantly was that he said for a long time we were under slavery where the Europeans slave master put a chain around people and transported them across distances, sold them Unclad and debased their humanity. After that system, colonialism took its place, where they controlled our resources, our economy. Although they gave us independence, there was still some form of indirect control. So, he wondered where their morality comes from. For us to now assume that these are the sweetest people in the world; that they are trying to help us grow and develop; where did it come from?
Somebody whose grandfather was a slave owner, who has a stake in Shell or Mobil, which doesn’t mind owning the whole of Bayelsa as an oil bloc, where does his morality come from? If a cow owner today in the Netherlands, Belgium or Germany does not receive any state support for owning a cow, he cannot compete with a cow owner anywhere in Nigeria. That is my message. If a rice or wheat farmer in the US does not receive subsidy from the US state, there is no way he can compete with a wheat or rice farmer in Nigeria. He would be buying from me, as it ought to be.
The World Trade Organisation has failed Africa, because up till now, it hasn’t got the industrialised world to exit subsidising agriculture, so that the 400 billion Euros it is subsidising agriculture with can come to Africa. Yes, we are competitive, but you must remove distortions created by countries that are wealthier than us.
Since you have justified how small our economy is, how do you think Nigeria can increase the size of its economy?
We have to act quickly enough and create an economy that will work for all or the majority; otherwise, we will all pay a price. We don’t have that now. We are trying to develop it. Nigeria produces the same amount of oil as Brazil. But decades ago, Brazil decided that ‘yes, oil is good and thank God, but it doesn’t create as many jobs as we want.’ Brazil did something: They invested some of their oil money and expanded agriculture.
Today, they are the biggest in sugarcane. They export $30 billion worth of ethanol to the world market. Today, maybe 70 per cent of the agricultural activities in Bayelsa has collapsed because of oil; Bayelsa has maybe more shrimp potential than some of the countries in the world that are exporting shrimp. The (Sheu) Shagari-led government designed a place in Bayelsa to produce two million metric tonnes of rice. Our addiction to oil made us ignore that. This is the same in almost everything. It’s not the fault of any one government. It is a collective responsibility. And that’s why I say it is very important to come to the realisation quickly that we have a tiny economy; $25 billion is tiny for a population coming close to 200 million people. So, let’s quickly acknowledge that we have to compensate for the distortions that are being created by trade, so that we also do not penalise our participants in those activities. Our agricultural sector is victimised, because countries that are stronger than us are subsidising agriculture and dumping things on us.
So, rather than buying from us, we are now the ones buying subsidised food from them. It is the same thing in our fishing sector, our livestock sector.
When you talk about comparative advantage, you are talking about scale of preference. What does Nigeria have that is very important?
Economists use the term absorptive capacity. That means the capacity of an economy to absorb investment. That’s what Nigeria has in abundance. And that’s the potential that we should market, because not many countries have it. But here is a country whose domestic market itself is an engine for growth. If you put $2 billion today and improve fishing, maybe the Nigerian market will just absorb that produce, because we love protein. If you do the same for agriculture, we love our meat and milk. Not many countries have this potential. That’s the low hanging fruit for us as a nation. And that’s why President Muhammadu Buhari, at the National Security Council, was drawing attention to it. That is why he is encouraging the Central Bank of Nigeria (CBN) that. This is what we have. Let’s put money across the nation. If it’s our cassava farmers, let them get more yield per hectare so that they can be wealthy.
Luckily, it is something that a couple of seasons can change. In agricultural value chain, every season can change the story and create mass employment and we have an economy that is working. And we have demonstrated it. Today, we don’t import fertilizers. Why? It is just by thinking correctly. Today, we have almost exited importing rice. Why? It is by thinking correctly. So, we need to do more of that in all the sectors and unapologetically; and even realise the potential in one another and the value of those potentials.