We Must Raise Academic Qualification For Nigeria’s President — Uwaleke

 Prof Uche Uwaleke is the President, Association of Capital Market Academics and a former Finance Commissioner in Imo State. He was invited to grace the inaugural edition of THE WHISTLER Forum—an interview forum where guests respond to diverse questions from a panel of journalists.

Uwaleke showed he deserved the honour of being the first guest of the forum by his grasp of issues and his free-flowing responses to questions on open grazing, restructuring of the economy, Nigeria’s huge debt profile, the National Carrier project, ponzi schemes operations, Nigeria’s growth trajectory, and the quest for economic diversification.

The erudite academic was also asked to say his views on the right qualifications for a Nigerian president.

Uwaleke, who is also the Chairman of the Chartered Institute of Bankers of Nigeria, Abuja Chapter, also gave insights on what the administration of President Muhammadu Buhari must do to guarantee the implementation of the successor Economic Recovery and Growth Plan (2021-2025) after it leaves office in 2023. EXCERPTS…

The President in the last few days has granted two interviews where he spoke on so many issues. What do you make of his response to some of the issues raised?

The President appears to have come out of his shell. The live interviews he granted to Arise TV and NTA was timely, because it is at the peak of tension in the country.

As June 12 approached, protest was expected but the interview helped to douse the tension as the level of protest did not materialize.

It has become known that we have a president that is still in charge. The populace want to see the President from time to time, paying visits to troubled spots. So that’s the kind of President that we want, not a President locked up somewhere.

So, we want to see the President in the South-East, South-West addressing security challenges.

If he goes to the South-East and has a genuine discussion with the South-East leaders, it will help to change some impressions, and help to reduce the tension in the region.

I’m aware that a few days ago, the Chief of Defence Staff was in Enugu to address the security challenge, if the President goes there it will have a huge impact. So, he should continue along that path, because that will also give people a sense of belonging. Most agitation is borne of the feeling of exclusion.

What Prospects does Nigeria have in digital currency considering that many Nigerians are still financially excluded?

First of all, what I will say is that it’s a welcome development, in the sense that it is beginning to change the mindset that people have about the Central bank. It shows that central bank is favourably disposed to innovation, accommodating digital assets, as against the backdrop of the directive that ban crypto currency.

But I’m not sure if the proposed timeline is realistic, given the level of development, payment system, and the broadband network. So the timeline of say 2022 may not be realistic even though the Bank said they have been working on it.

Part of why I said it is welcome, but it is an initiative we must take time to understand before we implement it. As I speak to you, I’m not sure if any central bank in the world has implemented the digital currency initiative fully. They are still studying it.

So as far as the digital currency is concerned, it is still a work in progress for many countries, and I’m happy Nigeria is keying in but what is important to me is that it should not be rushed. The central bank has a number of currencies regarding digital currencies and digital assets generally. The fact that it is susceptible to crime a lot of people can use it to commit crime.

There is also a concern that it will jeopardise people’s privacy, especially for those converting their deposit to digital currency.

It gives the bank access to an individual’s data, there is also a concern that it will affect monetary policy transmission, and closely tied to that is rising interest rate and inflation.

For example, If an individual has a central bank digital currency and depositors are allowed to convert their deposits to central bank currency, it reduces the deposits in the banking system and once deposits are reduced, it affects the bank’s ability to lend and make money. And once there is a liquidity challenge, the interest rate goes up and that can fuel inflation.

So it all depends on how the digital currency is designed, is it designed as just an E-account or a token? If designed as a token, it means there is a limited quantity of it that one can have. So the advantages and disadvantages will depend on the design of the currency.  

That is why even in many countries in the world, it is not implemented, they are still studying it and I would advise that the central bank continues to study it and make sure they understand it because I’m sure there are plans to phase the implementation. 

So, hopefully, this will improve the payment system, as well as financial inclusion, because it is what the millennials will find attractive, especially if the scope extends to them and they are allowed to participate.

So we expect that with it, the payment system will be enhanced, financial inclusion and cash policy will be enhanced as well.

The Federal Government has been pushing for the establishment of a National Carrier, is this sustainable based on what had happened to such previous project?

It’s time we had our carrier. When you fly the Ethiopia airline for example, you begin to wonder why Nigeria being the largest economy in the continent does not have a carrier.

There is something about national carriers, it is not first about the profitability, but the reputation. It’s a good thing if the President flies Nigerian airline to other countries, what is important is for the airline to breakeven, the profit margin should not be the driver when considering a national identity.

A situation where we had a lot of aircrafts in the 80’s and today we don’t have any at all is not something cheering at all, so I think the efforts to revive it are in order.

But when we eventually get it running, we must put in place adequate management, maybe get the private sector to run it. The airline industry is one of the areas where private/ public partnership should be encouraged. For national carriers, we should have a private/ public partnership.

The owner should be the country but the management should be the private sector, or you have a model where the government has substantial shares like the NLNG, Nigeria has 45 percent interest there and then we have other interests.

What killed the Nigeria Airways is because it was entirely in the government’s hand and it was not well run. So when you put square pegs in round holes, and you also allow corruption, so at the end of the day the business runs down, it was not a surprise at all. So now we have lessons to learn from, we know what happened in the past, so this one should be properly run.

But it is also important to know that from what I have read, very few airlines are making profit. If you check the Egypt Air or even the South Africa airline are heavily indebted, they carry huge debt but they are still able to manage to survive because the government cannot allow them to fail.

This industry is referred to as systemically important, so the government will always want to support it because of the national reputation.

CBN Policies are falling short of expectation in terms of naira devaluation and attracting foreign exchange, what would you suggest the CBN do to reverse this trend?

The thing about exchange rate and the value of the naira, I don’t put the blame on the central bank. Exchange rate which is the price of a currency vis-a-vis a foreign currency , that is the dollar and the exchange rate is primarily determined by demand and supply.

The Central Bank has little or no control over demand and supply of forex, the major source of forex in Nigeria is oil, oil accounts for over 90 percent of our foreign exchange sources. Then other sources such as foreign investment, and even the other sources, following covid-19 pandemic eventually dried up. Investors who were here before had to exit, and if a foreign investor is exiting, he would convert his money to dollars to leave.

So, on the demand side, it is not the fault of the CBN that we are an import dependent economy, everything we consume here is imported, so it is demand and supply that determine exchange rate.

So what has the bank done to curtail demand, the bank has tried to put in place some demand management strategies to reduce demand for forex, a few years ago, the bank came up with a list of items that  was going to restrict demand for access for those items. like toothpick for example, that anyone importing toothpick should go and source forex from elsewhere but not in the official channels. And that helped to reduce the demand for forex and that was also put in place to curtail the import of those items and to encourage local production.

So, it helped to conserve the external reserve, but for the restriction on those items, external reserves would have been far less than what it’s today. Even with liberalization we have now in the foreign exchange market.

Recently, the World Bank development report recommended that the exchange rate be completely left free to market forces, but as an import dependent country, can we really do that? But that recommendation did not really take into consideration our import dependent nature. Look at the PMS for example, again it is not the fault of the Central Bank but we are importing fuel, virtually all the fuel we consume in this country are imported and at what price?

Initially the central bank official exchange rate was N379, so imports were done, NNPC was doing imports at N379 to a dollar. Of course, you know as the crude oil price continues to go up, it means that the cost of import will also go up.

Today crude oil price is in excess of $80 per barrel, so what it means is that the pump price, if you allow the market forces, the pump price should be a lot higher considering the exchange rate. 

Now that the exchange rate has moved to N410 to align with the investors and exporters window, that is the autonomous exchange rate, we now discover that the cost of import has gone further high. What that means is that the government is now forced to subsidize the cost of fuel with the little resources available.

So if you hear that public debt is rising, you should know that the government is using the money it is borrowing to subsidize consumption instead of production. So, part of the money is being used to subsidize fuel imports. That is not the fault of the CBN.

What steps do you think the government should take to conserve the naira, and diversify the economy?


Exchange rate is demand/supply, and in a situation where over ninety percent of revenue comes from just oil, is clearly unacceptable. Meanwhile, the country is endowed with a lot of resources, solid minerals, agriculture. Before, the bulk of it was agriculture, so what has happened to agriculture?

Central Bank has been trying to promote non-oil exports through the Anchor Borrower Program but that is like a drop in the ocean.

So what can we really do? The solution to this issue of diversification is to give the states some power in their areas, allow them to exploit the resources in their areas, export and bring the money to the center.

Whether you call it restructuring or whatever it is, allow the states to have some power to control resources in their areas, that is why it is difficult to diversify.

For example, mineral resources are still being controlled by the federal government, state governments do not yet have power over resources in the state, and the state governor cannot attract investment into the state.

For mines, there would be challenges with the federal government, so state governments should be empowered to control the resources in their states, there is no state that does not have resources. So I think restructuring will go a long way.

The federal should hand off resources, states are in a better position to handle resources.

For us to diversify away from oil, we need to restructure, give more power to the state governments, otherwise we will keep going in circles.

Do You think the government’s plan to reclaim grazing reserves would help in resolving security issues across the country, and what impact would it have on the economy?

My position in bringing a lasting solution to the farmer/herders clash has been well articulated by the Southern Governors Forum.

The Southern Governors Forum is not in support of open grazing. They are saying the herders should be kept in one place and that is where I want to perch.

Even the governor of Kano State is not in support of  opening up the country for cattle rearers from every part of the sahel into Nigeria, and the last time I listened to the Kano state governor, he was talking about ensuring that any cattle rearer that comes into the country is registered.

So, we know where he is coming from, we should know what they are doing and where they are and I think that is also what the southern governors was saying, and they do not have to carry arms.

So what I can say is that the Southern Governors already have a position and I would want the Federal Government to adopt that position as a lasting solution to farmers/herders clash.

Because that is a major aspect of insecurity, and it is also what has caused inflation, and partly caused the food crisis in the country.


How do you think the Government’s decision for social media companies to have offices in Nigeria would impact ability to attract investment?


The decision to ban twitter or any microblogging platform is not a good one for the country considering that the social media platforms are also helping to engage the youths and create jobs.

At the moment we read that the country is losing as much as N24bn as a result of the ban, we cannot afford to be losing money and pulling people out of the labour market. The unemployment rate is already high, so we cannot afford to make it worse.

So that was why I said maybe the federal government could have used another approach, not banning, we hear that there are about 36 million active social media users in the country, and about 26 percent of them are on twitter.

We see youths that say their business is no longer moving because of the twitter ban, a lot of the market products on twitter, so the economic hurt is something that is incalculable, so the government should look at it from that perspective.

But that is not to say that the government should not be concerned about the abuse of social media, the fact that twitter can be used to incite violence and perpetrate crime, the government should be concerned about that while at the same time try not to cause more damage to the economy.

So, the idea of asking them to register, I see that from another perspective, if it is to make them pay taxes, I support it because they are in business and they are making money.

Nigeria is a major patronage of twitter, but they didn’t consider us when they were taking their office to Ghana. Why should they not have their office in Nigeria.

But they are now in talks to see how they can sort out the problem. So, one of the ways to sort the problem is to establish the business here and also pay tax.

It’s not even about regulation, there is only a little to what the government can do in terms of regulation, because they are online. But what is important is that they are here and they are also providing jobs and paying tax.


How would you appraise the performance of the Economic Recovery and Growth Plan, what would you suggest further economic plans should have?



The first thing is to say that the ERGP did not meet the target, it came late, the government didn’t come up with that early enough.

The government didn’t come up with the plan till 2017, that is two years in office. and mind you 2016/2017, the country was in recession and exited in 2017.


The ERGP fell short of target by far, the plan targeted a 7 percent economy by 2020, but we had -1.9 in 2020.

Of course it was largely because of the covid-19 pandemic, but the reason I said it fell short of target was because a lot of initiatives in the plan have not been touched at all.


For example, the education sector, the plan proposed that the government would partner with the private sector to set up post university institutes across the country.

So that as more Nigerians graduate from the university, they attend the institute to learn some skills, imagine if we had that in all the states, by now this issue of unemployment would have reduced.

And again, look at health, there were plans to set up world class hospitals in all regions of the country to reduce medical tourism, and again that has not happened.

So, a lot of initiatives there have not been implemented and we are entering another one.

So the implementation is always the challenge and again, every year the revenue side of the budget does not meet its target, even though oil does meet its target, the non-oil and the independent revenue always fall short.


The money expected from over 900 MDAs always falls short, they do not remit their surplus, corruption is really hitting hard on the country. So, with revenue shortfalls, the government cannot implement capital projects.


A successor economic plan for the ERGP is currently being worked on. What are some of the suggestions you will be making if your input is required?



 Now the next one which the government has put together people who are working on which is the ERGP two. The major risk that one will have, infact as long as I’m concerned, is that one is like dead on arrival. Do you know why? this government will leave office in 2023, by January 2023, election has been fixed for February. Once that election is done, everything is over.  Once we know the new President, everything is over. We are now saying that we have roughly two years for this government to leave office and that document is still in the works; it may not come out so soon. Even if it comes out, when will they start implementing and when a new person comes whether he is from the same party you can no longer guarantee that document.

At least let me talk from experience, once a new government comes in, all the plans… look at the plans we had in Imo then, the new person wants to run his own. So, any person that comes in after President Buhari will want to have his own and then all these will go down the drain. That is why I said it was dead on arrival.

The opportunity we had was that ERGP one. Now as we speak, the government has a plan they call the Economic Sustainability Plan. The one that came up last year as a resullt of the Covid. If you look at that document again, very good. It has ambitious plans, very good plans on agriculture, housing and gas infrastructure. In agriculture for example, the plan says it intends to bring in between 20,000 and 100,000 hectares of land in the chief states. For housing, it talks about 300,000 housing units. This ESP is just for one year. For energy it has a plan to provide 5 million solar projects in that plan. But how far have we gone now? Very soon the plan will be over, because it is just for one year.

That plan is meant to be a stop gap as soon as the ERGP two will start. So these are the challenges. My suggestion with regards to this ERGP two is that if they want it to make any impact at all is to find a way of getting legislation around it.

Whatever you have said that you want to do, is it possible to get the National Assembly to make a law around it to say that whoever comes in after 2023, is bound to implement it. If there is no law that backs up this ERGP, it is just a mere document. What they are doing is just academic exercise. The ERGP 2 is likely going to be affected by a transition. This policy inconsistency from one government to the other. That is why it is usually best to pursue what you want during that first term.

Nigeria’s debt to GDP ratio has been said to be low despite the huge debt of about N33trn that the country is owing. Is our debt sustainable in line with current economic realities? How can the Federal Government better manage Nigeria’s debt portfolio in a manner that would enable us to pay them and stop further debt accumulation?


To your first question, this is my view. In terms of sustainability, we have debt burden indicators. Often we hear that the debt to GDP ratio is within international threshold and therefore the country is not in any debt crisis. Debt to GDP is less than 25 per cent, we have a World Bank threshold of maybe 50 per cent and your own is 25 per cent, then you say you are still comfortable.

But for me and many, the sustainability is better measured not by debt to GDP ratio but by debt service to revenue ratio. Out of the money you earn, how much do you spend on servicing debt? If you earn $1 and you spend as much as 80 cents servicing your debt or you earn N1 and young spend as much as 80 kobo servicing your debt, that is the problem.

Unfortunately, that is the situation in Nigeria. We are spending so much from our revenue to service debt and when that happens what is the implication? You have very little for what you want to do. If you have N1 expenditure, what it means is that you have 20 kobo for it. So, it counts out development of capital projects because that leaves you with very little and debt servicing you must do. That is why every year, government has not defaulted. Government will always service debt, so it leaves us with very little and that is why you see us more like in a perpetual state of borrowing.

You will need to borrow to survive because as you earn, you are using it to service debt and so you will end up even refinancing. Refinancing means you borrow to service your debt. So that is our situation and I will say, the debt service to revenue ratio is really a problem and that is why sometimes you hear the Ministry of Finance say that we have a revenue challenge.

We are not earning enough, because if we are earning enough, the amount we are spending on debt service would not be an issue but because the revenue is not as big as it should, the little we are earning we spend on debt servicing. So it is a challenge.

The N33trn is even because you have used N379 to the dollar to convert the external component that is why you are having the amount. If you use N410 to convert the external component, you will have a higher figure and if you also add other debt of the government that somehow are not part of the N33trn, you will have a higher figure. If you add the debt that the government is owing Central Bank over N10trn that tells you too that we have a higher figure. So, the debt stock is quite high, there is no doubt about that.


My worry about the debt stock really is if you look at the composition, now going to what we should do, I think we should focus more on concessional loans. Loans form multilateral sources, World Bank, The International Monetary Fund, African Development Bank and maybe bilateral sources.

When we are going for loans, we should focus on concessional rather than commercial debts. So, I wasn’t happy when I heard that there’s also a plan now to also go to the international capital market to borrow money. That is to go and do more Euro Bonds. Euro Bonds are commercial debts. I don’t like the idea of the country taking Euro bond. One, they are more expensive; two, the investors in Euro Bonds do not care about what you do with the money. What they want is their return. But if the World Bank gives you money, the World Bank will try to follow what you are doing with the money. So, that Euro Bond gives a lot of discretion to the borrower and that can be abused. So, that is why I would advise the government not to continue with the Euro Bon.

Already we have 11 Euro Bonds now. We settled one last year, the outstanding ones are now ten including one diaspora bond of $300m. So, in my view, we should not borrow more Euro Bond. You see the Euro Bonds we have make up about 40 per cent of the external debt stock, but if you look at the debt service of the external debt, it is close to 60 per cent of the debt service. So that tells you it is more expensive.

So, what should we do going forward as regards our debt?

It is not as if borrowing is bad for a country with a huge infrastructure deficit. For a country with debt stock to GDP is just about 30 per cent in South Africa is about 80 per cent. So, because we have very little debt stock to GDP, there is no way we can fill the infrastructure deficit using annual budgets.

The money we vote yearly for capital projects is very small. We need according to what we read that this country needs to put in every year N10trn for the next 30 years on infrastructure before you can fill it.

So it is huge and that is not what we can just do from a budget. We need assistance. We need to borrow. But what is important is that if you borrow, you will use it for projects and those projects must be the type that are self-liquidating.

With the negative impact of Covid-19 which had made it challenging for the government to boost economic growth, what are some of the areas Nigeria should focus on going forward to boost output?


Post Covid let me give you four. Health and education are critical and the education is functional education. I would like to see our youths finish school and not depend on paid employment. We want to see more vocational training institutes. So, education, health and agriculture.

Why agriculture has to be there is because agriculture is what we have. Agriculture still employs more than 60 per cent of the population.  It contributes about 24 per cent to the GDP. So, agriculture has massive potential and then IT. Education, health, agriculture and IT. Focus on these to grow this economy.

Do you think we should tax big companies more to raise more revenue?

AS far as I’m concerned, our tax regime is high compared to other economies. What is low, here in Nigeria, is VAT.  Our VAT is 7.5 per cent which is one of the lowest. In other countries like South Africa and Ghana, VAT is more than 10 per cent. So, Nigeria has one of the lowest actually when it comes to Value Added Tax. But when it comes to Company Income Tax, we are one of the highest. South Africa is about 26 per cent, Ghana is 25 per cent and we have other countries around us below 30 per cent. But our own is 30 per cent. So, companies income tax is 30 per cent in Nigeria.

Although recently, with the Finance Act, the government has come up to say if your turnover is below a certain threshold, you pay 20 per cent, but for big companies it is 30 per cent.

So, if you’re saying the companies should pay more, it also has its own disadvantage. It can be counterproductive because when companies pay more tax to government, it discourages investment on the part of the company. They won’t have money to invest and may also not be in the position to employ because you’ve constrained them. And this is an economy where the government is no longer employing.

You heard the President the other day in his interview to NTA, he was saying that the youths should understand that there are no more jobs in the ministries or government.

So, it is the private sector that should employ and when you now overtax this private sector or companies that are already suffocating under the yoke of multiple taxation, you’ll constrain their ability to invest and employ.

The government’s role is to create an enabling environment and that enabling environment should include an environment of low taxes.

You mentioned multiple taxation. Do you think those taxes should be streamlined?

Yes, streamlining has been on for a long time. Streamlining tax in such a way that those who pay taxes don’t suffer multiple taxes. But of course, it is implementation that has always been the issue.

So, I think in terms of company income tax, instead of increasing, the government should be thinking of recuing. We can also increase VAT from 7.5 per cent to 10 per cent and then reduce income tax. The idea is to shift the tax mix away from direct taxes to indirect taxes, such that if you don’t consume, you don’t pay. Unlike direct taxes that one must pay.

We should also ensure that the tax net is widened. A lot of tax payers or potential taxpayers are not paying tax in this country. If you check the number of companies we have in Nigeria and check the number that are paying tax, you’ll see that there is a gap. So, we need to capture a lot of individuals and firms who are not paying tax.

This is a big country; the population is bid and the number of informal sector microbusinesses are big. So, by the time you get them to pay tax, no how small, you’ll see that government revenue will increase.

Nigerians are always falling victim of Ponzi Scheme, is it that the regulators are not doing something right? And how can the Nigerian investor be protected?

I will say the regulators are trying, especially in recent times. The Securities and Exchange Commission, I can tell you, has always been issuing warnings and carrying out sensitization campaigns that warn the public about the dangers of Ponzi Scheme.

A lot of publications have been done by SEC in newspapers. What I have not seen recently is maybe [sensitization campaigns] on TV. But SEC tries to use the ones that can reach majority of the population like the radio and social media.

Apart from sensitizing the public, SEC has also been clamping down on some of these Ponzi scheme operators by arresting and prosecuting them. But you still find these things happening and it has to do with the economic situation that we find ourselves in.

Has any Ponzi scheme operator been jailed?

There are a lot of cases. There is even one now that the company was sealed and when such happens, they go to court. SEC even took the case to investment and securities tribunal, won the case there and the case went up to the Supreme Court. The firm kept saying that what they were doing is not Ponzi scheme, but the Supreme Court ruled in favour of SEC and affirmed the decision of the investment and securities tribunal.

Of course, what that means is that the promoters would go in for it. So, these things are happening, but you will see find people falling for these schemes because of our economic situation. People think that because there is hardship all over, so they should try the Ponzi schemes.

SEC has always been telling the public to asked this question: What is that investment that will promise you 30 per cent return a month?  This is an economy where it is difficult to see what will pay you 10 per cent in a year and the other one is promising you 50 per cent in a month.

If I tell you to give me N100,000 to return N150,000 at the end of the month, is that not 50 per cent in a month? So, you can imagine the supposed return in a year, yet people fall for such. So, that is Ponzi scheme and as I said, SEC has been on it and recently too, SEC brought out rules for crowdfunding whereby if you want to raise money or collect people’s money through online mediums, you must follow the rules.

If you’re to advice someone who may likely fall victim of these Ponzi schemes, what are the five things you are going to tell such person?

First, when you see such schemes, ask if the firm is registered with SEC. Every investment firm is expected to register with SEC. If the firm is not registered, don’t patronize such firms. In fact, that is even the starting point before you begin to check other things.

“Secondly, check who the promoters are. Do they have reputation? Again, they are also supposed to be registered with SEC as professionals. So, who are the people behind this thing? Where are they located? Of course, some of them will have an office, but check if they are in serious business.

For instance, when I came to THE WHISTLER, I know you are in serious business [because] coming in here already tells me you’re in serious business. But if I go to a place for example and somebody is promoting something and saying bring one million, I’m into oil and I’ll you 50 per cent at the end of the month and you go to find the person using a room in a plaza, does that not tell you something is wrong?

Also, do your own independent search before investing. Finally, everybody should know that there is no free launch.if it is too good to be true, runaway.

Ponzi schemes tend to thrive during periods of recession, when people are hungry, so the operators take advantage of the situation. So, people should shine their eyes.

Do you think it’s important to have a President who understands economics?

The question now is how do you know a President that understands economics? It doesn’t have to be a person who understands economics. It is important that we have a President who is enlightened and that is why people say we should raise the bar such that if you want to contest for President, you should at least have a degree or must have finished from a higher institution. By the time we increase that, you’ll realize that anybody with HND or First Degree will be in a better position to understand the workings of an economy.

And the important thing is being able to understand it, then you now surround yourself with the real experts. In your appointments, if you put round pegs in round holes, you’ll discover that you’ll get the right type of advice.

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