On the matter of the timing, process and content of restructuring – By: Femi Orebe

No Comments » August 7th, 2016 posted by // Categories: Nigeriawatch



On the matter of the timing, process and content of restructuring

Posted By: Femi Orebeon: In: Femi Orebe

The immediate challenge before us as a country is our economic survival and that is what should concentrate our attention.

Son of his father, the inimitable Professor Sam Aluko, Bolaji ,  a  Professor of Chemical Engineering and  former  Vice –Chancellor of the Federal University, Otueke, Bayelsa state, is a delight on the many e-fora where he intervenes with seminal contributions on subjects  ranging, metaphorically, from sand to steel, complete with a bewildering  array of  data to validate his viewpoint.

One such subject is Restructuring, about which there are now almost daily conferences in Nigeria. It is about it that a phalange of the Southwest political elite has needlessly been excoriating the Vice President, claiming, wrongly, that he had disavowed of it.

We benefited on Ekitipanupo this past week, from Bolaji’s intense fecundity. Unfortunately, his views are not the subject of this article sans including his short response to Goke Omidiran, who raised some issues with his position. Wrote Aluko in response: “Multi-tasking is already ongoing. For instance, anti-corruption, security and economic re-construction (the last in terms of diversification, local content encouragement and job empowerment) are going on simultaneously. It just appears that the “economic development” you write about is not as fast as you and I want made difficult, as it is, by the international situation that impacts heavily on our monocultural economy and the disenfranchised corrupt past-actors or ancien regime politicians (or their proxies) who have opened another flank of security concerns that impact even more heavily on the economy”.

I chose, instead, to concentrate on Tope Ojo’s rebuttal of Aluko’s position and my own reaction to the latter.  Restructuring, Ojo says, “is not an end in itself. It is bringing innovation to some fundamentals in a system. It is a change of structure and a reshaping of the entity for the survival of an organization or nation. It could be done when there are problems or when there is need to take an organization or nation to a higher level. APC and the President made it a key campaign promise. We will hold them to that. Buhari has a 4-year, first term and a second term is certainly not automatic.

So, if he does not commence now, when?  ”The northern cabal and all rent seekers, nationwide, he says, are not interested in restructuring and as Professor  Ladipo Adamolekun said, Nigeria must restructure or die. The Country RISK Index for Nigeria is very high. There are insurgencies here and there just as there are agitations that are valid. The economy is in recession and Restructuring will take us out of the valley.

The modality for True Federalism, or Confederation, could be worked out. It is a concept that is hugely misunderstood but that is what will bring the changes we seek. The current unitary system has not taken us far as issues bordering on the exclusive and concurrent lists need urgent action. Restructuring is unlike building a house; it is about rebuilding a nation on the basis of equity and justice.”

I reacted as follows. Restructuring may be all you called it – unfortunately overstated what it is – in the process, conflating restructuring a country like Nigeria, with its size and complexities, with reorganising a company, however big. These are two different things and, almost, incomparable. Rather than dwell on that error, however, I will try to discuss issues concerning what I regard as the appropriate time for restructuring in a country you agreed is in recession. Unlike the 2014 Jonathan talk show, Restructuring is no tea party especially in a country as culturally variegated as Nigeria. Regional/ethnic diversities and perspectives in our country are such that I am surprised you could so casually invite a government plagued by a massive economic disequilibrium on top of other intimidating challenges to jump into the daunting task of restructuring now, important as it is. Indeed, given the level of animosities, the anger and the hunger pervading Nigeria today, it will require a modern day Solomon to preside over what will surely be a disoriented assembly of antagonistic entities.

Let me now proceed to take one single example of the consequences of our current economic circumstances.  I have a friend, a big pharmaceuticals manufacturer whose company employs hundreds of Nigerians. According to him, several months ago, some Nigerian manufacturers got approved Form M’s to import raw materials.

Of course, these were, as expected, fully cash backed with the exchange rate officially around N197/$1.  Many months later, just as they were expecting to start taking delivery of these items, the CBN which, incidentally, had not remitted the funds, comes back asking them to now pay well over 250 naira to the dollar. It got worse.  Only last week, my friend got me to sit on a meeting where he discussed with his bankers about a fresh order for bottle caps. It was such a thoroughly agonising session with figures ranging between a band of N300 – 315 to the dollar that I won’t be surprised if, very soon, industries in Nigeria begin to lay off workers since this is a general problem, not just to pharmaceuticals manufacturers. Or is there anybody out there wanting to see a deluge of retrenched factory workers so restructuring can begin now, now? Obviously, about the only way to stave off this looming de-industrialisation of the country will be for President Buhari to urgently instruct the Central Bank to come up with an intervention fund for the affected companies if they are not to close down.

This intervention fund should enable them access forex at no more than what is on their approved Form M and it should not be treated as a loan since it was no fault of theirs. It must be appreciated that banks are now extremely reticent about granting new loans, knowing very well that manufacturers cannot easily pass any additional costs to their dwindling customers.I digress.

What is described above may very well be the least of President Buhari’s economic, not to mention, security and other headaches.  Is that the government our people would like to see launch into restructuring right now?  I have written tomes about the advantages of restructuring on these very pages. But those were during  the relatively ’problem-free’ days of President Obasanjo when  Boko Haram was light  years away and he could even afford to toy with a Third Term Project as well as during President Jonathan’s  days when you knew that not to do anything was to  let  him drag the country down with himself.  God knows, I still believe very much in restructuring but this, certainly is not the right time when Obas are being seized from their palaces and, but for the strong determination and gargantuan efforts of a Governor Ambode, not only Ikorodu and its environs, but the high streets of Lagos, would have become staging grounds for Niger-Delta militants as we once saw OPC demonstrate in their campaign for President Jonathan.

Security challenges apart, there is the huge financial resources required to have even an encore of the 2014 jamboree which we were told gulped N9 Billion. It has been suggested that government could work with the recommendations of previous national conferences, even Abacha’s, and I say, yes, why not? But this obviously is not the right time.For me, come 2018, the country should treat Restructuring like Brexit; have a National Conference for about six months starting during the Second Quarter of the penultimate year of President Buhari’s first term and get the recommendations approved at a national referendum ahead of the 2019 general elections during which the political parties should treat the document as part of their respective manifesto.

This is slightly different from my earlier suggestion on the issue but it looks much neater since political parties do not become the sole driver of the process. Whichever party wins that election should be presumed to have the peoples’ mandate to restructure the country, beginning, 29 May, 2019.

That way, we would have cured the timing problem as well as effectively involve the citizenry in the decision making process. The immediate challenge before us as a country today is our economic survival and that is what should concentrate our attention. Murders have so spiked in Venezuela, on top of hunger, and general insecurity, that we should do everything to avoid their fate. Their problems arose, we should remember, strictly from non-diversification of their economy.


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