President Yar’adua’s cabinet has been in place for more than eight months now. Since 2003, this columnist has adopted a “watching brief” on the management of the economy. We have monitored and commented on economic issues, particularly since the Ngozi Okonjo-Iweala and Charles Soludo led economic team were brought on board by former President Obasanjo. Having allowed the Yar’adua regime more than enough time to settle down, and with the Presidential Election Tribunal’s dismissal of the electoral petition against the President’s election and his effective take-over of the party structure at the recent PDP Convention, it is probably time to turn the spotlight on economic management under the Yar’adua Presidency especially as it is clear that under Yar’adua, there is likely to be much less media engagement and public policy advocacy by Ministers and other public officers.
The President strategy, at least regarding policy debate is much more low-keyed. The implication of this, if columnists, the media and the general public allow it, is that policy formulation may frequently present the public with fait accompli. This column has thus decided to commence a feature on the four principal economic functionaries in the Yar’adua presidency. These are Dr Shamsudeen Usman, the Finance Minister and leader of the Economic Management Team (EMT), Mr Remi Babalola, the Minister of State for Finance, Senator Sanusi Daggash, the Minister for National Planning and Head of the National Planning Commission (as well as deputy leader of EMT) and Mr Tanimu Yakubu, who is the President’s Chief Economic Adviser and reputedly quite close to the President. These are currently the main drivers of economic thinking. If they fail, the economy will probably fail.
These features may not necessarily be consecutive and we commence with Mr Remi Babalola. Babalola came to the Finance Ministry from the banking sector where he was an Executive Director at First Bank in charge of the Lagos/West Directorate. He had previously carried out planning responsibilities in the same bank before his appointment to the Board, and was a General Manager at Zenith Bank. Babalola graduated as an Agricultural Economist from the University of Ibadan, and trained as a Chartered Accountant at both Price Waterhouse (now Price Waterhouse Coopers) and Arthur Anderson (now KPMG). Evidently there is no doubt that he came to public economic management well prepared with a blend of appropriate academic and professional training and accounting and financial sector experience.
I have always believed that there are three critical qualifications for success in public office, especially in economic related positions-the appropriate technical and professional background, qualitative private sector or development finance background and having the right integrity and motivation for coming into public office. The best professor of Economics or Bank CEO will not succeed in an economic portfolio, if his primary motivation is either to secure a large enough pension for his retirement or some other interest different from the public good. I think Remi Babalola scores quite highly on this integrity and motivation scale. Those who knew him as a banker (and I must disclose that I am one of such) and those who have observed his disposition since his appointment as Minister of State for Finance believe that he seeks only to leave a legacy of service and to make an impact on the management of Nigeria’s public finances.
So what has he done since his appointment as Minister of State for Finance? I have criticised this regime for not having a clear-cut economic policy framework that can serve as a compass for economic management like the NEEDS document was under the former regime. I have seen media reports that the EMT has fashioned a framework for Vision 2020 which integrates the government’s economic priorities including the seven-point agenda and Vision 2020 into a coherent document. If this document is promptly released by government, it will eliminate one of the reservations about economic management under the Yar’adua Presidency. I also believe that Babalola as a key member of EMT will have to design a new framework for the Policy Support Instrument (PSI) that will preserve the support of the multilateral partners as well as guarantee that economic growth continues unabated, but social spending on infrastructure, education and health amongst others is emphasized. The Ministry of Finance has also fashioned a Medium Term Fiscal Policy (MTFP) a three-year budget framework which will be particularly useful in the absence of an overall economic framework.
One of Babalola’s most significant actions in office, has also been perhaps the most controversial-his efforts to resolve the outstanding issue of insurance sector recapitalisation. From the point of view of overall public interest, his efforts have been commendable-ending the stalemate over which firms are authorised to carry out insurance business or not, and re-invigorating the insurance sub-sector of the capital market such that many firms in that sector have secured renewed investor interest. But there are reservations over the handling of the NICON Insurance matter, especially the matter of the legal injunctions that appeared to restrain the type of actions taken in respect of the management of the company. Most insurance people I have spoken to however (perhaps naturally) are supportive of the actions taken by the Ministry of Finance in that matter.
As Minister of State, Babalola chairs the Federation Account Allocation Committee (FAAC) which is an important element of the country’s fiscal structure. Given the abuses of the constitution by all sorts of deductions and mandatory contributions from the states and local governments under the erstwhile regime-such as building primary health centres all over the country and the National Integrated Power Projects-the handling of the Federation Account under this regime has been more transparent and sensible, reflecting the government’s emphasis on the rule of law. This columnist however was a strong supporter of the CBN’s policy of making payments to states in Dollars, a policy which it appears the CBN and EMT agreed to, but which was torpedoed based on objections from the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC). I still believe the decision to stop those dollar payments was a missed opportunity.
The 2008 budget is not yet out due to disagreements with the legislature over spending increases. For me the signal from the Presidency and the Ministry of Finance that they are not in support of profligate spending is a good and commendable one.
Agbaje is Senior Consultant/CEO of Resources and Trust Company (RTC) a Strategy, Consultancy and Business Advisory Firm. RTC POLICY is the policy, government and political consultancy arm of RTC.
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