Dr Mohammed Santuraki is a former Managing Director/CEO of Bank of Agriculture and Federal Mortgage Bank of Nigeria. In this interview with OLUWAFEMI JUWE, he urges President Bola Tinubu to return the Central Bank of Nigeria to its orthodox role and stop all the Godwin Emefiele-induced interventions, among other issues
How will you assess President Bola Tinubu’s first two months in office?
Certainly, he has his own weaknesses, but what democracy does is that it can limit choices from which one can only choose people on the ballot. So, I wasn’t surprised that he emerged as the President. I believe he will do well because I do know that he has good people around him, which is important in governance. The rate at which he has hit the ground running has surprised me just as it is surprising to see what our political leaders can achieve only if they stay very focused and with strong political will. In terms of areas of focus, the President has been reasonably settled because he came up with his programme, which is the presidential policy directives and the five areas he selected are public finance, infrastructure and security, human capital development, public sector and the economy. It’s good that he has prioritised some of these.
Part of the public finance agenda is the removal of oil subsidy, which he did in his first week in office. This has been a big issue in Nigeria. A lot of our past leaders kept calm but he held the bull by the horns and removed it, which is a very good thing for Nigeria considering the amount spent over the years on oil subsidy. The last record we had regarding subsidy spent last year was about N4.3tn. You can imagine a national budget of about N20bn expending almost one-quarter of the budget on subsidy. And the claim then was that they were subsidising daily consumption by about 66 million litres. Immediately the subsidy was withdrawn, the daily consumption dropped. So, the implication of that is that one-third of the N4.3tn went into private pockets. That money can go into financing agriculture, because now the government will have more money for social infrastructure, education and so on.
Another issue is the issue of the unification of the exchange rate. When you have differences in exchange rates, only people with connections will keep benefiting without doing any work. Reasonably, there is an attempt to address that issue now by the current government of President Tinubu. The other element is what is being done in the CBN. Everybody knew that a lot of corruption was going on in the Central Bank of Nigeria, but nobody wanted to face the problem. Now, it is good that the President is set to ensure that the CBN returns to its statutory roles. In the last 10 years, we had a CBN that began lending to the sector. Usually, the CBN is the lender of last resort, but our CBN became the lender of first resort. I am in the agric business and people would ask if I have accessed some of the CBN’s intervention schemes.
Remember that we have almost 200 federal parastatals. What are they doing with those parastatals? This means, we have several numbers of boards, chairmen, DGs, secretaries, etc and not to talk of other staff members. We have 774 local government chairmen, then we have 72 governors and their deputies. So, we have to reform the system. A lot of these parastatals overlap. Democracy is very good but the way we are implementing it is expensive. Unfortunately, under the previous regime, we were creating more and more parastatals. So, governance is taking a chunk of the meagre resources of the country. If Tinubu can bite that bullet and ensure that these reforms succeed so that we can reduce the cost of governance and get additional resources available to pursue the development agenda of the country, then he would have done very well.
Another area is judicial reform. What is happening in this country now is that INEC is actually not the body that determines elections and who wins elections in this country, because our politicians rush to the courts for determination. The judiciary comprises unelected officials, but who are sadly now determining who will be our leaders. We need to tackle this area of conflict in our system. That sector needs a lot of reforms. For instance, when you have families of some senior judges in the Senate, it complicates the matter. We need to take care of those areas of conflict of interest legally. In fact, some of the judges even have their children running for elective offices. These are some of the areas in which we need intervention and reform, so that we remove the areas of conflict given the critical role of the judiciary in the determination of our political fortunes. The new government must address these areas.
As an ex-Managing Director/CEO of the Bank of Agriculture, how do you think the government can handle the agric sector?
What we have done wrongly is that we think we must always just throw money at our problems. That we have also done this in the agric sector and it has not taken us anywhere. The central driving force for agricultural development over the last years has been the issue of this Anchor Borrowers’ programme of the Emefiele CBN, which is not the right approach. We need to go back to the basics. Yes, we must support small farmers but we do it in a more targeted way. Yes, money is important for agric growth, but what people need is technical skills because we have a lot of subsistence farmers whose production is not optimal. This is because they don’t have the right skills and knowledge. Our extension services in the country are gone. They don’t exist anymore. So, we need to empower our farmers technically. We also need to expose them to good seeds as a way to develop the value chain in agriculture. We needed to also create an environment for agricultural businesses to flourish, just as we also need the big-time farmers because they are the ones to bring out the capital for export and other support, because export is very important. We need to make it attractive because I’m also into agribusiness.
I am for instance imagining the day we can export and also convert proceeds to naira in an attractive way, but suddenly the government introduced measures whereby once you export, you have to convert it through the official window and that makes exports unattractive. But I am hoping that with the current changes going on in the domiciliary account market, the government will look at it, so that exporters can have the freedom to sell their proceeds in any of the markets in the world. We also need to encourage foreign direct investment in the agric sector. I am from a state that has the largest landmass in the country. We have a lot of land but with the land use system, it is difficult to get land for a serious investment because people have cultural attachment to land even if they are not using it; they find it difficult to give out. People need to be more educated on this so that we can have models where the existing landowners can be integrated into the whole agribusiness chain.
As the chairman organising committee for the inauguration of Governor Mohammed Bago of Niger State, you must have his ears. What radical steps would you advise him to take to banish poverty and insecurity in Niger State?
There’s a lot of work to be done in Niger State because when you look at states that were created at the same time as Niger and some of those created after the state, you will find out that we are far behind. We have a great deal of infrastructural deficit. Our intercity roads are very bad. The government needs to improve the intercity infrastructure and embark on urban renewal. Niger State is one of the few states where we have four or five urban centres and it’s the largest. A lot of states just have one city, but Niger has Kontangora, Bida, Minna, Suleija and New Bussa. All of them are urban centres in their own right. You also have about eight first-class emirs and I am not talking about 2,000 first-class emirs. You know a lot of the 2,000 class of first-class emirs have been created. I am talking of pre-independence first-class emirs. No state in the North has that number. Of the pre-independence first-class emirs, eight of them are in Niger State. No state has that record.
Our landmass can be an advantage and also a disadvantage because the amount of money that will be needed to create infrastructure can be so huge that you will not be able to notice any appreciable improvement in any one area. That’s part of the challenges that we have. Fortunately, the advantage is that we have a lot of arable land. So, facing agriculture will be a very viable strategy for us. And that is an area that our new government is focusing on. Our strategic location and closeness to the Federal Capital, we have not really taken advantage of that. Between our borders with the FCT, we can have housing estates and light industries around that. We want to optimise our closeness to the FCT to make sure that we accelerate development. The fourth one is endowment in terms of hydropower. Niger State is dam intensive. We have many dams. We have several rivers. So, easily 40 per cent to 60 per cent or so of the entire electricity generation in the country is from Niger State – Shiroro, Kainji and others. We are truly a power state in the real sense of it.
That’s another brilliant area the Tinubu government is doing well with the signing into law of the Electricity Bill that sort of liberalises power generation. So, what we are looking at is that we have discussions with development partners, including the African Development Bank and the United Nations Development Programme, so that we can create mini hydro plants so that we can empower some of these industrial estates that we are planning. Power is a very critical factor as far as industry is concerned. We also have plans for urban water supply, which remains a big problem in Niger State. Most of our towns and urban areas don’t have water, so we thought of sinking boreholes. We have made concerted efforts towards improving water supply in major centres.
As a notable politician who is very close to Governor Bago, do you think he can walk his talk for the people?
You need four elements to perform optimally. You need knowledge, experience, work ethic and energy. If any of these is missing, performance will be difficult. If you look at Governor Bago’s background, it’s quite admirable. He worked in the corporate sector as a banker before he went into the public sector. So, he is target-driven because anybody that served in the banking industry of this country will have that attitude. In terms of experience, he has served as a former member of the House of Representatives for about 12 years, which is unprecedented. When you are in the House and you engage in oversight functions then you’re good to go, because what oversight does for you is to give you the aerial view of what is obtainable in most of the institutions. So, he has a lot of experience. He served on a lot of committees. In terms of energy, he is a young man with abundant energy. He is also somebody who listens. He needs to have good advisers around him. My position is that every leader is responsible for the kind of advice he gets from his advisers. Governor Bago will do well. I have no doubt about that. He is focused and keeps his eyes on the ball.
In Niger State, security is one of the major areas of interest. As the Santuraki Nupe, how do you advise that the insecurity problems be solved?
The governor recognises this fact. One of his first assignments as a governor was to have a meeting with all the heads of security arms in the state. It’s part of the problems that we are looking at. For us, security is local. The strategy we are adopting as far as security is concerned is to meet with the traditional leaders. That has started because they know their communities very well. We are using them to address the issue of insecurity. More importantly, security is a major responsibility of the Federal Government. Anything we are doing, we are just complementing what the Federal Government is doing. I am not saying it’s not important though, but even the steps the Tinubu’s administration has taken in terms of refreshing the security architecture is also very pleasing. He didn’t spend much time; he has already appointed the leadership of the security agencies. From the way the appointment was received, he is on course. If you have strong leaders who are leading our security guys, we can only hope for better days ahead. The security chiefs should not be allowed to stay in office forever. If they are not performing, they should be removed unlike during Buhari when some people served as ministers for eight years with nothing to show the country. This government should be result-oriented. Yes. We are exploring better cooperation with security leaders across the country.
Aside from being an ex-MD of the Bank of Agriculture, you were at some point also the CEO of the FMBN; from your experience, what really went wrong at the CBN?
When the Buhari government came, part of the allegation was how the CBN aided former President Goodluck Jonathan. Now, I don’t know who does that. A new President with that kind of report rather than stop his tenure, renewed it. It’s unheard of because the CBN as an institution is too important to be left like that. Virtually everybody in this country knew about what was going on in the CBN and a lot of people know the beneficiaries of the Emefiele-CBN mess, but this guy carried on like that in office. I have never seen a thing like this. One arm of the security system was looking for him and another arm was protecting him. This country became so dysfunctional that it became unbelievable and unheard of anywhere and still Emefiele went on television to tell people that anyone who wanted to fight him should come out. He had that audacity to indicate that he was going to run for the presidency and Muhammadu Buhari left him in the office? And he called the interventions on our economy booming everywhere.
As a banker, I was approached by a pencil manufacturer to intervene for him so that the CBN could release the pencil manufacturers’ intervention. How strategic is pencil production in this country that the CBN would have funds for pencil manufacturers? Pencil was invented several years ago and we are still at a stage where we are getting the CBN intervention for it. Tinubu must return the CBN to its orthodox roles and stop all this nonsense about the various Emefiele-induced CBN interventions. I mean, we should intervene but not the way CBN under Godwin Emefiele was going about it.
What’s your estimation of the overall banking sector?
The banking sector is the livewire of the economy. I think reasonably well, you cannot avoid challenges once in a while but so far, the time limit that was introduced for MDs of banks has worked quite well but some of the banks found a way of circumventing it. The regulators have seen the loopholes, so, they should implement it now to the letter so that our banking institutions are not dominated by single individuals. You know there is a saying that the best way to rob a bank is to own one. Because once you own a bank, it’s very easy to rob it. Those corporate governance restrictions should be tightened and the government should increase regulatory oversight. They should not make it easy for banks to receive the CBN intervention because some of them can be reckless with what they do because they know that at the end of the day, the CBN will intervene.
Governance is very important in our institutions. Once we do that, we are good. Many of these banks are expanding in other regions. Some are even opening offices abroad. That indicates the level of maturity in that sector, but the regulator should not relent. They should continue to exercise very serious oversights as far as the banking sector is concerned. But there’s also another element, which has remained largely unregulated, which is the fintecs because a lot of these fintecs have even overtaken banks in terms of size. So, there must be stronger regulation. Those fintecs must be brought to the regulatory fold of the CBN or other regulators because they are also growing bigger and bigger. We need to keep our eyes on those balls.
You were the Chairman of the Governing Council of a university, what’s your take on the student’s loan scheme?
The rate at which our public university system has expanded is difficult to justify, especially in terms of how we need to maintain the quality of the institutions and ensure that they are adequately funded. In my view as the then Chairman of the Governing Council of a university and also the Vice Chairman, Committee of Private Universities of Nigeria, my argument has always been on how to balance the whole exercise; the resources available to the government must be used to properly run the schools, including the payment of staff salaries. In Nigeria, the university system that we have is a central unit. It’s not like that in every tribe. In South Africa, for example, the unions are usually university-based. That is the mode I was actually canvassing, because some states have three universities, especially in the South. You will find out that none of those universities is properly funded. A lot of these universities are what we call TETFund universities because most of their capital projects are funded by TETFund and not by the owners.
We have a situation whereby anytime the Federal Government negotiates with the unions, whatever they agree with the unions in the federal universities is also anticipated with the state-owned universities and you know that the resources are quite different from that of the Federal Government. So, you have a situation whereby many of the states are finding it difficult to fund them. Meanwhile, the Federal Government has not been helpful too. It has continued to establish more and more universities. It’s better to have 30 solid universities than 40 or 50 universities that are not properly funded. University education is the only way that we can break the poverty circle in this country.
The government should make it affordable and accessible. But you need to balance that with the quality of the education. The student’s loan scheme is a good idea. If there are students, then universities can charge and break even. The rates at which state universities are charging now don’t even allow them to break even. You have a situation where university education is cheaper than private secondary schools. Parents can send their children or wards to private secondary schools where they pay N500,000 per term, but once you say public universities should charge N500,000, everybody revolts. It’s a very tricky thing.
The government should support them with the resources available and parents too must take up some of the burden. No doubt, the student’s loan scheme approach will help so long as the universities are allowed to charge reasonable commercial rates that will make them break even. Meanwhile, the government should improve on the allocation that is recognised internationally for the education sector. Beyond that, there are several innovations taking place outside the university walls. Universities should embrace new technologies to lower costs through online trainings. Such makes education more accessible. I think it’s a mix of things that should be done. While pursuing the student’s loan scheme, the government should also increase its budgetary allocation for education. And more importantly, place emphasis on specialisation.
I don’t know the number of universities that we have now, but there was a time when there were about 60. They can specialise; maybe 15 or so of them. Let some concentrate on research and postgraduate development, while others do first degrees and so on. So, you have degrees of specialisation in some of the universities so that we can feel the impact instead of having so many institutions duplicate the same thing. University training courses should be more targeted at the economy because we have so many graduates that don’t have 21st-century training for the real sector of our economy.
