Hon Yusuf Ayo Tajudeen is representing Kabba/Bunu/Ijumu, federal constituency of Kogi State. In this interview with RUTH CHOJI, Tajudeen, who is also chairman, House committee on capital market, talks about the impact of the economic recession in the capital market and other issues
What has been the impact of the economic recession on the capital market?
When there is no inflow of investement, there will be a stall in demand and supply. The worst thing effecting our economy is the over dramatization of the Treasury Single Account (TSA). It was initiated by the last administration but they realized that it cannot be operated holistically. This is because it will affect organizations like the Nigeria Immigration Service that issue the Nigerian passport. Passports are produced by contractors and they need to be paid. The contractor produces booklets that need to wait till about six to nine months to get paid. So if these funds go strength to TSA, the small IT firm will wait that long to assess their money. So they provided a window that before the money gets into the TSA, it is kept for about a month or so that all these people will be paid. But with the current arrangement of the TSA, contractors find it difficult to assess their money. What kind of economy decorates its account with money and refuses to pay contractors? How do you reflate the economy? That is not how to run an economy. Is it Just to impress people and make them feel you are working? Economy does not answer to programs or rhetorics. You have to make deliberate policies channeled towards a particular goal. Nobody is saying that loopholes should not be blocked. But you must look at it and not play to the gallery. What stops us from saying, ministeries and agencies should operate two account instead of many accounts. You will monitor and follow them to know how they are spending the money. The government has a responsibility to take Nigeria out of the woods. They have to reflate the economy by paying contractors and investing in infrastructure. You don’t decorate an account with money because getting money out of the TSA is hell. As it is now, if you have done transaction and you are due for payment, you are made to go through stress to get your money, will you do it again?
What is the state of the capital market?
We have men with robust ideas who have come out with a master plan that if it is fully implemented, we will have a robust capital market. No country made N10 and used it to build road only. But government can get money from the capital market and invest in roads. If it is properly monitored, there will be returns on investment. You get loans at longer periods from the capital market. When we had a meeting of capital market last June, one issue that came up was the local government bond because that tier of government is misunderstood by many Nigerians. A lot of people don’t know their councilors but they know their governors and senators. But if you go to robust economies, you will find that they are more concerned with their councilors than governors. So the capital market is not where it should be but the basic infrastructure needed to take it there is available now. We have the men of honor and integrity that will take us there now with the right attitude from government.
The average Nigerian does not bother about the capital market, what it will take to encourage them to invest in the capital market?
The system is different from 2008 recession. It has taken away the business of doing things on paper. Now people do business online. People must be made to see that their investment is real and safe. The first thought on an investors mind is not profit, but getting his money back. But now there is a refund fund that was created to help whoever loses money in investment to get it back. They are not losing it totally. We need to bring it back to the fore and government must deliberately make capital market part of their economic policy. Until we know that Lokoja/Abuja road will be built through capital investments and people see the result, they won’t invest in it. So when fund raisers come around, you can see with your eyes what has been done with their funds. We use Lagos and Akwa Ibom States as example of what has been done with the capital market.
If you are asked to quantify the benefits of what Nigerian stand to gain from the capital market, if it is fully harness, what will it be?
Sincerely, I cannot put a word to it. It is beyond contemplation. There is no economy in the world today that is doing well without focusing on the capital market. There is no developed country in the world today that has not exploited their capital market. The degree of your growth and development is directly proportional to how you treat your capital market.
How worried are you about the state of the economy?
By privilege, I am an economist and chairman of capital market, so definitely I am worried. Blaming PDP is the height of irresponsibility but I chose not to talk believing that a government that came into power newly should be allowed to take their decision and make their policies. There has never been any transition without some teething problems. I will not be part of those who will say, PDP handed over a perfect country. The boom and scarcity of an economy is like a cycle. An average economist should know and the signs were already there as at late 2014 and early 2015. It is unpalatable for a party to assume leadership at the center without having sat down to analyze the situation. As small as the house committee on capital market is, I did research. We are where we are because the prices of crude dropped and when it was high, every effort by minister of finance then for us to save was rebuffed and attacked by the APC. They didn’t know they were going to be in power or they over played politics. Some ministers today Ameachi led that this onslaught. On the floor, their members also led that campaigned very well. As a mono economy, when the prices of oil shoot up, you were supposed to put your MTEF at 70 or 75 or there about to save for the rainy day but they refused. So we didn’t save anything. To compound everything, they came to power when we had challenges in the system; other services that we look unto to mitigate and breach the gap like capital market, ports, agriculture and the rest. They also stopped the transaction of forex for about four months. The implication is that, in the name of fighting corruption, the businessman or manufacturer who acquired raw materials from China or other places became stranded. It is natural that he will pay for his material in advance before the product will come in about four to six months. The government now stops you from paying for four months. It means you have killed the manufacturer’s business. Those who do commodity trading also were affected because they pay ahead of time too. Ports that get money through this means were stopped because goods were not coming in. To start with, our ports are not preferred destinations, other countries like cotonou is about three days, Ghana is about nine days. So naturally, a business man will think about these countries before Nigeria that takes about 13 days. But now, the government will came and say, you cannot do your business in dollars. So they moved all these things to other countries. People go to Togo and Benin to pay their children school fees abroad. One of the greatest challenge you can face as a nation is when you consciously refuse to see that you are wrong but keep alluding to one ‘witch’ or insist on doing things like they were done in the old days. That is the situation we find ourselves now.
Coming back to the House, were you surprised when Hon Abdulmumuni Jubril made these allegations against the house of leadership of padding the budget?
I am not surprised because I am privilege to have known him, that he is capable of anything. Those allegations affected our credibility as a House, which is why we feel pained. There is nowhere in the world where you run a democracy without the legislature. What gives teeth to what legislatures do is the way they are being perceived. There has been a lot of erroneous impression on legislators in Nigeria. I have heard lawyers, professor’s talk on TV on this issue and I feel disappointed. No money as constituency allowance is given to lawmakers. The contract is awarded by relevant ministries to contractors. The lawmaker only comes to picks the site where the project will be situated. Constituency projects are done everywhere. It is done in America. When you are running an election in America and you mount podium, the first thing they asked you is, what projects will you bring? So it is not alien. It was properly studied before it was introduced here. If there is fraud in it, it is just like contractors who connived with civil servants to defraud the system. Budget is a law presented by the president and after it has gone through the various reading stages, it is distributed to the various committees. We have the right to tinker with it because it is our constitutional duty. We can move money from one place to another in the budget as long as it will benefit Nigeria.