Babatunde Ruwase, a Chartered Accountant, and past President, Lagos Chamber of Commerce and Industry (LCCI), in this interview with TAIWO HASSAN, bares his mind on the current macroeconomic challenges confronting the country and other prevailing issues

What is your view on the economic situation in the first quarter?

Well, it has been very tough for everybody in this country since the beginning of this year, including the government too. The carry over of the 2022 macroeconomic challenges to this first three months of this year does not help matter too; like the Ukraine and Russia war, which has thrown everybody back into stunted economic growth and development. Unfortunately, for us in Nigeria, we have economic and political issues in the Q1’23, which is not good for us. These challenges are likely going to take us to the next quarter, because there is no evidence that there is going to be improvement in the economy with the just concluded general election and also, the national census still expected to take place too later this month end. So, the Q1’23 is very bad for us economically because there was no growth in key sectors of the economy and this has to do with the conduct of the general election.

Amidst the fragile economy, ongoing insecurity, electioneering spending and other macroeconomic challenges, do you foresee Nigeria’s Gross Domestic Product (GDP) being in recession?

I quite agree with the fact that our economy may experience recession in the first quarter. The ordinary people on the street know that it has been difficult for our economy and this is further compounded by the political class. For instance, today, as I am talking to you, I don’t have up to N5,000 in my pocket, whereas, I have money in my bank account. Nowadays, I do lots of my purchases with my ATM card. So when you also look at the political parties spending for the general election and the insecurity still rampaging with oil theft, there is no way we won’t enter recession in with our fragile GDP. Indeed, when the NBS is reviewing the Q1 2023 we are in now, because, we are already in March, the figures are not likely to be good for various sectors of the economy. So nothing is happening positively in our economy at the moment, rather than, election and many people outside there don’t have money. Not even at a period like this we have politicised the economy with the introduction of currency swap. It would be a miracle if the economy doesn’t slide into recession in Q1 2023. Because politicking has taken over the economy. So, we are bound to go into the recession.

What is your thought on the Supreme Court’s ruling on old naira notes and the CBN’s currency swap policy?

Has the ruling really met the expectations of Nigerians? What I will say is that it is very unfortunate that we have dragged the country’s judiciary into our monetary policy. Monetary policy that should ordinarily be defended by the Central Bank of Nigeria (CBN), we have now dragged our judiciary into it, which is not supposed to be. And it is because everybody is in a state of confusion and the only place you could run to was the judiciary. And the judiciary actually is not tenable to the monetary policy because, there are so much variables that determine how a monetary policy should take.

It should have been nice if we did not dragg the judiciary into it because we will only look at the facts before them and take a decision. And I was not surprised when at some point the judiciary too shied away from the issue, so that it does not put itself into disrepute, whereby blames would be put on the doorstep of the judiciary. It is for the l e g i s – lature to interpret the law and it is for government or the executive to run the economy for the benefit of the country and the in-terest of the ordinary people who they are serving for now, because we have politicised everything and it is better to take the matter to the court than to continue to protest. I commend the wisdom in which the judiciary handled the matter. I would give thumbs down to the executive and of course, the CBN is part of the executive, for taking us to this very torture and pitiful lurch.

These days you see people queuing up to collect money at the banks and it shouldn’t be like that. Yet, what the central bank told us why they did it (currency swap policy) was known to everybody but the fact they were not able to managed it also showed a sign of incompetence or because of other motives that are there, they have now brought politics into government’s contract. So, I will commend the gut showed by the judiciary for what they have done.

Do you think the apex bank should have complied with the Supreme Court ruling?

Indeed, the fallout and happenings from the Supreme Court’s ruling on the revalidation of the old notes as legal tender and the apex bank not making a definitive statement on it was not good for our economy at all. Now the Supreme Court had ordered that old notes should be accepted nationwide, but the problem is accepting it among Nigerians. Some people have been accepting it in some areas. If the banks could be giving it out to customers as payment at the counter, it means, it is valid as a legal tender and people shouldn’t reject it. I definitely know some people are accepting it.

I went to a store today, Globus Supermarket, and the lady attendant told me, they accept old notes. I even went to Spar at Adeola Odeku, Victoria Island and they also told me they were accepting old notes. So they have started accepting it. The report I got from the bank from some people is that banks have started paying the old notes. I don’t think any bank has responded to the report that the CBN has not asked them to pay old notes. So, the point here is, whether the CBN doesn’t know how to come out to the people or maybe, they have started the destruction of the old notes they have collected or they are taking inventories of the old notes in their custody before making a public statement? But I am very sure, the Central Bank has given them the go ahead to start paying the old notes.

Recently, President Muhammadu Buhari sent his apology to Nigerians about the economic hardships over the implementation of the new naira policy that he thought would boost our fragile economy?

Would you say the CBN’s currency swap policy has failed to lift up to peoples’ expectations? Of course.

You know the system was politically motivated because if you counted how many times the CBN postponed the ban on the old naira notes, you would realise that politics had set in. Unfortunately, I believe the CBN Governor was playing out a script from the executive because he kept going front and back and is like all the times he was going to his principal to inform him people were complaining he didn’t come back from his principal with positive answers. Again, not that he had not made his decision on the old naira notes yet, but he kept on going to President Buhari to get his backing and this is not acceptable. Despite the rancour over the debate on the old naira notes, and the various visitations to him by the CBN governor on the currency notes crisis, you could see Mr. President was so adamant in his attitude and he was in the best position to see the plight and hardship Nigerians were facing in getting the new naira notes from the banks, especially, when the crisis was getting out of hand he still kept telling Emefiele that he should not condone whatever the people are saying. So, I believe that President Buhari should take full responsibility for the mess over the new note policy and also for inflicting pains and sufferings on ordinary Nigerians. Besides, he has all the right to enter into dialogue with the aggrieved governors in some states in resolving the crisis amicably, but he allowed it to be prolonged to the extent of heading to the Supreme Court. Because he won’t deny that every time the CBN governor was going to him in Aso Rock that there was fire on the mountain and Nigerians were expecting him to intervene but he was adamant.

With the Supreme Court proposing December 31 for the old naira notes, would you suppor the stance calling for the resignation of the CBN governor and Minister of Justice, Malami, for misleading President Buhari on the currency swap?

I don’t think so and I don’t agree to the CBN governor tendering a resignation letter on this old naira notes crisis. I have already told you before that the person the bulk of this crisis stops on his desk is President Buhari. He was in a better position to call Emefiele to order, but, he kept on backing him in the first place.

Note this, the governor of the CBN cannot do all these things without President Buhari’s backing. And again, the governors wouldn’t have taken the matter to the Supreme Court if President Buhari acted responsibly as a listening President. If you read the Supreme Court’s judgment very well, you would see where it’s quoted under Section 232 of the constitution that states have a right to be consulted by President before the directive to the CBN, as constituents of the Federation. The Supreme Court added that CBN Act cannot rob this court of its original jurisdiction in this suit, stating that preliminary objections by AGF, Edo and Bayelsa are hereby dismissed.

In addition, the Supreme Court judge pointed out that the posievtion of the president as agent of the federation imposed a duty of consultation on him. Not to do so makes him a dictator. The directive given by the president through a press release by the CBN was invalid. In other countries, decisions to change currencies follow due process and in accordance with democratic dictates, not after a side talk with their central bank chiefs. With all these motions, you can see it is not the CBN governor or Minister of Justice that is supposed to resign their positions, rather the President Buhari should take full responsibility for all that happened with the naira notes saga.

What is the impact of the general election on the economy and possible challenges the incoming president is likely to face?

The election has brought more challenges to the standard of living of many Nigerians because people don’t have money to spend freely with this cashless policy. Now, you can only spend money that you have at hand not the one in the bank. If there is functional data, you would have seen that no major positives happened in the economy except politics in the Q1’23.

So, it’s a dependent economy driven by politics. During political there are lots of monies being spent on campaigns, people would do rallies, billboards, posters, adverts in the newspapers, television and jingo in radio stations across the country and many more. People would even organise parties here and there, in celebrations of those contesting for political positions. We spend a lot of money on politics that should have gone around for economic transformation and development. And you can hear some people even saying that lack of enough money in circulation was the cause of the low turnout during the general election. Now, I have money in my bank account but I can’t go to the ATM machine use my ATM card and get money or even go to the banking hall to get money. Somebody with salary can only get N5,000 from the bank, if you want N10,000, you will need to go to the POS where you will be charged N3,000 as commission. So definitely, the lack of funding of the political parties affected the low turnout of Nigerians during the general election. Some of the candidates were even owing their agents during the election. Some of the political parties could not mobilise crowd as they wanted due to lack of funds. So, in a nutshell, it has actually affected the performance, psyche and the enthusiasm of the people for the election.

Amidst the enormous macroeconomic challenges in the country, when do you think the GDP would start turning around positively for the best?

Second quarter is out of it, there is no miracle that will happen in Nigeria’s economy between now till second quarter or the first half of the year. If we are going to get out of this doldrum, we should be expecting marginal improvement in the GDP by the third quarter of this year.