Nigeria Needs Stable Legal And Economic Framework To Attract Foreign Investment —Adebayo

Prince Adewole Adebayo is a lawyer and former SDP presidential candidate. In this interview with TITILOPE JOSEPH he criticises the Nigerian government for exploiting citizens, comparing it to colonial rule. He notes the lack of infrastructure and policies needed for productivity as well as government’s imposition of heavy taxes hinder global competitiveness, just as tax holidays meant to encourage development have instead become a tool for corruption and mismanagement under the current governance framework. Excepts:

How important is the rule of law in driving economic growth and attracting investment, and what role would it have played in your economic policies if you had won the election?

One of the tools you need for at­tracting foreign direct investment is a stable or predictable foreign exchange. But even that is not enough. You need to have respect for contracts, you need to have a rule of law, security, and a good justice system. These are essential because if people are to bring their industry here, they need assurances that their investments are protected. Without these fundamental elements, it becomes difficult to foster an environment where businesses can thrive. That’s why, in my approach, I would have focused on creating a stable legal and economic frame­work to encourage productivity and investment.

How effective is offering a tax holiday as an economic incentive, especially within the current legal and governance framework?

From a legal standpoint, a tax holiday can be a legitimate economic tool to encourage investment, but in the current governance context, it has become a loophole for corruption and mismanagement. Instead of using tax holidays to genuinely support infrastructure and development, they are often exploited by award­ing large contracts to entities that under-deliver on quality, with roads and other public works be­ing poorly constructed. These proj­ ects are often overpriced, lacking standardisation, and could have been managed more efficiently at the local government level. The legal and regulatory framework should be strengthened to ensure accountability and proper use of public funds, rather than allowing tax holidays to serve as a cover for financial misconduct.

What is your perspective on the proposed personal income tax rate for the wealthy in Nigeria?

If the government taxes me (I Adebayo), I am ready to pay 50% of my income in tax. I don’t mind. Af­ter all, in Norway, it is higher than that. But I am spending billions, literally, to power my productive en­terprises. But you cannot pauperise us, take all the taxes, and still not be responsible for anything. Anyone who tells you that we should remove subsidy from an underdeveloped economy where productivity is low had F9 in economics. In Nigeria. What is there to incentivise produc­tivity? Nothing.

What’s your take on the Renewed Hope Agenda?

If you look at the content of the Renewed Hope Agenda, when renewal of hope starts with removal of your roof over your head, removal of food from your mouth, removal of support for industry and maintaining normal living. When the method chosen is the most damaging of all the options. If I have a cold and there

are five doctors . One says go and have a rest. The second says take warm liquid. The other says he wants to do brain surgery for me. The one that wants to do brain surgery is not qualified to be a doctor because the solution he wants to give me is worse than the problem i have. That is what I see in this scenario. Everything that brought us to where we are today is because of three major problems. One, Buhari, because of economic illiteracy and lack of awareness. Remember his mantra of “I am not aware.” “I am not aware”. I am not aware. He was not able to govern physically such that his government was always doing ways and means; always borrowing and borrowing. Second, they wouldn’t govern any proper administration, such that the subsidy they said they were going to remove balloon out of propor­tion from their hands. Third, they couldn’t grow the GDP effectively. These are simple problems you have from time to time. But look at the solutions Tinubu, Atiku, and even Peter Obi brought forward, a solution that does not make any economic sense. The solution was that they are going to remove subsidy from a product that is transcendental product. Nobody buys petrol to drink like wine. You buy petrol to do an activity, to trav­el or to work, it is a productive use of energy which cuts across every field. We had the supply side of our foreign exchange, nothing more than that.

Our foreign exchange hasn’t grown in 30 years. So if you have the supply side, saying that you are going to float it, where is the supply going to come from? The assumption is that some external support will bring in foreign direct investments. But if you want to have a good home, having a nice bedsheets is one of them. But having nice bed­ sheets won’t guarantee of hav­ing a good home because if the roof is leaking, that bedsheets will no longer be nice over time. One of the tools you need for having foreign direct investment is a stable or predictable foreign exchange. But even that is not enough. You need to have respect for the contract. You need to have a rule of law. You need to have security. You need to have a good justice system. You need to have lower cost of factors so that if I am bringing my industry and I am producing like Aliko Dan­gote who is selling fuel. How is he going to sell fuel to somebody who is in Sokoto? Are you telling me that in this 2024, anybody will conceive that you will be trucking fuel in Lekki, Lagos to Maiduguri? Then you will be trucking it to Calabar and other places. It does not make any sense. These are some of the problems we had which they came to worsen it the more. That is the problem they have now which is why I feel bad that a very simple economic situation that needs few mea­sure of government discipline, you didn’t take any of that, you expanded the government beyond, even in the government prioriti­sation, government expenditure, you are spending money on the least productive of items and then you yank off support from the economy. They created inflation and then turned the CBN gover­nor to Paul Folca, and now, he had to “Folcarise” the economy raising interest rates.

How does Nigeria’s inflation differ from the inflation faced by the U.S. under President Carter, and why would raising interest rates be prob­lematic here?

The problem Paul Volcker had when he was appointed by Pres­ident Carter as chairman of the Federal Reserve was that Carter had inherited high inflation from Nixon and Ford. He thought the only way to kill high inflation was to raise interest rates because cheap credit was driving it. But our inflation in Nigeria is not driv­en by cheap credit. In fact, there is not sufficient banking penetra­tion, and the lending capacity of our banks is so small that even regional and community banks overseas have more money than the largest bank in Nigeria.

Do you think the mindset of emerg­ing leaders affects productivity in governance?

These people don’t want to emerge as leaders. They want to take control of the tap of money. They don’t want to lead you be­cause if you are leading, you look back sometimes to see whether your people are following you. You are now being exploited by your own people who are exporting your own money overseas because they want their names to appear as one of the richest persons in town. We need to stop that because we are growing a large population that needs to be productive and express their talent. The essence of government is to back you up.