... argues that Nigeria must grow rapidly to achieve vision 2020.
Professor Milton Iyoha is a World Class Professor. A product of the University of Yale, Prof. Iyoha was an Assistant Professor of Economics at the State University of New York at Buffalo from 1970 to 1975. A former Research Fellow at the Brookings Institution in Washington D.C., he joined the department of Economics and Statistics, University of Benin as a Senior Lecturer and pioneer Head of Department in 1975 and rose to the rank of full Professor in 1980.
He is also a former Dean of the Faculty of Social Sciences in the same University. He has served as a Consultant to the IMF, ILO, AERC, the World Bank, the United Nations Development Fund, UNECA, the West African Monetary Institute, WAIFEM, the NCEMA and many others. In this interview with the Economist Nigeria, he bares his mind on burning national economic issues and proffers solutions to the country's perennial economic challenges.
T.E: We would like to meet you Prof?
Prof: I am Professor Milton Iyoha of the University of Benin. I have been in the department since 1975. In fact, I was the principal head of department. We started it all. We set up the courses and many other things. I have been here and am still here (laughs).
T. E: How was growing up like as a young man?
Prof: I grew up mainly in Nigeria. I did my secondary school and HSC in Nigeria. I did my HSC at Government College, Ibadan. After that, I went to the US on scholarship through the African Scholarship Program of American Universities (ASPAUS).
That is the scholarship that took me through my undergraduate studies at Oberlin College in US. From there, I proceeded to Yale University for my post graduate degree, that is, for my masters and Ph. D program. I got my Ph. D in 1970. I am sure many of you were not born then (laughs).
T. E: What does it mean and what does it take to do an M.Sc and a Ph. D in a world class university like Yale?
Prof: Well, I would say it is rewarding but it is also a challenging task. It is just like in the University of Benin, where many students complain about the department of Economics and Statistics because they would say it is tough. However you look at it, it is good because you are learning.
You have to study to know something. Some students think they can have a degree without studying hard, but that is a contradiction in terms. Overall, studying in an American University is challenging.
As you know, the rules are clear and nobody is going to bend the rules for you. However, the reward is there just as the facilities are there and the teachers too just as we have in this department. Once you have a good teacher and your library facilities, you have no excuse but to study.
So, whenever I teach students I tell them to be ready to sit down and study. Students should read the material even before lectures and read their lecture notes; I tell them nothing can stop you from gaining understanding of the subject in question.
TE: How does it feel to be taught by a Nobel Laureate like Prof James Tobin?
Prof: Yea, it feels good, very good; Prof Tobin is a great teacher. He is one of the best teachers I have ever met . In Yale, I would choose him and Prof. Richard Cooper. Cooper was my Ph.D supervisor but Tobin is a natural teacher.
I always say that if Tobin teaches you something and you don’t know it, you may as well go and commit suicide because you may never know it. Tobin would start from the beginning; he is a very nice teacher. You know a Nobel prize is good, but being a good teacher is by gift.
Tobin is a naturally- gifted teacher. There was something written in the Yale magazine on Tobin after he had died. The publication says that even as an emeritus Professor, he was still teaching in Yale. In fact, on one occasion, one of the junior faculty members was sick and could not teach and Tobin went to teach the class. You see, he was so passionate about teaching. And again, it is not only knowing the material, you must know how to communicate it.
T. E: Tell us about the great Economists that you passed through.
Prof: Tobin and Cooper were my best teachers and they influenced me a lot to the extent that when I left Yale, I began to publish in the area of growth because Tobin taught us growth theory. Of course, because of Cooper too, I decided to do my dissertation in International Monetary Economics because Cooper is an expert in trade. A good teacher would inspire you to toe a particular academic path.
In my undergraduate days, I was taught by Thomas Demburg, who exposed me to macroeconomics, and at postgraduate level, Tobin taught me macroeconomics again and since that time, I have been a “macro man.” There is no way I can leave macroeconomics (laughs). Other Professors included Filner and Trilfin and Prof Rennisfer who taught me Development economics.
T. E: Sir, why did you choose to study Economics?
Prof: A good point. I don’t remember very well, but I remember after my HSC in Ibadan. I did three subjects-Geography, History, Economic History and British Constitution. At that time, Economics was not taught as a subject as such. I got good grades and was actually admitted to Ibadan to do a B.SC in Geography but then I got admission in the University of Sussex, England to study Economics and got a scholarship again to go to US and study Economics and so, I decided to go to America.
T. E: Sir, how do we compare a typical department of Economics in Nigeria and the equivalent in Yale.
Prof: Well, no, you cannot compare but that is not surprising, because even the size and the pedigree are not comparable. You can’t compare the top US Universities with what is obtained down here. In Columbia for example, 90% per cent of the Academic staff are all full Professors and we are talking of world class professors.
So, we cannot really compare because we are not yet at that level. And what even kills us in Nigeria is that many of our accomplished Professors leave the Universities. Somebody after becoming a Vice-Chancellor abandons the classroom. Some people after becoming ministers also abandon the classroom.
A friend of mine, Prof Emmanuel Edozien after being made an Economic Adviser to former president shagari decided to leave University of Ibadan for Michigan. So, it happens that you cannot really compare. And you don’t really blame academicians, because we don’t treat academicians as we should treat them and so they can get discouraged and leave the system.
In America, they take care of their Professors and provide funds for their research. And so a Professor can hire Ph. D students to work with him on a research project. So the environment, culture, facilities are all different. In this country, we don’t appreciate academicians and that is very pathetic.
Academicians are very committed people and they don’t really want much, they just want what will sustain them. For me, personally I have gotten job offers at the IMF institute but I abandoned them to come and teach in the University of Benin. Later in 2000, when I visited the IMF institute as a research scholar, the Director of the IMF institute, Mohsin Khan invited me to lunch and I mentioned that I had turned down employment at the IMF institute twice.
He said “Milton, if you had come, you would have been my boss.” So, I would have been Director of the IMF institute but I turned the offer down to come and teach in Nigeria. So, this is patriotism. Academics are patriots. If we want to become millionaires, we won’t be in the Universities.
T. E: Sir, what is your view on the current cashless economy policy of the central bank?
Prof: Yes, I think it is premature. What has killed Nigeria is the military attitude of Nigerians, no thanks to our military experience. Cashless economic policy is good but it is not an issue that you should just wake up one morning and enforce a decree on people. It is not by decree, it is by evolution.
If I go to the United States, I would have no need to hold cash because the system has developed. But here, the institutions and the environment for the policy have not fully evolved. It is like putting the cart before the horse. You must first grow the institutions, improve infrastructure and create the needed environment.
So, the policy is premature and not well thought out. Even Government agencies like the PHCN do not accept cheques. If purchases can be conveniently made without cash, nobody in his right senses would like to hold cash but we are not yet ripe for it. You must ensure that people don’t have need to hold cash just as it is in US and UK. You don’t force the policy on them. It is an issue of convenience.
T. E: Sir, following the banking reforms by the Central Bank of Nigeria, would you say that Nigerian banks are healthy?
Prof: Health is relative. The banks are relatively healthy. Soludo did a good job in 2005 but you know there could be slippages. The recapitalisation was a good job but the banking system is dynamic just as life is. You may think the system is okay today and tomorrow things might change. So, tomorrow, you must be on your toes and that is why regulations and surveillance must be continuous. In other words, as a regulator, you must not rest on your oars.
T. E: Sir, what is your take on the recent deregulation of the downstream sub-sector of the petroleum industry?
Prof: Is there deregulation? How did they deregulate it? You see people use words anyhow. There is no deregulation. Is removing fuel subsidy deregulation? This is madness! This is anti-economics. If you want to see a deregulated downstream sub-sector, go to the United States.
On a long street in US, you will see different petrol stations selling at different pump prices. Even in Nairobi, Kenya, you would see a properly deregulated downstream sector. You don’t set the pump price at N97 and say you have deregulated. In fact, if there is deregulation, then we should not have any agency like PPPRA. So there is a contradiction in terms.
They just wanted to remove the subsidy, but that is not even the issue. Oil subsidy is a symptom of a problem and that is the fact that Nigeria is not refining its crude. Government is chasing shadows instead of confronting the problem. Why don’t we build new refineries and ensure existing refineries operate at optimum capacity. For now, government is still running around the problem.
T. E: Sir, what could have been responsible for the European debt crisis and how do African countries avoid such an experience?
Prof: What is behind the debt crisis in Europe is essentially high fiscal deficits. That is the problem facing Greece. It is the same problem that Ireland, Spain and Portugal faced. Mind you, the Maastricht treaty designed in 1992 set fiscal deficit limit for European Union at 3 to 5% but that did not work out. As you know, the challenge of economic integration is the emphasis on monetary integration leaving the fiscal aspect very loose. Much of budgeting in the Euro zone is highly discretionary. Political leaders want to control budgeting and fiscal spending.
The issue is not monetary policy because there is a European Central Bank and so interest rate in the Euro zone is usually stable. However, non-adherence to the fiscal deficit limit set by the Union is the challenge. So, the Euro zone crisis is essentially one of poor fiscal policies, high fiscal deficits which result in high debt. Servicing debt is not very easy. Nigeria was once in that situation in the 1990s and early 2000, that is why we should follow the bible's injunction that it is better to be a lender than a borrower. The solution therefore is proper fiscal policy. In a layman’s language, the Greeks must live without their means. So, Europe must tighten up their fiscal framework - that is the only way to avoid high debts and the risk of default.
T. E: Sir, Nigerian’s debt profile is fast rising again. Is there a cause for alarm?
Prof: Yea, Nigeria’s debt profile is rising, but not as much as it was before. Ngozi Okonjo Iweala intervened in 2003 and negotiated to clear the debt. But the politicians especially the corrupt ones have forgotten where we are coming from by engaging in fiscal rascality. When you borrow from abroad, it is easy to steal from it.
Nigeria is a rich country; the money and capital markets are there, government can raise funds from these market. Domestic debts are preferable because you owe them to yourself. But you must note that as long as the debt income ratio is manageable, then there is no cause for alarm. The challenge comes when debts are rising astronomically but the debt profile is quite manageable now.
T. E: You have consulted for many International organisations like the UNDP, the ECA, and others. What exactly do you do for them?
Prof: Yea, it depends on what they want (laughs). When you consult, you help to solve organisational problems. A consultant is simply a person you think is knowledgeable about a subject and that can guide you in achieving a particular result. In Nigeria, we use consultants too. During the banking consolidation exercise, Prof. Soludo employed some consultants.
T. E: Sir, what is the relevance of economic research in National Development?
Prof: When I did my inaugural lecture, the topic was “Nigeria, when will African sleeping giant arise?” Yes, because Nigeria is a giant only that we are asleep. China, the erstwhile sleeping giant of Asia is already awake, same goes for India. These are the two most dynamic economies in the world. China of course is the 2nd biggest economy in the world. In my inaugural lecture, I compared Nigeria and China who had the same per capita income at a time but now China has made much more Progress.
How did they do it? It is through proper economic policy and that is where research comes in. The civilian administration of Olusegun Obasanjo tried in this regard. But between 1960 and 2000, average annual economic growth was about 3. 7% and population growth was about 3%. This means per capita income growth was at less than 1%. In that situation, you cannot make much progress. You see, studies by the United Nations and World Bank have shown that if a country must alleviate poverty, she must grow at about 7% per annum. China particularly since 1982 has been growing at an average of 9 to 10%. So, that is exactly what makes the difference.
T. E: Sir, what would Nigeria do to achieve the Nigerian vision 20: 2020(NV20:2020)
Prof: All you need to do is to grow rapidly. If you are growing at about 10% per annum for instance, use your compound interest table and you will know where you will be in 2020. You need good economic strategies. China for example, was able to develop industrial and free trade zones. So you must adopt sound economic policies.
T. E: Sir, do you feel fulfilled as an economist?
Prof: By and Large yes. As you know the pinnacle in academics is professorship, and I became a professor in 1980. I am interested in teaching and research. I am still working because it is a continuous thing. In the next three years, if you come to see me, you would see that my CV has improved.
T. E: Sir, if you were not an Economist, what would you have been?
Prof: I don’t really know but maybe I would have been in business, not as an entrepreneur as such, but as a CEO in one of these big companies. Yes, because there also, you use your brains to create wealth. But am very satisfied with being a Professor.
T. E: Sir, so far, any regrets in life?
Prof: Not really, I thank God for my life. I am happy for what God has done for me, my academic career, children and good health. I thank God for his mercies.
T. E: Sir, what is your advice for young Economists?
Prof: Work, work and work. You must sit down in a chair and study. Some people think they can just take it easy. No, because the heights by which great men reached and kept were not by sudden tries and tales, but they, while their companions slept, they kept toiling around at night. Studying hard is the only way. When you do that, anywhere you go, you will make it. So, get as much as you can out of your lecturers and out of your texts, it pays a whole lot of dividends.
T. E: Sir, thank you very much for your audience.
Prof: You are welcome
culled from http://theeconomistng.blogspot.com/
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