Nigeria Will Be Out of Recession in 2018 – Statistician General Dr. Yemi Kale
….All things Being Equal
Dr Yemi Kale, the Statistician General of the federation does not need any introduction going by his antecedents in the last six years on the saddle.
That Dr. Kale restored sanity in the nation’s statistical processes and always stood his ground when published data were criticized and disputed is no more news. In conjunction with relevant authorities and development partners, he has painstakingly executed critical reforms which has strengthened the nation’s apex statistical agency.
Going by the credible data that has helped in the county’s planning most especially in these trying times, it is not surprising that the current administration deemed it fit to give Dr. Kale another opportunity to fine-tune other areas in order to bring about the desired goal in the nation’s development agenda.
With the stamp of approval for all the reforms that have been brought to bear on the agency, government is expected to reciprocate by adequately funding the agency, if it means well for accurate data provision to policy making and implementation.
In this interview with a crew of Economic Confidential led by the Managing Editor, Ewache Ajefu, the ever articulate helmsman of the NBS reveals that the country is technically out of recession and will be out of it in 2018 all things being equal. Excerpts:
EC: Please Tell us the structure of National Bureau of Statistics(NBS)?
SG: The National Bureau of Statistics(NBS) has about three thousand (3000) staff spread across the 36 states and the Federal Capital territory. We have six zonal offices and we also have three Schools of Statistics. Our staff at the offices go to the fields and get data from companies, towns and villages by gathering data for onward transfer to the head office. If they don’t get the data, there is no way we can manufacture data at the headquarters here. Their activities have two advantages. The first is that we do not have to spend money for transport and logistics all the time apart from the fact that they are in the community and used to the people at that level as they move about freely because they understand their locations very well. Added to that is the fact that they equally know the languages of the that locality. This makes the whole process of collecting these information a lot more easier as against a random person just appeared from Abuja and the people will be wondering where is this one coming from.
How are you able to maintain offices throughout the federation?
It is not always easy to maintain such offices given the level of resources at our disposal. When I got to this office, I heard that my predecessor was receiving about N58 million monthly. But when I took over, that was six years ago I was getting about N26 million and it has gone down to N10 million monthly since last year! So, when you receive N10 million monthly to run all these offices, it cannot be easy. Now if we get our capital budget, that is where our data budget is. But you cannot use capital budget to run recurrent which you know is illegal. We just have to find creative ways of managing the money. I am very fortunate to have dedicated and committed staff IN NBS. We just have to appeal to them because as you can see you cannot publish inflation numbers of January in June. If that is done people will ask of what use will that information be? We have to keep it regular and I can assure most times the money did not come and some of my staff have used their money and we pay back later. I think my staff trust me so far because I always pay back. If we shrug our shoulders and say until money comes, there will be no data. We cannot just stop and sit back because this information we give to government are essential ingredients of planning.
How adequate is the funding of your organisation?
Just think of our electricity bill for the headquarters alone is N2.5million to N3million monthly because of data centre where you need power 24/7. By the time you add up all the state offices, it will run to about N4 to N5 million monthly. Take that one alone from the N10 million and you are left with about N5million which may not be enough to pay for security, cleaning water, diesel and the rest of them. Because of lack of funds we were disconnected from the public power supply. Sometimes I might decide when to put on our generator. It might be that between Monday and Tuesday in the hour of 10am and 4pm staff should do their work because there might not be light the following two or three days! We just have to find creative ways of helping ourselves. Sometimes when we push out our data and they clap for us we take them with stride because we know how they emerge. To be fair to government, attention to data has been increasing. I can tell you that Economic Management Team chaired by the Vice President and the Monetary Policy Committee of the (CBN) do give me a lot of opportunities in their meetings to throw more light on issues even though I am not a member. So there is a lot more attention government is giving to data now. But at this point in time we are experiencing financial crunch, they want to support us but the resources are just not there.
EC: Some Nigerians have difficulty believing the figures when you push them out. Why is this?
SG: I was also one of these Nigerians before I got this job. I quite understand how they feel. I think that the number of people that are not believing the figures are reducing significantly over time. A lot more people are relying on our data than ever before. This include both nationally and internationally. I don’t think their belief will go to the extent that we sit down here at the headquarters and push any numbers just like that. That we sat down and the President said you should change figures, haba that will not be and it will not happen. Look, Nigerians have gone through a long process where they believe that government has been lying to them for years and so cannot trust government. The first thing is that there is a default. Anything government should be queried. If you are used to that system for years, it will take a while for you to believe. Secondly is the problem we have with averages. Take inflation for example. A lot of people do not understand how it is computed, especially the methodology. If I go to your house and you told me you bought your bag of rice for N10,000.00 and the inflation rate has gone to 50 % and take it that its two of you living in that country. If I take the average between the two, that is 10% plus 50% and divide by two to get thirty percent, he will say it’s a lie. He will never agree and the notion is that we are doctoring the figures for government because he knows the price he bought his rice. Its 50% higher and how come you say 30%! Everybody thinks is particular situation is repeated everywhere in the country, its not so. Now look at this scenario. Where yam is grown in the north and sent to Lagos, the prices cannot be the same thing. Because in the north the yams are so many and cheaper and by the time they are transported through several check points and pay for storage, you can be sure that prices would be added. So their prices would be completely different. So the NBS is taking the national average between the highest and the lowest and if you happen to be the highest, it’s a lie! Even on employment, you someone that has five unemployed people in his house, and that of the person having two and also someone who has none. So when you find the average, the person with five will say NBS is not serious.
EC: Please can you expatiate, probably by using the GDP as an example?
SG: Okay. Let me use the Gross Domestic Product(GDP) as well. Assuming we have only two companies in the country. The first year company A did one hundred. And Company B did one hundred and the total is two hundred. In the second year company B did 300 and company A did zero. The total is 300. NBS would say GDP rose from 200 to 300. The people that sacked workers would say what do you mean when we sacked workers because according to them its no reality on ground. They react based on how it affects them. Those that would talk are the ones angry because it does not reflect their numbers. The problem is not in the figures, but the fact that it is showing government the income inequality figures. And that will also tell government to come up with a policy so that this inequality can be corrected and make it better. The problem is not in the figures but though Nigeria is a rich country but the wealth is concentrated on a few individuals. So the people will say they do not feel the impact of the GDP, and how come you have pushed out such figures.
EC: Are you under any pressure to give out figures?
SG: I am not saying whether in the past or now that people have not implied or suggested. When you say pressure, pressure is what you put on yourself. Am I feeling pressured to doctor figures NO. Just to let you know that I am not pressured because nobody will meet me to change figures because they know I will not do it. If you don’t want to embarrass yourself, don’t bother asking me in the first place. That is one thing I have said is important for the country, not because I am a bit stubborn or because I want to win public officer of the year, but because I think these figures are vitally important for the country. You cannot solve Nigeria’s problem without understanding what they are. There is this Governor I met and will tell you he will create 100,000 jobs in his first tenure. And I told him who said you need 100,000 jobs in your state? He kept quiet and said what do you mean. I said Mr Governor how do you know that its not 200,000 you require or better still 50,000.! You have to sit and know how many people need jobs in your state, their qualifications, ages, male and female numbers and sit down to calculate how many would be doctors, lawyers, nurses.
EC: In essence, how can the data be useful, especially for government?
SG: It is from the data that a governor can now tell his commissioner for education there a lot of people coming out of the universities with teaching degrees in two years and start building opportunities for them in the various fields as they come out. May be creating enough hospitals to absorb doctors and nurses that are soon to graduate and so on. Then change your budget to the realities on ground. That is how its done. You do not just create jobs any how! Data is just vital that it cannot be compromised. We have had many good policies in Nigeria over the years but they don’t work. It because of not using the right data. There is a Governor who was angry when we released the poverty figures. He was supposed to be one of the better performing governors. He saw the figures as poverty increasing in his state and said the figures are not correct. He said “I works and close at 11pm daily because of my people, how come you said my people are poor.” And to be fair to him he was working. He invited me to his state and took me round several projects that have been commissioned, especially the wonderful roads he was building everywhere. I told him and showed him the map of what he has done. All the roads you opened were done in the rich peoples’ areas. So he opened roads where nobody was poor and did not do any roads where the poor people lived and farmed. The roads were opened in the wrong places. If he had checked the data, it would have shown you the best place to open the roads so that poor people could get their farm produce from the hinterlands to the markets in town.
EC: How do you rate the Economy now after latest data you released?
SG: Well the year 2016 was extremely difficult for the nation. I have to speak frankly as I have always done in the past. The economy has been slowing down since 2014. Anybody that has been following the numbers should know that the economy was slowing down. From six it went to five then to four, then to three and went to two before it became negative. The fact that the economy was slowing down did not mean it went from six to zero NO. It was gradual. If you are paying attention to data, you would have known that problem was looming. Since it was an election year, people did not pay that rapped attention.
EC: In that case, how can you rate 2016?
SG: The Year 2016 was horrible as we went through a lot of hell. We had an economy in my opinion that is dysfunctional. The economy is like a house built on three foundations, but two of the foundations are shaky and weak. You have an oil sector which is one pillar, a non-oil sector dependent on oil, which is the second pillar, and we have a non-oil sector not dependent on oil, like agriculture, which is the third pillar. Two pillars are directly dependent on oil. So when oil decides to collapse, two legs will be gone and remaining one pillar. And that is the problem we had. Rather than diversify the economy, we have an economy solely dependent on oil. The other sectors depend on oil to survive. We have manufacturing, but their production input is dependent on foreign materials. And foreign inputs depend on foreign reserves, while our foreign reserves depend on oil. And when oil price goes down, and we do not have enough reserves, and manufacturers do not get foreign exchange to get their inputs, they cannot produce and so resort to black market to source for foreign exchange at high price and cost of production goes up. This cost will eventually be passed to consumers. In this scenario, demand goes down while cost goes up. It was an extremely difficult period and we all felt it.
How will you rate the economy now?
I will say that most of the indicators suggest that we are coming out of it. We have not come out of it yet. As if the worst has already happened and it’s a slow process of recovery. Now there is what we call technical recovery as different from the recovery Nigerians would prefer. When you tell somebody the economy is coming out of recession, they would ask what do you mean. After all prices are still high. Coming out of recession means positive growth. And your positive growth can be plus zero point one (+0.1). That does not mean everything is fine. It technically means you are no longer in negative again. The fact that you are no longer in negative does not translate to be buoyant. There is going to be a gradual process of recovery. Definitely things are improving. At least all the indicators are suggesting things are getting better. People always make this mistake when we say inflation is slowing down. Slowing down of Inflation does not mean prices are coming down. Inflation by definition is always a rise in price. All we are saying is that increase is not as much as before. Before it went up by 100%, but this time it went up by 50%. Having double digit inflation figure is still huge and a problem. The fact that it went down from 18% to 17% and now to 16% shows improvement. But I can tell you 16% is not good but a huge problem. If the trend continues, by the end of the year things should have normalized and by 2018 Nigerians would now see the benefit of the recovery. If all prices do not collapse including Niger Delta crisis, by 2018 we would have recovered.
EC: Any improvement in your budgetary provisions?
SG: The budget for NBS has been volatile. It goes up and down. But consistent in the last two years, there is an attempt to increase the budget. The budgetary releases and allocation have improved, but is it enough to run the office, NO. Its not sufficient I must say. Our budget this year coming from N700 million is N1 billion. That is for data collection and collation countrywide. South Africa’s equivalent is about N28 billion. That is what they collect as their budget for data annually. Our style in NBS is that we don’t go out begging for money as others do. We prefer to use the output with the little money you have given us. We manage whatever we have and do the best we can. We hope to impress you with our output and it is you who will say haba give NBS more money. During the budget defense I told them that we obviously need more money than this as we have prioritized every little thing you have given to us and we commit on delivering as we will never miss our target. Last year, we said every report we want to deliver we did. Anytime we hear most MDAs returns billions of Naira to the treasury, I shook my head. I think this office needs about N4 to N5 billion every year. I mentioned about four years ago that give between N4 to N5 billion every year, I will give you 95 percent data you require. If I do not make it I resign. I have to insist it is improving. The attitude of the current government to data is extremely strong. That my tenure was renewed shocked many persons. I was indifferent because I said all I care about is leaving a place better than I met it.
EC: Is it possible to rebase the economy in a recession?
SG: We are supposed to rebase the economy every five years. We are supposed to have to done it this year, but no allocation to that effect. Every country does it maximum five years. The United States of America does it once a year. Those ones have more money, so they do it every year, apart from the fact that their economy is more dynamic. Technology is changing so many things so they have to upgrade all the time. If you don’t rebase your economy, it is like as if you are using Betamark system. When we rebased the economy, the politicians grabbed it because it favored them. If it were in the negative, nobody will even talk about it. I was surprised to see at the election period that APC went to our website to retrieve all the positive figures and refused to accept the ones tagged negative. PDP too took all the positive and refused the poverty rate figures! Meanwhile all of them are NBS data. I have seen Minister who agreed with chapter two of our report and said chapter three was not correct. While commending us for a job well done on chapter two, chapter three was tagged not correct. The same document!
EC: How do you gather data for the Internally Generated Revenue(IGR) for states?
SG: The states have what we call Inland Revenue Services, MDAs revenue generating agencies such drivers licensing and Pay as you earn(PAYEE). They are meant to send whatever revenue is in that account and that is where we get our data.
EC: Any word for your critics?
SG: My policy which I have done many times is that if you do not believe what we are doing, our strategy is to open all our doors. I have challenged everyone on social media criticizing us that, they should come and join the field work. They can pick any state of their choice, observe our staff as they collect the information on the field. Follow them around and stand by them as they collect the data. When you are through from the field, come to the headquarters where processing is going on for observation. You are allowed to ask any question while the process is ongoing. Transparency is the best way to deal with doubts. I remember one of my critics fainted in the course of the observation. The first time some ten journalists followed us in these exercises and they refused to go for the next round of data collection because its tedious and stressful. Some Nigerian terrains are not good with water logged and others mountainous in nature. In South-south for instance you cross many rivers with boats and ferries. I have to commend my staff for believing in me and committed to the cause. They complain as every other person but they still do the work. I hear their complaints a lot but they still do their work. They understand the importance of their calling.