Ideas Untrapped

I spoke to Dr. Ike Anya, a public health physician and consultant on how Nigeria is responding to COVID-19. We also talked about the funding of the health sector, quality of services, and the many compromises involved in decisions about public health. I found Ike’s optimism hopeful, and his insights are enlightening. Many thanks to him for having this chat. For those who want to volunteer, you can sift through his Twitter feed here for the available channels. You can also listen/download this conversation on Stitcher here

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.ideasuntrapped.com

Akin Oyebode returns to the show to talk about the many implications of COVID-19, the government’s response, and why we need to confront the threat head-on. Please note he is not speaking on behalf of his office or the government. This was recorded on the 28th of March before the Presidential address and the subsequent lockdown of Lagos, Ogun state, and the FCT. Akin foreshadowed a lot of what played out in his analysis, and many thanks to him for sharing.

The listening options are the same (Stitcher here). Thank you and keep keeping safe.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.ideasuntrapped.com

I spoke with Adedayo Bakare on the many economic implications that COVID-19 will have in Nigeria. We also talked about the precarious situation it has put Nigeria fiscally - given the collapse of public revenue from the oil price crash. The conversation started with an essay Adedayo co-wrote on the palliative measures the government can take to ease the pain. Many thanks to Adedayo for always willing to share his thoughts and insights. You can also listen or download here on Stitcher. Thanks, and please stay safe. Here is the NCDC Guidance for Employers and Businesses in Nigeria.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.ideasuntrapped.com

This is the first of a series of conversations that will explore issues surrounding COVID-19. Some societies and systems will be permanently altered after the pandemic - and it is important for us to assess the current state of the world in other to design a better one. I spoke to Feyi Fawehinmi on the divergent institutional responses to the crisis, particularly on the nuances of authoritarian approaches compared to more democratic ones. Feyi is one of the most spontaneous thinkers I know, as the entire conversation was “off-the-cuff”. He is also one of the biggest supporters of this project from the start. Many thanks to him for doing this.

As usual, you can listen or download - you can also listen and download on Stitcher here. Thank you all for listening. Please stay safe

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.ideasuntrapped.com

My conversation with Akin Oyebode is now up. Akin has been the model public servant in most young business and progressive circles that I am aware of in the last decade or more. He’s also had a previous successful career in the financial industry and has been brilliantly recalibrating to what I think our expectations should be about the public sector. We delve into his current job, and how that shapes his outlook on public service. We also talked about several important reforms he wants to help jumpstart in Ekiti State. Akin is a practising pragmatist with the values of a progressive idealist. You can listen or download, for much more interesting insights (you can also listen on Stitcher here)

Transcript

Tobi: This is Ideas Untrapped, and I am here with Akin Oyebode. Akin is an economist and currently, he is the special adviser to the Ekiti State Government on investment, trade and innovation. Welcome Akin.

Akin: Thank you very much. Thank you for having me.

Tobi: You came from the private sector, what are the cultural differences between public service and the private sector? There was this analogy I got from Arnold Kling where he said: public institutions usually have a culture of 'no', where they are big enough and it's very easy to say no and changes only happen at the margins, unlike private institutions or startups where they start from 'yes' and they can really really drive change fast. What has your experience been in that regard?

Akin: I think you have to understand that (some) public service and private sector have two fairly distinct outcomes and Taleb's skin in the game theory, for me, is what holds very strongly here. In the private sector, you could argue that as an employee sometimes you're a shareholder, sometimes your reward is directly tied to the performance of the firm. So in a way you have skin in the game. You have some skin in the game. Founders of businesses which tend obviously more along the startup space, those guys have full skin in the game. Their lives are almost tied... they're like Siamese twins to the company. So if you look at the founders of, say, PayStack or Flutterwave; these guys have left the comfort of their day jobs to go and set up businesses. They're taking the biggest bets of their lives on these businesses. It's like you going to a surgeon, you're going to choose the best surgeon possible because if he makes a mistake, you're dead. Public service tends to be fairly different in the sense that, first: the reward structure is more annuity-based. So you are rewarded for not making mistakes. The fewer mistakes you make the better. So, even if you don't change anything, as long as you've not significantly damaged anything - you haven't stolen money - you're likely to have a 30-40-year career. So the incentives are not aligned towards innovation, that's the first thing. And that tends to make people a lot more cautious. Also because they're not significantly affected by the outcomes, that also creates a moral concern for me.

If you think about healthcare, if you think about education, you could argue that my children will go to fairly decent schools regardless of the quality of education overall in the country. And so because of those misalignments in incentives and outcomes, you tend to find that people will play it safe because they themselves are not significantly invested in those outcomes. If you take my current role, I've gone to Ekiti State to support...

Clears throat

Akin: The development work going on there, but you can argue that "look, many of the things that I will be involved in, I might not necessarily be the beneficiary or it might not impact me directly." So if you sign off on a firm building a rice mill in a certain community, you don't live in that community, you don't deal with the environmental challenges that come with that decision, so you are not as invested in the outcomes as the people who live in those communities. But I think some of the things that can change is, for example, aligning incentives properly, rewarding people for taking risk (some level of risk). There are areas where I think that risk-taking is not important - things that have to do with lives, things like aviation. I will not advocate for cutting-edge technology or improvements in aviation if we cannot be sure, 100 percent, that it improves the safety outcomes. Things like healthcare - approving drugs, for example. You want to test and test and test and be sure there are no adverse effects. The food and drugs department, for example - NAFDAC - is not the place where people will have lots of crazy ideas. But improving transport, improving tourism, improving production; I think government has to be a lot more, I'll say, open to fresh ideas. And I think it's happening across the country in pockets where you're now starting to see younger people, people with private sector experience going into government and hopefully, we're a critical mass and we're able to influence significant changes in governance.

But I agree, 100 percent, with that philosophy that improvement in government will not be radical for the foreseeable future and it tends to happen at the margins because it's also less disruptive...

Tobi: Yeah.

Akin: It's easy for the mainstream public service to say "hey, this is how we do things." It's something that you hear in government and I've worked for two governments now so it's not an Ekiti problem. I'll ask someone: why do we do this this way? Why do we charge these 5 levies? And the person says "oh, but this is how it was always charged" and then when you go and you dig deeper, you find that it was just one man who just sat down one day and said "oh, charge this amount as a levy for trying to get a C of O. It's not because there was some science to it, it's not because it was researched or evidence-based, it was just the guy's belief at the time. And so it tells you that it's almost two things: on one side, one person can actually make a significant change; but when that person does, to unwind some of the negative outcomes of those kinds of changes take forever to happen. So you almost must be in the stubborn minority. You must be that guy who feels like "I can make things happen" and then start to build a critical mass of those people and eventually I think we'll see government become a bit more innovative. But it's not going to be NASA...

Tobi: [Laughs]

Akin: It's not going to be Google, it's still government but you'll see some changes happen.

Tobi: It's interesting you mentioned incentives. Do you think that public servants are properly rewarded, in terms of pay?

Akin: You know that's a question where I have skin in the game.

Laughs

Akin: I honestly don't feel that...there are two issues here. One is that I don't think public servants are well-paid, but the second issues that I also don't think that the public service is productive enough today to ask for significant...

Tobi: Raise

Akin: Raise in salaries. I'll tell you point-blank as a public servant today, my net pay will be about for hundred thousand naira a month and I'm a fairly senior, you might say, public servant. At four hundred thousand naira a month, that's effectively five million naira a year, you're not going to attract significant talent into the place unless they are people that, one: have earned income previously and have savings they can depend on or in some cases, they are people where people both partners earn, so where maybe you're lucky to have a wife who significantly outearns you and can ensure that the quality of life doesn't diminish, significantly, by joining government. Or if you think you have, maybe, bigger ambitions in public service that you're happy to take a pay cut to go and work in government. But it’s very difficult to attract people to serve government and one of the ways that national and sub-national government are now trying to, sort of, workaround that is to get development finance institutions or development partners to offset some of the salary differences. But to what extent can you do that, for how many people, how scalable is it? And then, where does the conflict of interest come in, where some people might say "why should a foreign agency pay the salaries of people working in public service?" But today, that's the only way you can do it unless the salary structure starts to change. But to even show that we need to earn more, I believe that we need to be a lot more productive, both at the national and sub-national government.

One person can actually make a significant change; but when that person does, to unwind some of the negative outcomes of those kinds of changes take forever to happen. -AO

Tobi: Yeah, I think you're talking about talent, so the two issues sort of tie together in a way. That is, talent and the knowledge problem, and incentives in the public sector. Now if you talk about safety industries, maybe NAFDAC, aviation and all that - if I understand you correctly, you advocated for some kind of precautionary principle.

Akin: Absolutely.

Tobi: But, what about the knowledge problem? Okay, let's take NAFDAC. We know that the knowledge about drug discovery relies with the private sector.

Akin: Absolutely.

Tobi: Now, if you don't have enough talent, at say, NAFDAC, how then can they make the right decisions even about regulating drugs. So how should the government try to solve that talent challenge?

Akin: I think Singapore and China are two good examples, where you have to take a 20-30-year view of building a pipeline and you have to send people to the best institutions possible, you have to give them a chance to cut their teeth in the private sector, understand how private enterprise works, what drives innovation (etc) and then bring those people back into public service. It has to be very deliberate. I used to work in banking and I used to joke with friends that every time I sat with a CBN examiner, I said to myself that I understand the financial products a lot better than you do and so how are you even going to regulate me properly? And those are the issues that you face in regulatory agencies today where the knowledge is limited not because of any malicious intent, but it's really just because the people don't know better. So I think that first, Nigeria must be very deliberate about how do we send people to acquire knowledge? How do we help them gain experience and how do we ensure that they come back and feed all of those things into public service? We used to do it in the past, we had a lot of talent development programs and I remember...in fact I remember I was reading a tweet by...I think it was Tolu Ogunlesi who was tweeting something about our first engineering PhD.

The guy who went to MIT, I forget his name now, who came back to Nigeria and the government just didn't know what to do with him and the guy ended up going to work for Shell, I think, or something. That guy in China will be sitting at a senior level, a senior decision-making level within 20 years of graduating from that PhD program. You know the thing about what the Chinese did - not only did they encourage people to go to the west to learn, when they came back they also put them in critical functions. Whether it was a research function, whether it was the PBOC (The People's Bank of China), those guys were now the guys today...some of those guys are the guys taking decisions for the country.

Singapore, for example, will say to you: you're a great talent, go and study elsewhere, go and do this, but when you come back we're going to pay you top dollar because you're the best of the best. I think that's where we have to get to - a situation where we are taking our top talent, we're exposing them to private-sector institutions both locally and internationally. But there's a clear plan about how to feed them back into the public service. I think that's the part we've missed out, where, now, the public service is seen as a place to fit our cousins who don't have jobs. Honestly, I can openly tell you this that in my state, for example, we're doing a recruitment exercise for teachers and the government has been very clear that if you don't make a certain mark you can't qualify. But people in my community have come to me to say "oh, but you should be able to help this guy now, he scored 30. Let's say the pass mark is 40, you know... it's not too far off." And I'm like, but these are the guys want to... you want these guys...

Tobi: To educate your kids.

Akin: To educate your kids. Don't you understand that if I hire a substandard teacher, your kids are going to get substandard education and you are caught in a poverty trap? So you who should have more skin in the game (you) are actually the one coming to me to say come and break the rules for us. It's not in your interest and I think we have to understand that public service is for the best people. Our best guys must go into public service. It's like the universities; back in the day, if you made a first [class] or you made a very good 2:1, you were locked in to go back into the academia. Today, we're almost saying that "oh, if you can't get into Shell, then come and teach engineering" whereas thirty years ago, Shell and the engineering faculty were competing for talent. So I think that we have to be deliberate about that. Our best people must be shown a path into public service.

Tobi: Okay. So now let's talk about you on the job. Someone like me writing about public policy can say "oh, you have to do XYZ" but I mean someone like you on the job has to deal with practical issues. So (now) which would a public servant prioritise between, say, fixing fundamental issues and binding constraints? I'll give you an example - you used to write a blog back in the day "t'oluwa ni ile", I don't know why you stopped...

Akin: That was Feyi. That was Feyi's blog I think I only guest-posted for him.

Tobi: Oh, interesting... So now, someone like me can say that "oh, for us to have some kind of change in that area you have to repeal the land use act". Whereas in Ekiti State, it could be a binding constraint that can be removed by simply suspending aspects of it to achieve what you want to do without really touching the law. So how does it work, really?

Our best people must be shown a path into public service. - AO

Akin: I think land administration, for me, is a great way to discuss this problem. I think sometimes... in fact let's not use [the] Land Use Act. Let's use taxes.

Tobi: Yeah.

Akin: We always say States can't compete because corporate taxes are the exclusive preserve of the Federal Government but I think that States can compete even on payroll taxes. So if I say today that we want to be a knowledge destination as Ekiti - as Ekiti State we should be able to say that if you come to work in the knowledge economy whether as lecturer, as a researcher, as an innovator, whatever it is; that you should only pay 2.5 percent payroll taxes, as against, maybe, 28 percent which is where your salary band sits. It automatically means that if you leave Lagos today and you move to Ekiti, you're 20 percent up and that's an incentive to drive people there. And I think that's something that States can do, and say "look, you know what? We want to own the automobile sector, if you come and set up shop here, you're going to pay 5 percent taxes regardless of your income band." And so people then say: hey guys, you know what? If we move this factory to Ekiti, you might not have ShopRite there today, you might not have iMax but you're earning 15 percent more. Yes or no?

Tobi: Yeah.

Akin: That takes you... that starts to give people a reason to move outside of Lagos or Port-Harcourt or wherever. So I think that there are things that the sub-nationals can do to compete a lot better. But to your point around what do you deal with? You deal with the fundamentals. I always say that as a government or as a public servant, you must ensure that you are there to support generational change. And, again, I always go back to places like China. If you think of a guy like Zhao who was Premier, he's been airbrushed out of Chinese history today but a lot of the reforms that he started are the reforms that China still depend on thirty years later for growth. Even though he died... you could say he died unheralded etc, the point is that if you look at China critically, anything that you say Deng Xiaoping did, they did it together, for the most part. But you must be strong in your conviction that you're doing what is right and you're doing what is right for the long term. So, but, it comes at a cost. And I'll give you a good example.

In my principal's first term in office, he instituted an assessment of teachers that was deemed unpopular and politically naive and ask I people: was it the right thing to do to ensure that you had the best quality teachers in place? It's never a bad policy. You can't say "oh, well, you guys did something unpopular, teachers won't vote for you." You've got to ask yourself: you will not be in government forever, how do you ensure that you build things that can outlive you, that can outlast you? It's very important and it's always a...it's a problem, it's a dilemma because you also can say "if you don't hold political power, then how do you influence people?" And I think for me, it's in playing on the margins and saying "look, how far can I push the envelope?" And "is this thing an extensional issue?" I consider education an existential issue. And so, I would say that "look, today, States should not be devoting less than, at least, 15 percent of the budget, minimum, to education." You know 26 percent might be impractical today because you also have issues with infrastructure, security etc. But I will say, "look, no matter what, at least 15 percent of your budget should go towards education regardless of what happens" and you must say "look, what are the fundamental problems I'm solving?" Quality of the curriculum, quality of teachers, learning environment, what can I do to improve pedagogy? (etc) Those are existential problems. Land use, for example, is that an existential problem? In my opinion, no.

I can still work around that today. There are still things that within the Governor's powers he can do to improve land rights in the state. I can digitise my land registry. I can make it easier to get a certificate of occupancy. I can make it easier to transfer title. Those are things that as a state government you can do. For us, for example, with things like our Doing Business reforms, some [one] of the things that we are going to recommend is: can there be multiple authorities to sign some of these certificates, these documents or must it be solely vested in the governor? Those are conversations that you can have at [the] sub-national level. So I won't say that - look, repealing the land use act today, is it the easiest thing to do? No. But there are other things that you can do, to your point, to work around some of the challenges that you face there. So, yes, there are some fundamental problems that you have to deal with, to answer you, and those must be existential ones because you have limited gunpowder in government. You can't waste that gunpowder on something that is not supercritical. So you've got to find, what are the one or two existential issues? On these issues, I'm ready to put my political legacy on the line. On the rest of the issues, we'll work around them (as) on a case-by-case basis.

Tobi: Okay, so let's talk about investments. Which obviously you need to make some of these things happen. And we know that even the country as a whole faces some serious balance of payment crisis. So, now, what (again) in your own experience and relying on best practices, what are the cheapest source of driving Investments really really fast? Some people talk about the diaspora, for example - I think currently the World Bank says remittances is about $22billion even though the government disputes that...

Laughs

I always say that as a government or as a public servant, you must ensure that you are there to support generational change. - AO

Tobi: But you'll also see that a lot of those remittances go to welfare for families, for individual households. So how much of an investment source can they really be? What is the template, what is the practice really, of really really driving investment?

Akin: Honestly my personal view, is that diaspora flows for our economy help to stimulate consumption. I think to your point, it's a social welfare program. People are trying to supplement low-income relatives, primarily.

Anecdotal information suggests that maybe 10-15 percent of those flows actually go into investments, most of that also into real estate...primarily, real estate investments. I think that where we sometimes need to look at better are domestic investment opportunities. And I think that subnational sometimes focus a lot more on foreign investments, sometimes to the detriment of existing capital locked in the country. There's a lot of capital locked here that I think we can unlock. I mean, one of the things that people talk about, for example, is "how do we divert pension funds into infrastructure projects?" I always say that it's a very tricky conversation to have because a lot of those pension funds are already invested in things like treasury bills...

Tobi: Yeah.

Akin: Which is even going to the government, but, for me, it's not even how do you divert Pension Funds into government-driven investments? It's how do you use government to guarantee some private investments? So, a good example for me is, instead of saying I want to raise a bond as Ekiti State Government to build a power plant, why can't I have a private power plant, go and raise that capital from the capital market knowing that Ekiti State provides a backstop guarantee of some sort that, at the very least, you're going to earn a minimum revenue...so having a minimum revenue guarantee of some sort that allows that deal to become bankable.

So let's say Tobi & Co. goes to build a road and knows that I can toll that road because the regulatory environment allows me to do that in Ekiti. And the state government then says "well, if you don't make your two million naira a day on the road, I'm happy to supplement that to ensure that that minimum revenue is achieved. Those are the ways for us to make projects more bankable. You're not really lending to the government, you're lending to private enterprises who have a backstop guarantee of some sort from the government. Sovereign risk is a big deal, so I'm keen to say let's deal with people who are already doing business in Nigeria. People who are already doing business here are important... are more important than, I'll say, getting fresh investors from outside the country. Because these are guys who already banked... they back Nigeria. They're like, okay, we're happy to do business here, we understand the country risk, we understand the business environment. It's a lot easier to get those guys through the line. It's a lot easier to say to a Promasidor, for example, come and take over our diary farm in Ikun than to say to someone who has never done business in Nigeria: come and do business in Ekiti. It's a lot easier to talk to a Dangote, a Stallion to say, come and set up rice mills in Ekiti than someone who has never done business in Nigeria. So I think you have to get a fair mix of both and also to ensure that when you bring in investors, you have the aftercare service that ensures that the guys get exactly what they want out of the state [be]cause there is herd mentality around investment. Capital flows to where returns are optimised.

Tobi: Yeah.

Akin: And the best way to demonstrate optimisation of returns is the capital that has already come in here - what has it gotten? Which is why I always say to people that regardless of whatever issues you say MTN has in Nigeria, MTN is a good example of optimising capital and it brought... if you see the people who came on the coattails of MTN, you know, Mr Price, ShopRite, all these guys, they came to Nigeria...even if it's the fear of missing out that brings you in, the people will come. It's like a restaurant, it doesn't serve the best food but if I hire 50 people to stand outside pretending they are on a queue, you're more likely to stop there to eat because you must think there's something good about this food that is driving these long queues. So restaurants have been known to artificially increase the size of the queues just to get people like you and I to come and join, and when you get in there, you find out that the food is not great you're already... you're sucked in anyway. So I think for me, first is, optimise domestic capital flows. There's a lot of capital that sits in this country today or even sits outside the country owned by Nigerians that we have to bring back. It's only when domestic flows invest in the productive sector in the country that you start to find that foreign capital will come in. We have to use the domestic capital to demonstrate the viability of investing in Nigeria. So I always say that we'll mix both. We'll go offshore looking for capital but we will also call local capital in. And part of what we have been doing in Ekiti is even meeting with people who currently do business in Nigeria to say to them "this is a great place for you to do business and this is why?"

We must ensure price stability" which then ensures that people can save a lot more of their income… - AO

Tobi: Okay. Okay. So my bit of pushback against that is that - okay, now, say you're trying to industrialize, and you favour domestic investment, what about technology and knowledge transfer?

Akin: That's a great question, honestly. You know, the truth is: it's not going to be one or the other. And I think that it's finding the balance. Because knowledge transfer is not geography-based, right? There is nothing that says that the knowledge does not exist in businesses today in the country. I mean, when I talk to some of the BPO players (the guys who run Business Processing Outsourcing businesses in Nigeria), some of the guys are doing transformative work that I won't have believed existed in this country. These are things that I think happen in Vietnam, in Bangladesh, in Mauritius, but it actually exists in Nigeria. The biggest constraints they have: quality broadband; talent. Now, those are constraints that we can take away. If as a state we say to Main One, pay a hundred and thirty-five naira per metre to lay fibre to Ekiti, it becomes a lot cheaper to get the infrastructure to a place like Ekiti. If we say we are happy to offset the cost of training people as long as you, as the BPO company, agrees that you take on these people when they complete the program satisfactorily, that's a cost that we take away for you. Everybody is happy, The State is happy, the people are unemployed; Nigeria is attracting a lot more investment in that space. I think that there are pockets of excellence where you can say (look) knowledge transfer is even easier to achieve with local capital. So there's nothing that says that (no) because the capital is local you can't import the knowledge, there's nothing that says you cannot import the technology but I'm just saying that you have to recognise that if you do not have local skin in the game...Dangote refinery is a good example, will you tell me that that project doesn't come with knowledge or technology transfer? It does. But whose capital is it?

Tobi: It's his.

Akin: It's local capital.

Tobi: Yeah.

Akin: And that's the thing for me that if your local capital is not taking risk in your country, it's very difficult to attract foreign capital. That holds true for most places. If you take a country like - again, I'm sorry I always go back to China. But if you take a place like China, you find that a lot of the capital that was unlocked was domestic capital. Look at South Africa - one of the reasons why the South African government or [the] South African economy can sustain systemic shocks is that there is already significant domestic capital mobilized. That any systemic shocks you find can be buffered by local capital and that's where, for me, if you ask me and I know we've not gotten into a macro conversation.

Tobi: Yeah.

Akin: But if you ask me, the Central Bank's single objective today, has to be price stability. Because, what you find is that people are not able to save, household savings is non-existent.

Tobi: Wiped off.

Akin: Is wiped off. Because people are spending 65-70 percent of their incomes on food. So when you spend 95 percent of your income on existential issues: food, shelter, clothing; there's nothing to save. If you cannot mobilize domestic savings, then where is the shocks [buffer] against systemic issues with foreign investment? Because whether you like it or not your ability to attract foreign investment is not dependent on you, there are external shocks that affect that, right?

Tobi: Yeah.

Akin: If The Fed raises rates by a hundred basis points it affects how much capital comes into Nigeria.

Tobi: Yeah.

Akin: So we must be saying, "look, we must ensure price stability" which then ensures that people can save a lot more of their income and then that, at least, it helps to stimulate a domestic investment environment.

Tobi: From what you're saying, it seems there is a lot of...and I've been seeing that a lot with a lot of development work...there's a lot of planning. If your economy is not developed, there's a lot of planning to actually jump-starting an economy. Now, what does that do to your free market sentiments?

Akin: You know, I'm a Deng apostle to a large extent...

Tobi: [Laughs]

Akin: I always say that the people I follow, the sentiments I espouse, I treat them like a Christmas hamper. I take the things I want out of it...

Tobi: Okay.

Akin: The ones I don't need I keep aside. So when sometimes I tell people that: look, I love Deng; they tell me: but this guy sanctioned the death of students...

Tobi: Yeah.

Akin: And I say look, Deng human rights, er...

Tobi: Record.

Akin: Record, I don't need. But his liberal views on opening the Chinese economy, I want to take that. I try to say that I'm ideologically fluid. There are parts of a capitalist market that I like, there are parts of a social welfarist market that I like. I feel that, yes, the poorest people need to be supported, [the] poor and vulnerable people need to be supported. I feel that workers need to be protected, but I also feel that capital needs to get significant returns to continue to invest. I don't hold any firm views. I think that the plans for a country will always be dependent on the time and the situation that the country finds itself. For example, I'm a card-carrying member of the All Progressives Congress (APC), people say there are no ideologies in Nigeria, I disagree. APC is a left of centre party...

Tobi: Really?

Akin: Yes. It's a social welfarist party and that's why if you think about things like the social investment program, this is the only time you have seen in Nigeria where there's been a very ambitious, you might say, overambitious social investment program targeted at various groups of people including people who are vulnerable and that's a sign of an ideology. It's the one part of the APC manifesto I can say, 100 percent, has been implemented. But you know why it's important to do that today is that there's an existential problem in the country. If people cannot eat, you can't educate them. So when we say there is a homegrown school feeding program, it's not a waste of money. Nutrition is a big part of education; because if the kids do not eat properly, there's nothing...they can't learn nothing. Even getting kids to school...even if you say they're sending their children to school to only go and eat, at least the kids are going to school. So having something like a homegrown school feeding program, for example, is, for me, something that I will... forget the economic impact of supporting farmers and cooks and etcetera, that's even like a spin-off. The real impact is getting kids to school. And so for me, the next level of this conversation is how do we now measure the impact? How do we measure enrollments rate? In my state, for example, I think we can show you some numbers of how enrollment has gone up in schools since that program started, of how many children are benefitting from those kinds of meals. Now, that, for me, is a social welfare program that is very important.

But on the second part of it - I will also say - you have to free up things like capital controls. You have to allow people bring in and export their capital as they wish... even with this capital restrictions, people will still bring money into Nigeria. So, for me, you have to take what works from different ideologies. Sometimes you're going to take some socialist principles, sometimes you're going to take some capitalist principles, and we have seen markets straddle the contradictions quite well. They will say oh, it's market socialism. People have started to mix... the closer you are to the centre now the more populist you tend to be. So I don't think that the world, especially the developing markets, will benefit from very rigid ideologies. I think that we've gone beyond that. The iron curtain is fallen now since when? Glasnost and Perestroika are long gone. So even the people who were ideologically pure have moved towards the centre...bar maybe a place like Cuba, I don't think that you will see people hold very rigid views on ideology anymore. Even the United States has some socialist protectionist ideologies. Donald Trump is a... you could argue is a republican president, right?

Tobi: Yeah.

Akin: But he is probably the biggest critic of globalisation today. So you find that the UK is going through a painful Brexit process. That's an anti-globalisation...

Tobi: Move.

Akin: Move, right? Again, pushed by whom? By a conservative party. I have friends who are die-hard conservatives. They don't speak about Brexit. They stay silent on it. But I remind them from time to time that: your party which is a conservative party is the one that took the Union to a referendum. Let's not forget that. That's not something... it's almost ...you should expect the reverse.

Tobi: Not Corbyn. Not Labour.

Akin: You should expect Labour to actually be the ones pushing this kind of agenda, so it tells you that there are no rigid views, there are no hard-coded views anymore in the world.

Tobi: Let me ask you a bit of a comical question on that note.

Akin: Uh uh.

Tobi: Where does the border closure fit in the APC ideology?

Akin: You know the thing about this podcast is that they ask career-limiting questions...

Laughs

Akin: But I'm happy to answer that. Honestly, there are some things that are existential and on the border closure people have asked me on social media for my views and I've said: "look, we have to be a bit more nuanced about this conversation." I don't think that we've optimised the decision process properly. I think the biggest thing that we could have done differently is to allow the people best suited to lead the conversation lead the conversation. Personal opinion: I don't think that customs should be leading a conversation about trade. There's a reason why we have a trade office, there's a reason why we have a Ministry of Trade and Investment. That ministry should be front and centre of the conversation and should draw in the different parties on a need-to-know or a need-to-be-there basis. So I think in terms of coordination, we have led the conversation from a customs perspective which is not where we should lead the conversation from, and that for me is the biggest issue. But should our neighbours play by the rules? Yes, they should. Is trans-shipment a major issue? Yes, it is. Is the Beninois economy designed to exploit Nigeria? Yes, it is. That is the reality.

Tobi: How is that? Please explain.

Akin: If you sit down and you create an economy and I'll send you some work that shows that for the last 30, 40 years, these guys have built an industry basically to rebag and repackage products against the ECOWAS protocols into Nigeria. It's a small economy, we laugh about it and say it's Nigeria's 37th state but if you think about [it]...this is not the first time we're closing borders [and] the thing is that we've repeated this thing so many times and I'm worried that we're still not learning that these are symptomatic issues and we are not dealing with the root cause. For me, it is how do we introduce technology into surveillance, into border surveillance. These have security implications. Forget rice. Drugs come in through these borders, guns come in through these borders. There are far more serious existential issues that we need to solve for. How do we do the surveillance? How do we ensure that the cultural trade flows are not shut? Remember there are families on both sides of the divide - there are Yorubas across both sides of the border - how do we ensure that these traditional trade corridors are not shut but (we) also ensured that the territorial integrity of the country is protected? So I don't think that it's a one-size-fits-all discussion. I think that it's a more nuanced conversation. Is the border closure the right thing to do? I don't know. I think history will judge but I definitely think that the Beninois government needed this kick up the backside. Now, should it start from customs? No. I think we should sit down and say what is our broader trade position and what position do we want these guys to take on board? I think we should be able to say, "look, how do we collaborate with you?" Can we, for example, because of the efficiency issues with our ports, can we have a situation where goods come in through the Beninois ports, they are processed through there and they earn a fee for that? And then those goods come into Nigeria. That is a way to think about it. Even from a Nigeria perspective, sometimes we slap levies on products that are against some of these our protocols. We have a common external tariff, we sometimes go against that and we say, oh, 70 percent duty. Meanwhile, the rest of the sub-region is charging 20 percent. But can we say to these guys "guys, you know what, out of this 20 percent you guys take 10, we take 10." Ten is better than zero.

I think that what we have to be able to do is to decentralize port infrastructure to ensure that goods can move out of Nigeria fairly, fairly, easily. - AO

Tobi: Yeah.

Akin: Let's start to have those conversations. That is the conversation that we need to have and I think that's the conversation we are not having. It can't be a stick all the time, it has to be [a] carrot-and-stick approach. We've got to say, oh, come, how can we optimise this process? These things are coming into Nigeria anyway. How do we move exports? How do we ensure that you can process some of our exports? And that's a conversation that we should have as a sub-region. How do we ensure that Nigeria's customs officials, if this is what your port is built for, we might as well embed our people there and ensure that we are seeing what is coming in? Those are the conversations I think we should have. How does Nigeria expand and before you know it...because we are the biggest economy in the subregion, we have to own that leadership; and for me, that's a bigger issue. That how do we sit with our partners and say, "okay, use your port as entry point into Nigeria as well but the trade-off is that our people will be part and parcel of your process to see what is coming in." I think those are the conversations that we need to have if we're not having. But did something need to be done? Absolutely. And I don't think this is an APC or PDP issue, this is an existential issue for Nigeria. So it's not a partisan ideological issue. This something that we need to resolve. Yes, I know that there are people who have very strong views: you should not shut your borders etc. You should not do this, free trade blah blah blah... but there is no real free trade anywhere. When you think about it critically...

Tobi: It's freer trade.

Akin: It's freer trade. What is free trade? There are restrictions to trade and it's a per country restriction.

Tobi: It's just degrees.

Akin: It's just degrees and it's about where you are as a country in your development [and] what is important to you. If the United States says today "well, we don't want to allow wheat into our country." They won't. Mr Trump, for example, is very keen to say "Mr Cook, you have to manufacture more of your products inputs in the United States." Is that free trade? So you've got to ask yourself, what is free trade? Free trade is a misnomer. Yes, you want freer trade, you want to liberalize as much as possible but you want to liberalize within certain conditions and ultimately the job of the government is to optimise value for Nigeria. How that optimisation of value happens is then dependent on where we are as a country at that point in time. So, yeah, there are other things that we have to do with the borders and there are conversations we need to have with our neighbours and I know that some of those conversations are happening. But is there a straight forward answer to that? I don't think it's a yes or no [answer]. It's not a binary conversation at all.

Tobi: Okay. So now, here's my argument and a bit of a counter to your position. Yes, I take your point on territorial integrity and the need to actually have a safe and secure border. Absolutely important. But don't you think we are treating the trade issue a bit too much as a zero-sum? Yes, I get why trans-shipment is a problem but if you consider the size of Nigeria's economy and what I think our ambition should be, If we actually focus a lot of our development strategy and policies in areas like building export disciplines in high-tech manufacturing goods, I don't think it would really matter if rice is coming from the Beninois border, really.

Akin: Here we go again.

Tobi: Like someone, actually a guest of mine, said that rice in this dispute has become a bit of a political crop and...

Akin: Was that Mr Fawehinmi?

Tobi: No.

Laughs

Tobi: No...and tomorrow it's going to be tomatoes or fertilizers or whatever. But is that really... aren't we really obsessing over table stakes so to speak?

Akin: Great question and I think, honestly...first, it's not a zero-sum conversation. I always say you can walk and chew gum at the same time. I don't think that the border issue precludes us from focusing on export discipline and I think, in fact, export discipline is something that as a country we haven't paid any attention to. I spoke with someone who is very knowledgeable about exporting, so this is reported speech, and he said to me that for him today, as a CEO of a large company, he has to go through 14 steps to export his products out of Nigeria and that even prevents his company from using Nigeria as a hub for sub-regional production. And I think, for me, there are two issues: there's the single-window conversation which I hope our government - and when I say our government, our APC government - is able to resolve before 2023. I think it will be the single most important policy issue as regards exports discipline that we can resolve; just ensuring that (everybody) you can do everything in one place, and you don't have to go through the multiplicity of agency interaction. I think that is a critical part of the next wave of our Doing Business reforms, and I know that there are many stakeholders in that space that need to be managed, but I think that navigating that is a critical thing for the government. I think that obviously the port efficiency is a problem and as an individual, I'm very pleased to hear and welcome the development of new ports. I think the Badagry deep-sea port is super important. I think having something up in the South-South, potentially around Akwa-Ibom, is very important. Because, if you think about places like Calabar, people say why is that port not efficient? I don't know the economic decision of citing a port in Calabar. I don't know the draft [or] if the draft was taken into consideration. Many of the locations we're talking about are shallow draft locations that will take significant amount of money to dredge; and therefore, it weakens the business case for these ports. So when people then say "oh, why Lagos?" The most obvious reason for Lagos is the draft. So, I think that what we have to be able to do is to decentralize port infrastructure to ensure that goods can move out of Nigeria fairly, fairly, easily. But I hear you about export discipline and I hear you about focusing on special economic zones and that's why I was very happy to see the Special Economic Zone company setup. Even though that has run into some legislative challenges at the moment, we are hopeful that they will be resolved very early this year. In our state, for example...In Ekiti, we are keen to set up a Special Economic Zone: one, for the knowledge economy, and that is to export services. So things like Business Process Outsourcing which is effectively an export...

Tobi: Yeah.

Akin: If you think about it. Because we feel like service export helps us to leapfrog some of the infrastructure challenges that you face with industry and manufacturing. Challenges around power. Challenges around transport. Challenges around port limitation. So, we think that focusing on services helps us to navigate around those constraints; and there is no reason why we can't be a BPO hub in the country. If we get broadband and dedicated power rights, I hear from the people who should know that Nigerians speak particularly toneless English, therefore we need less accent training than, say, the southeast Asian market which is the hub of that space now. So we have a very critical upside. The other thing is that at our time zones… we are very well set for, sort of, like, the Central European market etc, and labour is cheap here, you know... cheaper, I'd say, here. We have some of the building blocks in place to be a service export destination.

The other thing I'd say with the SEZ is that, we also feel that from an Agric prospective, we definitely should be thinking about exporting a lot more of our produce. And to your point, I don't see any reason why things like rice or tomato should be [a] political issue. I think for me, [it is] absolutely correct that we should be building expert discipline around agriculture and there's no reason why we should not focus on certain crops. Whether it's maize, weather it's cassava, especially with a lot of the gluten-free direction that nutrition is going towards, you know... cassava as the base of a gluten-free export market is certainly very sellable. So I hundred percent agree that expert discipline should be where we're focused, and I think that we can do both. So I don't think that this precludes that conversation from happening.

Final point, I think, is, we need to think about sort of charter cities and SEZs and the legislation around that a lot better. The process where people just go and register in a free trade zone just because of tax incentives is, for me, a waste of time. Because you now have a situation where two companies are competing, one of them is paying taxes, the other one is not because they're in a free trade zone. Actually we should be giving the people that incentive if they're exporting. There are some misnomers, there are some things that need to be adjusted. If a place is a special economic zone, it should be because it's geared towards making Nigerian products more competitive internationally and if we are not able to deliver that then should you actually get the benefits, the fiscal benefits? I don't think so. Now, this is my personal opinion and these are some of the issues that I think that we need to debate a lot more vigorously. I think, just generally speaking, across all the things we've discussed, one of the things I worry about is that I think we are not having the right intellectual discussions about policy. We're there discussing which governor believes in stomach infrastructure, which party does A, which party does B, somebody brought Facebook to Nigeria...

Tobi: [Laughs]

Akin: This other person does not believe in free press...I think that we are losing the opportunity to have a lot of intellectual debates. You know, one of the things I love about China in the 70s and 80s [is], those guys fought themselves on the pages of newspapers with intellectual arguments and when they went to battle, it was a battle of ideas. It wasn't a personal discussion. It wasn't that I dislike you. It wasn't that you are a member of [another party], they were all one party. They were all CCP but the intellectual arguments were fought vigorously, bitterly at some point...

Tobi: So, why do you think we're having problems having [intellectual debates]? Is it that our national IQ is low because China and the whole of Asia have that going for them?

Akin: I don't think... I think that these guys have also developed a nation of...over a much longer period.

Tobi: True.

We need Nigerian intellectuals to step up their game. - AO

Akin: We're talking about a civilization that goes across, you know...

Tobi: About five thousand years.

Akin: Five...thousands of years. In that period they've never had a period of where intellectual debates have been frozen. We have had periods where we've just had a freeze. We are twenty years into democracy, I don't think between 1979 and 1999 there was a space for any intellectual discussion, everything was done by decree and by fiat. So I think we're going to have to build that over time. I also think that our universities are not doing enough. I mean, I expect today professors of economics should be writing about the implication of land border controls, we should have papers coming out, we should have people discussing these matters. Why do we have professors of economics in Nigeria who cannot debate existential issues that face the country, who cannot say this is our view? How many economic positions do you read outside the Monetary Policy Committee of the Central Bank? Who else shares public views? You are dependent on MPC members personal statement as the basis, and in a lot of these conversations, there's a lot of groupthink.

Tobi: Yeah.

Akin: Because they've already made the decision and they're just now writing [the] statement to support those decisions. But I expect on the back page of our newspapers... I mean, whether or not you agree with Henry Boyo of blessed memory...

Tobi: Yeah.

Akin: He certainly brought a view, you might not agree with the view, but he brought a view that he actively debated. I look at our institutions and I say, where are the discussions happening? Where is the think-tank driving this conversation? If I look at the EAC [Economic Advisory Council] for example, one of the things I say to people is that I certainly am rooting for the EAC, it's chaired by my former boss, but I also feel like we've lost the benefit of having people like Doyin Salami and Charles Soludo and the rest of the members from sharing their personal views in [the] public domain. Because now, you know, they are a member of an advisory...

Tobi: Council

Akin: Council, they can't really speak publicly because it might be taken as the view of the EAC etc. But we need Nigerian intellectuals to step up their game. That, for me, is where we are missing it because... I remember there was a period where... I think it was six of us... I can't remember how many of us... did a week's...um, different pieces every day on foreign exchange liberalisation and I was amazed at the debate that it stimulated and all of us were not... I won't say that we are academics. Maybe out of five of us, Nonso Obikili was the only one that has a PhD, but it was important to have people, at least, put those ideas in the open and let's debate them. And that's one of the reasons I like that people like Feyi constantly, um...

Tobi: Engages.

Akin: Engage in these debates, because let's have an ideas based conversation. I think Pius Adesanmi of blessed memory said this, and said that: the reason I write is not because I want to change or I think I can change the views or the behaviour of these hard-headed government officials, but it is so that two thousand years from now someone is not going to come and say these people lived like animals and they didn't think...that in the midst of all of this madness, let them even see records that some of us were Thinkers, some of us were speaking. And I found it quite... it was quite sad for me that that was his last public post or article because it was almost like a man that had a premonition that "I might not be here for much longer but I need to let my ideas outlive me" and I think that's what we should be doing. We're talking about China now, we can read the arguments of 1978, 1984 and we can see how those arguments mirror Nigeria of 2019. If those things were not there, we won't even be able to apply them to our current realities, but who is writing the stories of Nigeria today? So I think that's one thing I will say that the intellectual debate is not public and I don't even know that it's happening. I don't know that the universities are writing, and that's one thing that we should be focused on, not ASUU going on strike. The real issue is what are you contributing to town? How are town and gown meeting? How are those two sectors interacting and integrating? It goes even beyond writing... how are we preparing people for the workforce? I was very happy to see the UI Vice Chancellor engaging, saying this is what we are doing as a university and I think that's the kind of engagement that we want to see. We want people to come and... to share their opinions. You studied economic theory for thirty years, how does our current reality fit into this study? And I think that that's how you improve the quality of public discourse.

Tobi: So, now, in terms of public discourse, do you think that there is too much ideology in that space?

Akin: Too little.

Tobi: Really?

Akin: I think there's too little.

Tobi: Okay, so, I was pointing this out to someone. You mentioned the EAC, right?

Akin: Uh-hmm.

Tobi: I think except for Doyin Salami, really - I think every other person on that advisory council has some sort of protectionist sentiments.

Akin: I disagree.

Tobi: Really.

Akin: I disagree.

Tobi: Okay.

Akin: Some are. Some have.

Tobi: I know Soludo does. I know Bismark does.

Akin: I don't think... I think to be honest, everybody has some protectionist ideology, everybody does. I won't say Soludo does that much.

Tobi: He was opposed to the EPA, for example.

Akin: But, for some good reasons. The thing is that this thing is not a wholesale opposition. There are parts of this agreement that, to be honest, do not strategically support Nigeria's economic development. You have to recognise that when people come to this table, they come to the table holding nationalistic views disguised as globalised views. At the end of the day, everybody wants what's best for them, and I think that, again, until recently and until Ambassador Sakoye of blessed memory, we didn't have an office that was coordinating our treaties, our agreements, people were signing all sorts of things without even knowing the implication of what they were signing. So I don't think that the opposition was wholesale. There are some people there whose views I can't say I know for sure. There's Iyabo Masha, for example - she used to be at [the] World Bank if I'm not mistaken. I don't think that if you spend so much time at the World Bank you would hold fairly strong protectionist views unless you were able to mask it sufficiently but there are some people that obviously, I mean, Ode Ojowu, for example, is very clear about where he stands on some of these things. But I think the mix is good and the debate...look, it's useful to have people from both sides of the divide.

Tobi: True.

Akin: We will improve the quality of the discuss by having the divergent views and having diversity of opinions.

Tobi: So, let's talk about the influence of ideology in Nigerian politics. Is it too much or too little? And what would work in terms of generating ideas?

Akin: Look, at the end of the day, I think we are still fairly underdeveloped in terms of our politics because voter engagement is still at...I'd say, at the kindergarten phase of voter enlightenment and voter engagement. I think that people are still too poor to engage in high-level discourse, and, so, for people, it's still a function of "I want to survive" which is why you find that people are willing to trade the long-term benefits for the immediacy of "pay me 2,000 [naira] and I'll vote for you." And I tell people that, look, this is similar to Lincoln back in the day. I don't know if you remember, Lincoln's slogan was: vote yourself a farm. (And) I joke about it and I say [in] Nigeria the [slogan] is to "vote yourself a pot of stew".

Laughs

Akin: But if you think about it at that time, people were only interested in "give me land" in the US. So when you're faced with existential issues, people can't think about ideology. It's too abstract...they're looking for mundane...they're more mundane in their expectations, you know. But I think that when you start to improve the quality of life, people then can start thinking...it's almost like Maslow's hierarchy of needs...

Tobi: Yeah.

Akin: They start to think about "oh, what's more important? Who's thinking about education? Who's improving healthcare?" I say to people that, look, you should be able to say, as a woman, my biggest issue today is maybe "gender mainstreaming", maybe "maternal mortality" and say "look, I'm going to only support a government that emphasizes these two things". If you do not agree to these three issues, then we will not vote for you. The unions are very good at it and this is why [what] I always say about the stubborn minority - the unions, the market women; whatever you say, they get whatever they want. You might disagree with what they want but they get it. The trade unions get it because they will just down tools and they force you to a table. Now, how do we as a broader population start to force people to that table? And this is why I think that the advent of social media is a good thing because more and more...

I mean, I was happy to see people engage in a discourse around foreign exchange and exchange rates. Everybody suddenly became an Economist and had a view of where the Naira should be trading. You know, it's a good conversation to have. People are now saying should we close our borders? Whether those views are knowledgeable or not? I want those views on the table. Those are views to have. They are important views so I don't... I think that we are still at a growing phase and I think it will only continue to improve but we're definitely going along that continuum. It didn't happen overnight anywhere in the world, the quality of the politics, the quality of the discussions did not improve overnight, it took time and we have to bank some of those marginal gains. Let me ask you a...okay, well, you are the one asking the questions so I won't ask you a question...

Tobi: Shoot.

Akin: But think about '99 and 2019...

Tobi: Yeah.

Akin: And where Nigeria is in its politics, we've advanced... in the quality of the discussions we're having. Politics in 1999, nobody even knew who those guys were. They had no antecedents. I mean, I voted AD in '99 not because of anything but just decide, oh, this is the party of our people. This is Awolowo's party. All you needed to win an election in Yorubaland in '99 was to do the peace sign and wear the Awolowo cap. Some people like Asiwaju did not even need the cap, he just needed the peace sign.

Tobi: [Laughs]

Akin: Once you were endorsed by Afenifere, you were locked in to win an election. Now, nobody really bothers about that. Whether they support or they oppose you, people a lot more independent in their views. Back then if you were Ohaneze Ndigbo you win in the South-East, I don't think that that holds very much now. Otherwise, APGA would be the dominant party in the South-East.

Tobi: But to pick up on that point, wouldn't you say that was better in some sense? Okay, if I'm voting in the South-West, for example, and whether true or false if someone is running on an Awolowo platform, I know the antecedents of that...

Akin: But the truth...

Tobi: I know the history of that...

Akin: But the truth of that is that people only use that... some people use that as a vehicle to get power. It's not because they believed in the philosophy of man or the philosophy of the UPN or the Action Group. Tell them to tell you any part of the AG manifesto that they know. They don't but they've realised that people took things at face value and if you wore a cap and did a peace sign you win an election.

Tobi: But is that any less preferable than 2000 naira at the polling unit that we have now?

Akin: I'll tell you one thing...I'm a big fan of marginal gains as you might have suspected, there were times... look, till today, the election that was superintended by Maurice Iwu, show me anywhere where you can find the breakdown of results whether real or imagined per polling unit for the presidential election. The's a summary, take-it-or-leave-it there's no breakdown of the election anywhere.

Tobi: How did he get away with that by the way?

Akin: The point is Obasanjo made him get away with it. Let's be clear... so let me tell you one thing: I'm not saying elections are perfect, the fact that people are paying for you to vote for them means that they believe your vote counts...(because if you don't pay) Let's be honest about this, right?

If I'm paying you 2000 naira for you to vote for me what does that tell you? It tells you that they need you to act to vote to win the election. They actually need that act from you. In 2007, in 2011... by 2011 things has started changing but as of 2007, you did not need that physical act of voting to happen. What I'm saying is that things have shifted... you might... people can disagree and it's an opinion, but I'm saying things have shifted, they might not be perfect or close to perfect but things have shifted and our goal is to ensure that things continue to shift. Maybe in 2023, we will create a situation where you can't even tell how I have voted to remove the incentive of paying me to vote. INEC did some things like, say, we don't want to see mobile phones, etcetera. We're going to keep improving the process. I think that we have moved. People are now saying, oh, we want to... some people will say oh, PDP wanted to infiltrate and hack our servers. Somebody will say the results on the server was different from the one you published. We are now having a conversation where we've moved the realm of the debate to cybersecurity...

Tobi: Cyberspace.

Akin: And cyber attacks. Ten years ago the conversation was they snatched 20 ballot boxes.

Tobi: [Laughs] But they're still snatching ballot boxes.

Akin: But it's reduced.

Tobi: Yeah... yeah.

Akin: Let me tell you, if you think about it, twenty years ago people were saying, look, we did not even vote here.

Tobi: True.

Akin: We are reducing those issues. Social media is helping us democratize those issues. If you look at the 2019 elections, whether real or manufactured people were reporting issues in their polling units on the go. You could tell even just looking at some of the results per PU who was going to win an election where. Ekiti elections for example - I was away, I was not even in the country on the day of the election and when I saw the results from my polling unit, I knew immediately that Dr Fayemi had won that election, because we were on course to win Ikole local government, which is my local government, which is a place that, historically, we've always struggled with as a party. So you can tell that look, elections are starting to count, matter a lot more. It's not perfect, it's not anywhere close to perfect but let's not say that there have not been any gains and I have my views on one of the biggest reasons why we've seen those gains. It's the absence of General Obasanjo...President Obasanjo (apologies) from mainstream politics in Nigeria.

Tobi: Why? Explain that.

Akin: Because I think that the winner-takes-all mentality that he personally projected transcended beyond him and then influenced, broadly speaking, political parties on the country. I think that President Yar'Adua, Jonathan and Buhari have been less involved in ensuring that their parties remain dominant across the country. President Yar'Adua, for example, he had an "I came in through a tainted process...

Sometimes keeping the people you meet in government is as important or more important than appointing new people. - AO

Tobi: Yeah.

Akin: And, I am embarrassed by it and the way I will resolve it is by taking my hands off and saying let the will of the people be done. President Buhari, for example, has shown a willingness to work across parties with the governors. If you talk to the governors in Nigeria today, all of them are united in the fact that regardless of our political parties this President is happy to work with us. There was a time in this country where ecological fund and all these special projects were only reserved for governors of the party in power. Where if you had a loan request and you are an opposition party and you wanted to borrow from the World Bank, the government will not approve it. Those times existed in the country. Today, in fact, some of the opposition governors are being accused of underhand support for the President. Because think about a lot of the things happening across states, many of the projects are happening in states that are not APC states.

Tobi: And you think that is really a byproduct of President Buhari's leadership?

Akin: I think it is. Look, the Nigerian presidency...

Tobi: Ain't you partisan here, Akin?

Akin: I'm always partisan.

Tobi: Okay.

Akin: Let's put that caveat there. I'm an APC member.

Tobi: Okay.

Akin: Meanwhile if you choose take it with a pinch of salt, that's your business.

Tobi: Okay.

Akin: My own is to share my views, right? I'm not asking anybody to accept the views. But here is what I'm saying, under the President, you cannot really say that the governors, as opposition governors are suffering. Under President Obasanjo, people were saying we want to...I don't want to use those words but they were almost military dictatorial words of "we want to capture the South-West".

Tobi: Yeah, there was that sentiment.

Akin: APC has not said, "oh, we have to capture the South-East." We went from having one South-East governor to having none. We lost Imo State. It doesn't mean...

Tobi: But when you have the President say things like "parts of the country that gave me 95 percent...

Akin: 97.

Tobi: Cannot expect the same thing as the people that gave me 5 percent." How do you... where do you put that? Where does that fit?

Akin: I think one of the things as well is I think that our political leaders need a lot more media training. Because, honestly, I feel that sometimes these conversations are...you see, politics comes... there is some reward that comes with political support. Now, if you're going to, for example, appoint people into roles, those roles are going to... those appointments are almost like reward for support, some of those appointments. So you're going to find that they are going to be skewed in some degree to places where you feel that you got more support because there's a sense of giving back, but it doesn't mean that projects will now be dependent on that. I tell people that for what it's worth, things like the cleanup for example... the Ogoni cleanup, for me, is a fundamental environmental project. We had a South-South President that did not start that work, let's be honest with ourselves.

Tobi: Yeah.

Akin: Today that project is going on. I follow the updates on social media and I'm happy to see that that project is moving. For me, that's a fundamental project that is that this country needs because the South-South needs an environmental cleanup to even give it a chance of whether its aquaculture, crop production...there's an agrarian community there that has suffered because of the degradation of the environment. For me, if that's the one thing you bequeath that zone, it's a fundamental thing to do. The whole work being done with probing NDDC, it's not for the North. NDDC is a Niger Delta Corporation but those people have taken money and they've not delivered any project. When people say oh, there's a tribal ethnic sentiment...in Nigeria, the Elite has always been united about money. Let's not deceive ourselves. Why haven't the governors of that region, if they are so insistent on... it's when you're in opposition that you can say "oh, we're being marginalised." What happens to when you are in government? What happens? I tell people I don't care, honestly, where someone comes from. So when people say "oh, this guy is Northern"... I don't care. I really do not care. Can you do the work? Are you qualified? That for me is a bigger thing. Femi Gbajabiamila is the speaker of the House of Representatives, so, how is he going to improve the life of someone in Surulere? The life of the man in Surulere is not dependent on that. That for me is a fundamental issue. I don't care where the person is from. The point is is the person qualified because I definitely am a big... look, I understand what federal character has done and the importance of federal character in terms of just the cohesiveness of the country and at the time the country was a lot more fractured, so I recognise that it's one of the things that I'll say has actually helped Nigeria remain seemingly united. But do I care where the president of the country comes from? I don't. I don't. I honestly do not care. The important thing for me is that the does it increase my chances of being successful? Does it increase the chances of my children being successful? A rising tide lifts all boats, are we as a country improving regardless of where the president is from? So I always take these conversations as a distraction... zoning, no zoning, we want a South-West president, we want a South-East president, I don't care where the president of the country comes from. Does anyone care where Donald Trump was born? Does anyone care where Boris Johnson was born? It doesn't really matter to me. The reason we having this... we are majoring in the minors is because we're still an impoverished society.

Tobi: And probably diverse.

Akin: Diversity... look, let me tell you what... when they are Nigerian elites sit, do they care where they're from?

Tobi: No.

Akin: Nobody cares.

Tobi: But that division could be a useful political tool because diversity is our, I don't know, maybe,  geographic reality.

Akin: You see, my brother, let me tell you one thing. I feel that... everybody realises that Nigeria is stronger together. We deceive ourselves... we can say, oh, we want to secede, we want to do this, we want to do that... I almost feel that all that is gamesmanship. The reality is that we are stronger together. Our collective ability to influence the region is based on the size...

Tobi: Of the country.

Akin: Of the country and the ability to manage the federation. There is no part of the country, even the oil-rich part of the country cannot survive in isolation. We have seen it in South Sudan and Sudan and that diversity happens everywhere. In Ekiti State, somebody will tell you that an Ishan man who is governor today cannot be succeeded by an Oye man because they are from the same Ekiti North Senatorial Zone. This is Ekiti, one of the more homogeneous states in the country if not the most homogeneous state in the country...

Tobi: [Laughs]

Akin: Where every part of the place is an Ekiti. There is nothing that separates the guy from Ishan and the guy from Ikole until there's election, then they will tell you that "no now, the senator has come from Ifaki three times and now he has to come from Ikole or Oye" that's when a man from Ikere will say "Ikere has never produced a governor, it's our turn". So when we talk about these things, uh... these things are just tools to manage political interests. I think that we should be more concerned about the quality of people in office not necessarily where they're from and I think that these things...

Some people say the president has appointed this person, he can't replace a Southerner with the Northerner. I'm like "look, guy, these are irrelevant issues." I'll rather have a conversation of - is this guy qualified? If he's not, that's a different issue. But if he is qualified who cares where he's from? Do you care where your account officer is from? When a surgeon is going to operate on you, are you going to say "oh, I'll only allow Yoruba surgeons operate on me?" No, let's be honest. If the guy is the best brain surgeon in the country and somebody has a surgery tomorrow, are you going to say "oh, another Kanuri surgeon, the last time my dentist was from Borno, why is the gastro-surgeon from Borno State too, is it only Borno people that can be surgeons?" Do you care? You don't care. You don't make those decisions because when you have skin in the game, real skin in the game you don't care where the person is from. So these conversations for me, they are distractions. I generally feel that we should just be focused a lot more on competence and we lose that narrative.

Tobi: Now, let's return to President Obasanjo.

Akin: Yes, one of my favourite topics.

Tobi: Yeah. Some will say that he is our best president. On the back of the economic reforms of the 2003 to 2007 era and part of his legacy was that he actually appointed some competent hands, a lot of people that will still throw their names around today came up during that era. Isn't that something at least praiseworthy in your view? That's one. Secondly, now, and quite critically, Obasanjo supported your party in 2015...

Akin: We didn't request for it.

Tobi: Shouldn't that count for something?

Akin: The second question is easy to answer.

Tobi: I mean, for someone that is notorious for being rigid to abandon PDP...

Akin: I can answer the second question a lot (more) easier than the first.

Tobi: Please do.

Akin: President Obasanjo, in my opinion, is self-obsessed. In 2015, he supported the APC not because of any love for the APC or the key actors in the party, but because he wanted to punish his own party for what he saw as an affront and a lack of respect for him. He was very critical of the incumbent President Jonathan because he felt he was frozen out of government and even in his home state he was frozen out of choosing candidates in that place. So it was more an act of self-inflicted opposition. And to be honest, I don't think his support amounted to much, which is why in 2019, despite the volume of letters that he wrote, the APC still won the elections fairly easily. So I think that has, sort of, put to bed the myth that you need President Obasanjo to support you to win an election in Nigeria. To be honest, I don't think that his political might counts for much anymore, this is just a man who is constantly seeking relevance, so I don't really rate his political relevance in the country. Honestly, that's me. I might be wrong but that's me.

On the first point, I think that look, I'll be very honest...he's a very...his second term in office was very good for the country, it could have been a lot better but having said that it was still... there were a lot of good things to talk about. I think that the jury is out on being the best president ever. You also must realise that he is the only president who served two full terms and I don't think his first term was steller... right?

Tobi: No.

Akin: His first term was, in my opinion, below par.

Tobi: Yeah.

Akin: So I think that, for example, President Yar'Adua was in office for too short a period. President Jonathan had one term, you could say full term. President Buhari is going to be the best comparison...right?

Tobi: Yeah.

Akin: By 2023 and I think that we should wait till 2023 before passing our judgement. There are some things that the APC government if we deliver, will be transformative to this country. The conversations with Siemens and the work being done to improve the generation, transmission, and parts of the distribution infrastructure in Nigeria, if done by 2023, will be transformative and it will show significant gains, the kind of gains we haven't seen in this country in the last 20 years. I mean, if we are able to fix large parts of the transport infrastructure, the Lagos to Ibadan line is already done. Fully operational now, probably in March, and if we then extend that from Ibadan to Kano, I don't need to tell you what the impact of that on the country will be. I mean, if people say "oh, why are you patting yourself on the back for fixing Lagos-Ibadan expressway" and I ask them "so why wasn't it done for the last 30 years?" So sometimes you say these are mundane things but you also have to ask yourself why haven't these things being done? If we get some of the roads working - Lagos-Ibadan, Benin-Ore, Second Niger Bridge - these are transformative projects for [the country]. I travel through Lagos to Ado, if that Lagos-Ibadan road is completed, Lagos to Ibadan is suddenly a 45 minutes trip. It means that I have a good chance of getting to Ado-Ekiti in 3 hours. Now, imagine what that does for investors. Imagine what that does for the transport of goods and services. It's transformative stuff for the economy if you can improve power supply from what is today between 2500 to 3500 megawatts to even 5000 megawatts, we're talking almost from 3,5 to 5k, is almost a 50% increase. It's transformative for the economy. If we can fix some of the long-standing issues with our ports, these are transformative things for the economy. So I think that there's a sense the jury is still out on President Buhari's government and I'll say that when we give those two people 8 years each, we can then start to say where do we think we've seen more transformation. But even in terms of the quality of people, I would agree that, yes, these were fresh faces in government at the time, but at the end of the day that government also had T.Y. Danjuma in it, if you remember in his first term. He had Cornelius Adebayo, had a lot of old people in it - Barnabas Gemade, they were old people who...Tony Anenih. So we mustn't make it look like Obasanjo was this guy who was like the patron saint of youth and young people in government. Today, for an Oby Ezekwezili or a Nasir el-Rufai, there's a Yewande Sadiku at NIPC. I'm biased to someone like Yewande Sadiku because she was my colleague but this is as good as you get running the NIPC. Jumoke Oduwole, the work she's doing as a special adviser to the president on Doing Business, fantastic work. My current boss, Dr Fayemi was Minister of Mines, I don't think...yes, I'm biased, but I think that he's one of the finer thinkers you'll find in government and there are many of those people.

I think that the CBN is taking over the job of people like the BOI, BOA etcetera and I think that even the multiplicity of development finance interventions affects the impact of those interventions. - AO

For what you say about Babatunde Fashola, I think that he has more pluses than minuses. A lot more pluses than minuses and those are the kind of people that I want to see in government. You won't ever get a government filled with those kinds of people because there's a balance that you need to find but I definitely think that there's enough talent in this government both at ministerial and parastatal level. Uche Orji at NSIA is doing fantastic work in that place. I don't think you'll find better public servants, and sometimes even keeping the people you meet in government is as important or more important than appointing new people. Having Yemi Kale serve two terms at the NBS has done significantly great work for the bureau that I think keeping Dr Kale there is, for me, a much bigger thing than appointing a superstar somewhere else. I watch football a lot and Jose Mourinho will say to you [that] sometimes, keeping your players is more important than signing new players and recognising that continuity [etcera]...Look, these are some of the mature decisions that I think that the current President doesn't get credit for because they are the right decisions to make anyway. But previous governments, I mean, President Obasanjo will remove you for opposing a small view. Ngozi Okonjo-Iweala, yes, he brought her into government but people often forget how you remove her from office.

Tobi: Did he? I thought she resigned.

Akin: Oh, really, you call that a resignation.

Tobi: [Laughs]

Akin: You call that a resignation when someone is outside the country and she hears about her movement to the Ministry of Foreign Affairs. You might as well say, hey, get out of my government. You forget that in his first term President Obasanjo allegedly had unsigned resignation letters of his ministers. I mean, people forget these things. The man ran the government like his personal enterprise. He had three or four... how many senate presidents? Enwerem, Chuba Okadigbo ...

Tobi: Okadigbo, yeah. Ken Nnamani.

Akin: Chuba Okadigbo, he was teargassed. People forget this, this is not... we're not talking about small-time politicians, this is Chuba Okadigbo, the Onye of Onye.

Tobi: But you people also persecuted Saraki.

Akin: What persecution? The man, Saraki, left his party. He left his party. President Buhari did not oppose him, he served his full term, what's persecution? He served a full term as senate president.

Tobi: Now, the Kwara State Government is demolishing his father's house.

Akin: You see, this has a sub-national issue. I'm not going to... and that is an issue that is a Land Use Act issue. The real disease there is the Land Use Act which is an Obasanjo creation.

Tobi: Yeah.

Akin: Who foisted the Land Use Act on Nigeria?

Tobi: From '79 to '99, yeah, yeah.

Akin: This is an Obasanjo creation.

Laughs

Akin: And he had an opportunity to unwind his disaster, he refused. So, look, Senator Bukola Saraki whom I personally like and I always say that, I like and respect him as an individual but the point is he went against his party. The party did not... he became the Senate President. They asked the President, he said I have no horse in the race. Senator Saraki served a full term as senate president. The only time that we saw security forces play games around the national assembly, the DSS... the chief was fired.

Tobi: Okay, but VP Osinbajo was later undermined.

Akin: Those are now rumours. I'm not going to go into the sphere of [rumours].

Tobi: Fair enough.

Akin: I have no credible source to...

Tobi: I don't either for the record.

Akin: So these are all Twitter-related banter.

Tobi: Yeah.

Akin: But let's be clear that ... I always say that Senator Saraki served his full term. He lost at the ballot box.

Tobi: True.

Akin: He was defeated.

Tobi: True.

Akin: Not only was he defeated, his entire... I always tell people that you have to respect the political power of the APC, every senator that defected from the party is no longer in the Senate. It is a message. We don't have to do anything to you when you are there. Dino Melaye was running his mouth like a teenager. Today, he is no longer a Senator, that's how to punish people who do not tow the party line. Look, party discipline is important.

Tobi: I think he's into acting now.

Akin: Or music, that's not my thing.

Tobi: [Laughs]

Akin: But recognise that all the senators who defected are no longer in the senate. It is a strong message that you will be disciplined at the ballot box. We are not going to be uprooting senate presidents. No, we will respect the office. Saraki... Senator Saraki, Speaker Dogara... they were always invited to state events, they will sit with the president, they will smile and they will eat together even though they held different views, this is how you disagree.

Tobi: Okay. Okay. I hear you.

Akin: General Obasanjo... Eh?

Tobi: I hear you.

Akin: President Obasanjo...

Tobi: Yeah.

Akin: He won't even sit with Okadigbo...

Tobi: I hear you.

Akin: He was such a petty president.

Tobi: But, okay, talking about President Buhari and appointments, how in god's name would anybody explain Godwin Emefiele?

Akin: I mean, you know... how in god's name? You will explain god's name in a few minutes...that's an interesting question...

Tobi: There's a reason

Akin: So, what's your biggest...

Tobi: There's a reason for that snark.

Akin: Yes, yes, and I want to understand why?

Tobi: You said... in the early part of this conversation...

Akin: Yeah.

Tobi: You said the primary function of the Central Bank should be price control.

Akin: In Nigeria today, price stability, not control.

Tobi: Price stability, sorry. Now, there are good reasons for that. Inflation is running at amok, destroying wealth in real-time. But here we have in [a] Central Bank President...

Akin: Governor.

Tobi: Governor, sorry...that clearly sees his mandate has a lot more expansive. He is basically doing industrial policy, sometimes, without proper directions or strategy. So I don't know how much... that's my biggest grouse, really.

Akin: I mean, (I think I have...) my partisanship does not prevent me from saying that I do not agree with a lot of what the Central Bank is doing. And in my opinion, I think that the Central Bank...I've said this before and I'll say it again: price stability should be of... today, should be our fundamental objective. And I think that... in fact, bar Chukwuma Soludo, Professor Soludo who was the only one bold enough to say I was going to set an inflation target, I think that that would be where CBN should be headed. I don't think that the CBN is a Development Bank, I think that the CBN is taking over the job of people like the BOI, BOA etcetera and I think that even the multiplicity of development finance interventions affects the impact of those interventions. I think that the Central Bank should also not be focused on fiscal policy, it's not their job to determine what goods should be FX allowable and otherwise. I think that those distortions create opportunities for arbitrage and also take away capital from productive parts of the economy to start chasing higher returns, arbitrage returns. I mean, if we're being honest with ourselves, the era where we had multiple exchange rates and a wide variance between those rates meant that capital was looking for [ways] to exploit those arbitrage opportunities...

Tobi: Yeah. Yeah.

Akin: And that takes away capital from the productive sector of the economy. I think that some of the policies are also, sort of, like, on the go and I don't think that we have enough discuss around the impact of those policies and just the impact assessment isn't done and we now quote numbers from our buyers' positions. So I think that the real issue is that the rigour that you require from a Central Bank is not currently at the level that I hope we'll get to. But, again, when you ask why appoint him? He was a Central Bank governor that was met in the office.

Tobi: Yeah.

Akin: And that was retained and it's at the prerogative of the President to retain the Central Bank governor.

Tobi: True, but...

Akin: And also, some of the things about this conversation is that if tomorrow... let's say... hypothetically, let's say the governor of the Central Bank was replaced, somebody will come and say oh you've removed a southerner again, you brought in its northerner. I'm just telling you the difficulty of making decisions, whatever decisions you make you'll get criticized one way or the other and again the truth is hopefully... I hope that something like the EAC will help, sort of, steer...

Tobi: Moderate...

Akin: Or moderate some of the actions of the CBN and that we will now have an idea's based or at least a knowledge-driven decision-making process. So, I will not say that all hope Is lost because, for me, some of these intentions however noble must be done the right way. I'll be the first to tell you that if the CBN do not, for example, try to minimise milk importation into the country, our diary farm in Ikun might not be revived today. Sometimes, these decisions start as sub-optimal decisions, you've got to make the best of those decisions and, you know, over the medium-to-long term we could actually make those things work for the country.

For me, the biggest issue now is how do we improve productivity? So, why is rice cheaper from China than locally? One, because our yields are very low. Two, because our logistics is dub-optimal. If we quadruple the yields, if we improve logistics, it will be cheaper to eat Nigerian rice than Chinese rice, so, there won't be a conversation of rice from Thailand or rice from Nigeria. And if we see that it's still not competitive because those guys are subsidizing their farmers, we will subsidize our own farmers too. If we subsidize our farmers, I would rather the subsidy goes into production than consumption. So if we were to say let's take out fuel subsidy today, and let's move those subsidies into production subsidies that allow our products, our Agric products...

Tobi: Be competitive.

Akin: Be competitive, then I'm happy. Those are the conversations I think we need to have. We're not having those conversations. Let's ask ourselves, why is the yield on Nigerian rice low? Irrigation? Because you have one planting season in most cases? Your yield is low because your seedlings are poorer? You don't apply the right fertilizer because you don't know what soil types there are? Even the planting methods and the harvesting methods? Then storage? How do we minimise farmgate losses, etc? Those are the issues that we need to resolve. There's a 100,000 metric tonne silo in Ado-Ekiti wasting away. We are now asking Agric producers, rice producers "come and mill in Ekiti." People don't know, Ekiti State is the highest producing rice corridor in South-West Nigeria, more than Ogun and their Ofada [rice]. Apologies to my friends from Ogun State. But the milling capacity is not there, now we are bringing the milling capacity and that's private milling capacity. The silo is run commercially. You the miller, you do silo owner - oya, come and talk. That's how to optimise these things and all of a sudden you see that we are quadrupling the yield per hectare. Suddenly the rice becomes cheaper, it becomes more competitive. That's the conversation we need to have. How do we optimise productivity? Transportation is a productivity conversation. If we minimise the time we spend on the road, it's also improving the productivity of our human capital. Those are the productivity gains that we should be looking for - electricity, transport, agriculture. In my opinion, those are the three critical areas we should be focused on.

But to your point on appointment, I think, again, we have to recognise that many of the appointments are... is the prerogative of the President.

Tobi: Yeah, well, there'll be hits and misses.

Akin: As with all appointments there will be hits and misses.

Tobi: I get that. I like how we've segued into economics again. So here's something (we'll get to audience questions very shortly)... but here's something I want to get your view on. In Nigeria, for a lot of these reforms to happen, what do you think is the biggest barrier? I know someone like Feyi favours structural forces - he tries to take the long view. He talks about culture, slavery and its influence on the current political economy. Whereas some people say "oh, we are too exposed to macroeconomic distortions like oil prices or The Fed exchange rates and things like that." Which do you think is the biggest barrier to reform?

Akin: I think they are equally important. And I won't place one over the other. I think that there are cultural hangups we have that are now hardcoded into how we think and how we respond to issues. For example, there's a serious power index, power distance index issue in Nigeria and you find that because of that people are hesitant to challenge authority which then weakens the quality of information available to decision-makers. So sometimes I say to people that if I oppose the views of my principal or a higher authority, I do it because I want them to succeed. Because I want them to be exposed to the universal nature of the arguments available before they make a decision. People don't see it that way in many instances, they see it as being confrontational and therefore people tend to keep quiet. So decision-making is not tested. Decision-making does not have the rigour, it's not put to the rigorous examination that it should we put through. So that is where sometimes culture hampers decision making. But the truth is that we are quite exposed to external threats and shocks and anyone who doesn't accept that as a preeminent problem is also not taking an immediate view of the situation.

The truth is as long as our foreign exchange buffers are tied to oil price fluctuations, we're always going to be exposed to shocks in the ...government revenue is still very oil-based. Sub-national revenues are still very federal-based, apart from maybe Lagos, Rivers. Now to some degree Kaduna and Kano, many of the states are still very dependent on federal allocations. If you ask me, where is the fiscal targets we must look at in a state like Ekiti, I would always say that, at the very least, our internally generated revenue should cover our recurrent expenditure. We should start by covering our wage bill and subsequently recurrent expenditure, because you can argue that if that wage bill is not delivering the relevant IGR, then you're not productive. End of conversation, right? So, we should first start with: how does our IGR cover the wage bill, then the recurrent expenditure? And then we can get to the point where it starts to support some of the capital expenditure. That's how you want to progressively grow as a state, so I think that we have to treat both equally. I don't think one is more important than the other and part of the challenges of being in the arena is how do you balance both? No disrespect to my friends on the outside, I say to them sometimes "you have the benefit of not being in government, so you can step back and take a broad view of these issues." But for those of us in government, in politics, we've got to balance those things with also how do we ensure... because, look, if we don't hold... if you don't retain power, then your reforms are not mature enough to survive your ideology being out of office. So you have to balance things and ensure that you can hand over to people of similar ideology.

There's a lock on upward mobility, that is the real problem and so those of us who were privileged enough to grow up with some privilege and who can transfer that to our children must recognise that it is our duty to transferred that beyond our children. - AO

And we saw it in Ekiti where after Dr Fayemi's first term, you could argue that the government that followed it not only stalled reforms, in many instances reversed some of those things even to a worst off position than before we came into office or before he came into office the first time. So you must recognise that the volatility of political office has a strong, strong, strong say on how sustainable reforms are.

Tobi: Okay, so, our audience wants to know: are you going to run for political office and at some point?

Akin: That's a very interesting question. I don't know, I don't know. Honestly...

Tobi: Governor, House of Reps, Senate...

Akin: Honestly, I don't plan like 10 years in advance. If you had asked me five years ago, will you be working in Ekiti State now? My answer might have been "no". If you had asked me pre 2015 would you be working in government now? The answer might have been "no". So I always say, like, we are not even guaranteed tomorrow; not to start making a 5-10-year plan of running for office. Obviously, if the opportunity presents itself it's something to consider, but I always say that I don't think I'll make a good politician. I like being in the political process, I'm not sure that I want to be the man who goes to seek for votes. Some of the things you have to do and I don't mean things that are unspoken... some of the compromises that you have to make, sometimes, I think I'm too rigid in my approach to be able to make those compromises. So sometimes it's better to ride on the back of people who are able to balance those things a lot better. I see politicians at play and I marvel at how they are able to coalesce around different opinions and views etcetera and it's not something I'm very good at doing. So, for now, I'm happy doing what I'm doing. By 2022 when hopefully the government is done, hopefully, we would have delivered some significant gains to the Ekiti people and then I can recalibrate and see what's next.

I always say to people that my ideal job would be to own a football club.

Tobi: [Laughs]

Akin: If you ask me "what do I want to do?" It's to own and run a football club.

Tobi: Probably Manchester United.

Laughs

Akin: I know I'll do a much better job than the guys running it today.

Laughs

Akin: So that will be my preferred career change. Yeah.

Tobi: Okay, so you worked in Lagos under the previous administration and the consensus, at least, from what I've heard was that that period was successful and all evidence points to the fact that you actually replicate some of that success in Ekiti as well. So give us the Akin Oyebode production function. What's your secret?

Akin: Okay. I listen to Tyler's podcast a lot.

Tobi: Yeah. [Laughs]

Akin: Honestly, one is: I drink lots of coffee.

Tobi: Okay.

Akin: I've only had one cup today because we've been talking for so long but I drink lots of coffee. This is probably like my third cup today. So coffee keeps me very active, helps me work a lot better. I tend to do my best work in the mornings so I'd like to say I'm a morning person. I get up fairly early. I like to exercise a lot. I think exercising makes you comfortable with discomfort and it helps you push the boundaries apart from what you hear it does for your mental and physical alertness, because I tend to be on the road a lot. But the one big hack, if you ask my wife, is that I am a very deep sleeper. So I have the gift of being able to [sleep deeply]. I sleep very deeply so you can have an orchestra performing...

Tobi: Right there in the bedroom.

Akin: Right there and I'm done... when I sleep I sleep. So I think that just being a deep sleeper improve my quality of sleep, so I can get away with 4-5 hours of very high-quality sleep. I think, for me, the critical lifestyle things. But other than that I try to read all sorts of things, I try to maximize my time, so I've started spending less time on social media because it's become a bit of a distraction and it's also become very intolerant, so I don't spend as much time engaging as I would have loved. But I've started devoting that time to listening to more podcasts, to reading a lot more books and to actually doing what the people of Ekiti state pay me to do which is to bring investment into the state.

Tobi: So now, your friends that are on the outside, how do you cope? Have you become a bit of an odd lots? You know, sitting right next to someone like Feyi, for example, who, even though he's not going to admit it, has become an activist and someone like you who work in government, how do you guys resolve your differences?

Akin: So let me tell you a little secret. I have this very interesting WhatsApp group. There's maybe 15 of us in it.

Tobi: Okay.

Akin: I spend a lot of time on that group and in that group you have me, you have Tolu Ogunlesi who's also (now) a public servant, you have Feyi whose favourite pastime is to tell you everything wrong with the public service, you have Yemi Adamolekun who, in my opinion, has activism running all through her blood, you have Gbenga Sesan who's also a very critical voice of government and I'll keep the others... I'll keep their...

Tobi: Okay.

Akin: Their identity secret; but you can imagine the kind of conversations we have and I think...you see, the point is at the end of the day these are not personal conversations because...if Feyi, Tolu and I have the opportunity, every time we'll catch up and eat and chat and talk about other things, as well as government. So we recognise that at the end of the day we all want the common good and our hearts are in the right place. So we're able to disagree on issues; sometimes, yes, I would admit that once or twice some of us have had to leave the WhatsApp group, I can report myself even though we're immediately pulled back by people like Yemi. But it's important that we disagree and I always say like I'm thankful for my family and my friends because they keep me honest. My father always said to me "remember this son of whom thou art" growing up and I always feel like I have my name to protect and I've always said to people that "look, I'm lucky to have a father who didn't place a lot of value on material gains". So that is always in... it's somewhere in my head, I have a family who's not very keen on anything material. If I bring some unexplained wealth into my house today, my wife is going to be the first person to say "where did you get that from?" and she always says it to me that "if you go to prison for anything and not going to bring any food to EFCC"... and so it's a constant reminder, it's good to have people close to you remind you that "look, you have a name and a reputation to protect". The other thing is that my friends keep me honest and I like the fact that they are able to call out things they think we are not doing properly and be very critical of the government that some of us serve; because it's also important not to stay "tunnel vision" and sometimes when you're in the arena, you sometimes get defensive and I always say, like, everybody needs a WhatsApp group like that; because it allows me to, sometimes, even vent some of the frustrations that I maybe cannot vent publicly and it also gives me an opportunity to get feedback from people I know deep down want our best interest at heart, you know...they are not pro- or anti- any government. They are pro-development, they are pro-human rights...so, it's not a personal issue.

Tobi: Yeah.

Akin: It is almost a situation of "well, if your government did this, we won't criticize the government". And I'm thankful for such people. e disagree on issues but I don't think it affects the quality of our relationships. So I'm happy for Feyi to continue doing what he's doing. When I create a bit more time, then I'll go back into active blogging...

Tobi: [Laughs]

Akin: To share the other side of the...

Tobi: Of the story.

Akin: Of the story and I've told him that at some point you have to come and join us in the arena and come and toil with sweat and blood...

Tobi: [Laughs]

Akin: And to recognise that sometimes the solutions are not as obvious when you have to make those decisions and I'll close that conversation with one comment: people say why can't you take out subsidy tomorrow? and I say, look, there's a clear and present danger that if not well managed a subsidy removal can lead to a deep sense of unrest in the country, and let's be honest about it, people will always forget... when they talk about China and the massacre of '89, they forget that these were deep-rooted issues that came from an economic issue. When China decided that they wanted to liberalise prices and start to remove price control, start to liberalised state-owned entities, it brought a period of painful adjustments and people paid the price for it. And, so, sometimes we can't take these things wholesale. We must say, look, these guys got it right eventually but at this point they missed it. They found their way later but they missed it at this point. The benefit of learning from that example is saying "how do we do it differently?" knowing that we want these outcomes but we don't want to take this medicine, and that is for me why I still always say that we need to have various discussions but anyone who says "oh, everything... the solution to everything is free markets" I always tell them "no, that's... that person is a dangerous person"...

Don't tell my friends I said this.

Tobi: Okay. So, yeah, public service 101. For someone who is passionate about public service and wants to follow in your footsteps so to speak, what are the advices you would give?

Akin: For me, the most important thing is: stay true to who you are. You have to know yourself and I think that it sounds clichéd but you have to... you must know who you are because if you don't know yourself, you will find out if you go into public service. You must know what you stand for, you must know what you cannot tolerate because anything that you don't know will be found out. I always tell people that everyone has a price and the only time for some people [that] they ever know what their price is when that thing is actually put in front of them. Because, sometimes, it's not monetary. Sometimes it's even your development mindset, it's your urge to do good because there's a price to doing good. So I always say that “look, know who you are”, be clear about what you would accept and what you won't accept because that's the foundation of knowing when to walk away.

The second thing I'll say is that: be comfortable before you go into public service, build a career. Either a private-sector career or a business career where you can go into service knowing that I am doing this for the people. It's very very important. I always think about people like my principal - he's is built a career in academia, in civil society - he'll always say to you that "if tomorrow I'm not Governor of Ekiti, I can do many things". He's comfortable going to sit down in Ife or Oxford or LSE or wherever to take a position as a professor. Look at the man in Oyo State, for example, he can always go back to his private business. If you look at someone like Nasir El-Rufai, he ran a very good business before he became a public servant and till tomorrow he can always go back to private practice. So there's a need to build your career because if you don't have a career and you don't have a second address it increases the number of compromises you have to make. I used to say to people that "guys, if this thing doesn't work out I have a career in finance I can go back to, so it's not by force to do this job" and that's very important. But I think the most important thing is, [to] always have people who are smarter than you and people that you trust will always be true to you because, sometimes, the hubris that surrounds public service is significant and power; and even though people can't tell the difference between proximity to power and actual power, they will tell you all sorts of things, like you can do no wrong. Having people who can honestly speak to you and say "look, I think you and the government you serve have gone too far" is very important. So those three things are, for me, the key ingredients of anyone who's taken a job in public service; without all of those three, you'll struggle to succeed.

Tobi: Interesting. Last question: what's the one idea - in line with the entire philosophy of the show, what's the one idea you'll like to say spread all around the country?

Akin: But that's, for me, very easy. Education. Early-stage education is critical. So if there's one thing I would say: it is education from primary to junior secondary level. If you ask me where is the sweet spot: primary to junior secondary education. And I think that that's where Nigeria has missed its potential or lost its way a bit in the last, I'd say, 20 to 30 years. It's that the quality of basic education, early-stage education, has worsened to the point where kids are barely literate, so as literacy worsens, qualitative reasoning, critical reasoning starts to worsen. I sometimes say that my son at 6 is a lot more intelligent than I was at 6. I marvel at the things these boys can do. My three-year-old now, you give him a mobile phone he... the fastest thing he does is how to skip ads or to decline [phone calls]. If I call my wife I can tell if her phone is with my son with the speed at which the call is declined because the kids know, intuitively they know these things; and you start to ask yourself, what about the thousands and millions of kids who don't have access to mobile telephones at 3, who don't have access to these critical reasoning tools, who don't have access to learning languages early, to things like even being able to swim. It limits the kind of jobs you can take, so I ask myself what are we doing to help these kids? One thing I say to people is that I recognise my privilege. And I don't hide it. So I will not come to you and say I grow up eating corn. I won't lie. I grew up in a middle-class family, with a father who was a professor, with a mother who was an educationist and who had a fairly comfortable civil service job. So I grew up with the finer things of life. I'm sorry, but that's the truth.

The problem today is that the society does not allow a poor kid to grow up and meet me at that level. The society has stopped... it has blocked social mobility. There's a lock on upward mobility, that is the real problem and so those of us who were privileged enough to grow up with some privilege and who can transfer that to our children must recognise that it is our duty to transferred that beyond our children. So I ask myself, my child can take language classes today but can that boy in Ikole Ekiti, can he even see beyond Ikole, to say he wants to learn Mandarin or to say he wants to learn French; because when he's 30...i mean, it's a lot more difficult for me to learn languages than it is for a six-year-old, so those are the things that we have to resolve. And for me, the biggest way to remove that lock on upward mobility is early-stage education. So getting kids properly... and I'm not talking about just putting them in a classroom and giving notebooks - how do they resolve critical issues? How do help them solve social issues? How are they more socially intelligent? And it's by having kids play together, work together, do group assignment...the pedagogy is there, it's available. I don't think we are going to reinvent anything, it's just applying those things and getting more kids to school which is why I'm a big fan... if there's any program that I love, it's the homegrown food feeding program, because if for anything, it is getting kids in school and it is ensuring that there is a minimum nutritional value they get that allows their brains to even receive some of this knowledge that they're getting from the schools.

Tobi: Okay, thank you very much, Akin.

Akin: Thank you.

Tobi: It's been a real pleasure.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.ideasuntrapped.com

My Conversation with Adedayo was an enjoyable experience, as you can tell from the lighthearted tone. He is brilliant and still very much underrated. He also has an incredible personal story - the triumph of choice, opportunity, and knowledge. I hope he gets to tell it one day. The recurrent theme in our conversation is knowledge (human capital) and its importance to development. You can also listen on Stitcher here or read the transcript below. Many thanks to Quadbee for the continued Herculean efforts in making these conversations possible.

Transcript

Tobi: This is Ideas Untrapped and I am here with Adedayo Bakare. Adedayo is an investment banker, an economist, an entrepreneur and an all-round smart guy. So Dayo it's nice to have you here.

Dayo: Thanks for having me, Tobi. I've been looking forward to this and...so I'm very excited.

Tobi: So have I, actually. So...let me just jump right in on something you said very recently about trade that, for example, if a country collects twenty percent of its taxes in tariffs, it's definitely killing trade. Just explore that angle a bit and get us into your frame of mind in thinking about that.

Dayo: I think I was responding to a tweet about the implications in terms of tax revenues if Africa countries get to implement this continental trade agreement that was recently signed that would start being implemented in 2020. And so I think one of the issues, (i mean) at least protests, from some segment of, say, policy analysts is that a lot of African countries actually depend on revenues from trade - that is, tariff revenues - and one of the ways I think that happens is...(I mean) most African economies are informal in nature. In Nigeria, for instance, I think IMF estimates that [the] level of informality we have in the economy is around sixty percent. So what happens is if government is not able to tax a lot of productive activities that is going on in the economy, and one of the easiest ways to continue to raise money, which is also tied to industrial policy, is around [raising] tariffs.

In Nigeria, for instance, we are very big on tariffs to encourage what they call local production even if in some cases we do not have the capacity to do it, but [the] government never stops. The auto policy for instance that was implemented under the Jonathan  era raised tariffs on motor vehicles to like seventy percent to encourage FDI into assembly plants for cars and all sorts. Then you start to imagine how does this even make any sense when we really do not have the capacity, we don't have the skill, expertise, we don't have a good business environment that will support industrialization. So why are we embarking on such a policy? And since the implementation of that policy it has failed woefully, because, obviously, I think it's only Innoson that has been able to, at least, benefit from that policy; and even when you think in terms of his manufacturing capacity, how many cars does he produced in a year? In terms of how affordable the car is, is it affordable for the ordinary Nigerian to buy? It's not. So obviously you have... you have that problem.

The starting point should not be that a lot of African countries will lose revenues from tariffs. The starting point should be that does it even make sense for an economy to be reliant on trade for its revenues, that is, in terms of tariff revenues as a share of total government revenues. - AB

Now in terms of revenues, one of the easiest ways to actually raise revenue is also to raise tariffs. You can have thirty percent tariffs, you can have fifty percent tariffs on some items and that is why overtime when you combine that with a largely informal economy (where taxation is very very [low], tax to GDP ratios are lower than, say, other emerging markets and advanced economies) then you tend to get a sense of why tariff revenues make up in a very large of share government's revenue.

Now, my argument is, the starting point should not be that a lot of African countries will lose revenues from tariffs. The starting point should be that does it even make sense for an economy to be reliant on trade for its revenues, that is, in terms of tariff revenues as a share of total government revenues. If we look at most of, say, the advanced economies you'll see that tariff revenues are a very very small component...

Tobi: Yeah.

Adedayo: Of total government earnings and I feel like that is what Africa should try to explore.

Clears throat

And by exploring that we could open up a new vista of opportunities for the economy which could propel growth and prosperity. But the catch is this, it is very very easy to quantify one, the other is very hard to quantify.

Tobi: Yeah.

Adedayo: You can easily quantify the fact that, oh, if we export a certain amount of goods in a year, if we tax it at this rate we're going to obtain this size of revenue. But when you tell a government to, oh, relax your tariffs to encourage maybe even your manufacturing sector such that they have access to quality raw materials, it's hard to capture into, you know, the productivity gains for the company or basically the employment potential of it, and even the taxes that accrue to the government from that extra productivity. It's actually hard for economies to quantify them. So that is why it is easy for someone to come out and say, oh, Cote d'Ivoire is going to lose 10% of their, er...

Tobi: Revenue.

Adedayo: Revenues... because of the implementation of the AfCFTA [African Continental Free Trade Agreement].

So apart the fact that a lot of Africans do not even trade... a lot of African countries do not trade with Africa, so a large chunk of the tariff is actually trade with external partners, that is, Asia primarily now and maybe Europe in the case of Nigeria. I think our major trading partners are Asia and Europe. So even when we start to develop, you know, local value chains to say, oh, we're exporting into the African market. Some of the natural resource that we have, most African countries do not even have the capacity or the industry to use it so we still have to export a lot of those things outside Africa and you can still generate whatever tariff revenues you're obtaining from that. But really the idea is that, for African countries, we have to look past trade as this money-spinning machine for the government. It's something that should spur enterprise and development and the development of processing industries and local value chains. We should see it as something...we should see in the sense that... the way the World Bank captures ease of doing business, say, oh, access to roads or the time it takes to...er say...

Tobi: Register a company.

Adedayo: To register a company or to register a property.

Tobi: Yeah.

Adedayo: Trade should also be something like that. I mean, tariffs should also be something like that - how liberal your tariffs are. Especially in the developing countries. Because it is also important, it goes a long way in what you have in the manufacturing sector and I think nobody would argue, even the government, with what we've seen  between 2015 and 2016 when we had the currency crisis and a lot of manufacturing companies could not obtain raw materials to use in production and we saw the impact on the books those companies and even for government which eventually collects revenue from them. So I think that is the way to actually think about it [but] unfortunately trade is very very contentious, and...

Tobi: Why is that, really? Is it really a case of failing to learn from history because, I mean, you talk about quantifiability, it may be difficult in the case of any specific country to prospectively quantify how much you'll gain from trade. But historically we know there are gains from trade. Huge gains actually. So is it simply a case...or what is really the constraint?... why is trade so contentious for us?

Adedayo: Umm, it's really the way we think about it. In Nigeria for instance, many people see trade - imports - for instance, they see it as "if you're importing from someone, you're at a disadvantage". That's the general idea which the Nigerian media will call waste. So Nigeria wastes 200 million dollars in importing tomato paste.

Tobi: Yeah

Adedayo: Or Nigeria wastes...

Tobi: Or we're losing...

Adedayo: Oh, we're losing our FX [foreign exchange] in importing iPhones...but they never say that about iPhones...

Laughs

Tobi: Or Champagnes for that matter.

Laughs

Adedayo: They never say. So you start to wonder why? I think there are several reasons. One of the reasons that I feel like most people overlook is: the average Nigerian believe that when it comes to certain kind of products, (agriculture is one) the Nigerian might have a palm oil tree in their house or they do maize, you know, in their backyard - they plant maize in their backyard which even if it's not commercial farming, for subsistent use - and a lot of them...it's hard for them to understand that people trade based on what we now know as comparative advantage. You specialise in something you can do better than other countries such that by the time you're exporting to other countries they will buy it cheaper and it's good for everybody.

But the average Nigerian believes, you know, agriculture. We are very big on agriculture. We have the land so I can plant oranges behind my...in my garden, so why are you now saying Nigeria cannot produce this and we have to import it? They do not understand that it's probably cheaper, maybe fifty percent even cheaper to plant rice in Thailand or Vietnam than in Nigeria. Most do not understand that maybe the soil you have (the soil formation you have) is not conducive to deriving high yields of those products; and it is on that basis that you have trading with other nations because you assume that oh, a country can do it better than you and you go there to import it; and basically the average Nigerian doesn't understand that. They just want to know that - palm oil...we are good at palm oil. Malaysia - they came to get their seeds...

Tobi: Yeah, how true is that story by the way?

Laughs

Adedayo: I actually don't know how true that is but they will tell you that - Malaysia - they came to get their seeds for palm oil in Nigeria. And now look at them, they're the largest producers of palm oil... [stuttering]

Tobi: Whatever proxy we use...

Adedayo: Exactly...in and the world. And you begin to ask that okay so let's even assume they got the seedlings from Nigeria, what have you done to improve those seedlings? There are different varieties of palm oil, for instance - they have this Tenera, there is Pisifera, there is another one [Dura]. And what you find that a lot of Nigerians are planting, they are varieties that have not been improved. So in terms of yield, it's very very poor. The gestation period is extended, some go into six, seven years. You see palm trees taller than houses- like, you're basically going to hire someone to help you harvest your fruits. Many do not think in the sense that that is unproductive. They don't think in the sense that yields are very very poor; because when you process, what you can derive, the output you can derive is actually very very low compared to other countries. They just think in terms of we can plant it in Nigeria. They don't think in terms of "can we plant it better than other countries"? I mean, rice or palm oil or whatever it is essentially. So in a way, I feel like that is actually a crucial factor because in my discussions with ordinary Nigerians, they will tell you "I plant cassava, I plant this" but the question is not if you can plant it...

Tobi: We have Bamboos so why do we have to import toothpicks?

Adedayo: Why did we have to import toothpicks, exactly. But do you have the ecosystem to support the production of toothpicks? Oh, we have... there [are] tomatoes wasting in the North why are we importing tomato paste?

Tobi: Yeah.

Adedayo: It goes beyond primary production, being able to produce tomatoes. Then you start asking, what kind of variety of tomatoes are you even producing? Are they suitable for processing? So those are the questions that Nigerians do not understand. Then there's also the case which is something connected to what is, I think, happening all over the world. We're seeing rising protectionism.

Tobi: Yeah...yeah.

Adedayo: It's actually all over the world and one of the things is...

Tobi: It's sad.

Adedayo: It is sad.

Laugh

Adedayo: So for trade, overall, there is a net gain, right?

Tobi: Yeah.

Adedayo: It's been proven historically that there is a net gain to society from trading. However, there could also be displacements...

Tobi: Definitely.

Adedayo: In certain sectors or industries, so you have politicians appealing to those sentiments and a lot of that view. People too, we tend to appeal to those sentiments because even when you see the conversations around the free trade agreement in Africa, a lot of people would say, "oh, they will come and dump goods in Nigeria - the manufacturing sector, they're going to kill jobs, they're going to do this"; and I always tell them "have you even taken a look at the manufacturing sector in Nigeria?" As a share of GDP it's not so big, but when you take it in absolute terms I think there are only, maybe, three more countries that have bigger manufacturing sectors - maybe Egypt. Morocco is also doing a lot now and South Africa.

Tobi: Yeah

Adedayo: Now the challenge with Nigeria is our manufacturing is not quite as sophisticated or complex as what you have in South Africa, in Morocco or in Egypt for instance. But in terms of saying "oh, do we have a big manufacturing sector?" Yeah, we have a bigger manufacturing sector than most of [our] African peers. We actually export a lot of manufacturing products through land and, of course, there's a question where... also when you think in terms even the trade balance (manufacturing trade balance with other African countries) I think we only have a negative trade balance with probably South Africa. When you look at West Africa as a whole in terms of manufacturing, we actually have a positive trade balance with West Africa because we have a big manufacturing sector even if it's just textiles or footwear and garments being manufactured in Abia... I mean Aba. We are sending it to [the] Benin Republic, we're sending it to Togo, we're sending it to Cameroon. If it's not even as sophisticated but we are, at least, doing something.

Tobi: The problem is we don't want them to send to us.

Adedayo: Exactly. Now, the problem is you don't want those things to come into Nigeria. So in that sense, there's a lot of fear around the dislocation of, maybe, workers, and there's a lot of literature on it as well and many people would usually say "oh, they should, maybe, train people who lose jobs and try to integrate them into other sectors of the economy" but I think one of the things we're missing is: even in terms of manufacturing, if we have liberal trade in Africa it could actually open the doors for other industries which we've actually not looked at in Africa that would actually take up some of the [un]employed people. As a share of employment, the manufacturing sector is very low. I don't think the manufacturing sector employs up to ten percent. We all scream "Dangote! Dangote! Dangote!" How many people can Dangote Cement employ?

And even that is connected to my ideas around seeing manufacturing as a way to growth and prosperity in Africa.

Tobi: Yeah, we will get to that.

Adedayo: When you start to explore it. So, really, trade is actually very very tedious in terms of the underlying concepts called comparative advantage. The ordinary man does not understand that and I think that is really the biggest misconception about trade and why we have challenges [in] having to implement liberal trade policies in Africa.

Tobi: You talked about agriculture.

Adedayo: Yeah.

Tobi: I'll like to explore something I was discussing recently with some people. You know, agriculture (and you can correct me if I'm wrong on this) currently employs about fifty percent of the workforce...

Adedayo: Very close. Very close. Yes, forty-five... about forty-five percent.

Tobi: But, again, when you look at history for example; over, say, the last 300 years; the global population - we've grown the global population by about sevenfold from around a billion to seven billion currently. We've grown agricultural productivity to about tenfold, that is, we actually produce a lot of food. But when you see agriculture share of employment, it has gone from about 75% to about 2.5% currently.

Adedayo: Exactly.

Tobi: So, now, my question is, isn't our share of agricultural jobs really a problem for productivity rather than people looking at it as a positive, you know, like, "oh, agriculture is the largest employer of labour in Nigeria hence you have to direct resources to it here". But isn't the correct framework to look at it be that to achieve agricultural productivity we might actually have to lose agricultural jobs?

Adedayo: Yeah, absolutely. It's very interesting because there was something I explored when I was at PwC [PriceWaterhouseCoopers] and we were looking at job creation in Nigeria and we were looking at basically services, the industrial sector, and agriculture and that forced me to, like, look at advanced economies and to see the structural transformation of the economies (that is, the structure of the GDP over time) and what you discover is as these societies evolve, as they continue to grow, the share of [agriculture] employment has reduced drastically, later on manufacturing starts falling and really what starts expanding is [services]. It's the services that really becomes the biggest share of GDP. So in Nigeria, it's actually quite interesting that you mentioned that because we have too many people in agriculture. I believe we have too many people in agriculture and they are largely unproductive. So...I've been reading a lot about what I call political crops in Nigeria.

Tobi: That's interesting.

Laughs

Adedayo: They are very political. Rice is one of them...

Tobi: Okay...

Adedayo: Tomato is one of them...

Tobi: Okay...

Adedayo: Oil palm is one of them.

Tobi: All from Kano.

Laughter

Adedayo: Rice from Kano. So one of the experiences that has shaped my ideas about agriculture is the project I was on with CUSO International. We had to work with farmers in different sub-sectors of agriculture and what you find out is: the challenge is actually...it's a lot of challenges, really.

When you go to the field you discover that it's not necessarily cheap money that is the problem of farmers. I had farmers in my project who had money but it was very difficult for them to source inputs. - AB

The farmers, for instance, one of the ways government approaches it is to say "let's pump more resources into agriculture". By more resources, basically more money - cheap money. But when you go to the field you discover that it's not necessarily cheap money that is the problem of farmers. I had farmers in my project who had money but it was very difficult for them to source inputs. They had to travel, you know, to the next town or the next city just to get fertilizer or to get inputs into what they were doing. So in my thinking about agriculture, what I would like to say is mainly Nigerian farmers are unproductive, yields are very very low and they've not improved for decades. Cereal, for instance, we say one of the most consumed things globally is cereal, right? And, so, I remember I was writing a report and I had to just go and look at how yields are trended over the years and I discovered that over the past four decades Nigeria has made no notable progress; in terms of expanding yields for cereal which is actually...which you could say is crucial to food security, right?

Tobi: Yeah

Adedayo: Draw a chart of other countries - Asian countries - and you'll see the rapid kind of improvements they've made. And I feel like that is what we have to start looking at. Government has to start looking at "how can we drive productivity?" One of the things I've been exploring of late too is: we're giving money to all these people [to] go and start farms. What is the total arable land we have in Nigeria? With the level of productivity we have in this country, when the population doubles according to [the] UN by 2050; if we plant rice on all arable lands in Nigeria, will you be able to feed 400 million people with the level of youth you have currently?  

So the question is - how do we do more using less land resources and getting more value per hectare? (And) that is one area I think the government needs to focus on that they've not been able to focus on, and to do that, really, you probably have to let go of most of the manpower you have [in agriculture]. Because it ties into what you're saying. When you start thinking [about it], agriculture is difficult but in Nigeria it is usually the last hope for someone who can't hack it in other fields.

"I'll go back to the farm", right?

Tobi: Yeah.

Adedayo: They'll say they will go back to the farm as if agriculture is something that requires no intelligence, no form of knowledge or skill. "I'll go back to the farm or I'll plant this".

And that is why a lot of them can't get out of the trap; because when you are involved in agriculture then you start thinking about "you want to start a farm"...a large [organisation like] PZ, for instance, which is doing a lot of backward integration. They want start a farm, they'll go and look for "okay, where are the best places in Nigeria to site this farm?" I want to plant rice, am I planting rice...the land I have, is it upland or lowland? Will I be able to irrigate the lands? The yields on irrigated lands are better [than] on non-irrigated lands for rice. [But] a lot of Nigerian farmers do not know this because they have no skill, they did not go to school, they have no knowledge. Fertilizer: what percentage of fertilizer should I apply? What size? What are the nutrients necessary for this type of crop? The average farmer cannot know this because they did not go to school, they did not have access to even informal education to learn this; then you start asking yourself, should agriculture really be for the people who have not been able to do anything in their life - without skill, without knowledge? It's not. Government is shouting food security. To achieve that, by boosting productivity, we actually need to evolve in the way our agriculture is structured in Nigeria. Smallholder farmers will eventually not take us to the destination we want because they are too unproductive, they're too unorganised and that's even when you're producing a lot, [then] aggregating it becomes very very difficult in terms of access to, maybe, improved seedlings. Government is not doing enough in investing in the research institutes we have. We have agricultural research institutes - I know for one that NIFOR [Nigerian Institute for Oil Palm Research] is in Benin and a lot of the palm oil farmers I monitored then usually travel to Benin to actually get seed for planting in the nursery and sell it to farmers.

Tobi: There is a cocoa research institute in Ibadan.

Adedayo: Exactly. They are not investing a lot for them to actually generate ideas that could unlock our productivity deficit in agriculture. So for me, I feel it is necessary for Nigeria to move beyond the current structure we have where we have a lot of smallholder farmers. Like I've said; they are not fit for the job. If our task is really to feed Nigerians by producing locally, and with full knowledge that eventually we're going to get to the stage where we won't be able to import all of our food needs and we will need to start investing locally in food value chains because if we're going to have 200 million more mouths to feed in the next 30 years.

Tobi: That's scary.

Adedayo: It's scary. And you want to ask "what are we doing?" I mean, I don't know what the government is going to do about it but the current structure - if we want economic prosperity, if we want food security - it can't stand. We need to go into ... When people say large-scale (large-scale) farming, it is because a large-scale farmer would probably be a bit more serious, [she] would apply more thought before going into farming than someone who believes - "Farming is my last resort. When I go to Lagos and it fails, I go back to the farm". A large-scale manufacturer will not think in terms of that. We are recently consulting for a giant in Nigerian consumer space now. [A] household name. So they are backward integrating and they want to start...they've actually started - oil palm plantations. And, do you know what their challenge is now? It's actually to estimate the size of the market. Because there is no reliable data on something as simple as oil palm consumption in Nigeria and that's basically what we're working with them on.

Tobi: Wow.

Adedayo: They want to commit a lot of resources into it and that is why they are thinking about it that - "oh, do these opportunities really exist?'' In terms of selecting the place to site their farms, we know we have more oil palm businesses in the Niger Delta - Benin and Cross-Rivers and all these places. The thought required in terms of the soil requirement, the seedlings requirement, the fertilizer requirement - you can't rely on the smallholder farmers to make those decisions. It is the large-scale farmers, the commercial farmers that would undertake that, even if later on they employee labourers on the fields. But from the strategy perspective and in terms of boosting yields and everything, they are going to apply more thought than the ordinary smallholder farmer. So the question is how does this end? On the part of government I'm really not optimistic that they would do more than just giving cheap loans or giving subsidized fertilizer. Which is another policy area that is challenging. Government will say "oh, we will ban the importation of fertilizer" but different farms, different crops need different fertilizer requirements. It's also a very complex decision for framers to make but you're selling the same type of fertilizer or you're trying to sell the same type of fertilizer for every farmer; for the person planting maize, for the person...laughs

For the farmer planting tomatoes and everything. So you start asking yourself "now, okay, how does this make any sense?" And to break out of this chain, I think what will just happen is a lot of Nigerian companies especially those listed [on the stock exchange] and which we talk to their management regularly, we've discovered that they are trying to backward integrate as much as possible. So maybe that would spur some form of commercial activity and maybe we will continue to have private interests, maybe beyond the requirements for them to process their goods. They are going to start looking to export markets and, you have, maybe, PZ for instance. [They] have an oil palm plantation which they do not use all of the output maybe they would now start exploring outside markets (market outside Nigeria) and that could cause a chain of continuous investment in the value chain. That is the way I see it currently, that those companies (private interests) can continue to expand and slowly we see... because think about it- if Olam continues to invest in rice for instance and we know Olam will prioritize yields and all those things and they will be a bit more productive, at least, than the smallholder farmer; we could get to a stage where Olam (even in the domestic market) become very competitive such that even the normal farmer won't be able to go to the market and say "oh, I want to go and sell my paddy" because there is an Olam who has a large farm with very very high yields and, maybe, probably cheaper prices, better quality rice output that would now make the smallholder very uncompetitive and as a result of that you'll see that the share of smallholder farmers in terms of planting some of these crops that are so vital to food security continues to fall and you continue to have a lot of a private interest in that area.

Unfortunately data in Nigeria is actually very hard to gather and that is one of my issues also with development interventions in Nigeria because when you look at multilateral firms or NGOs. Once they embark on projects, there's usually a bit more thought into it; even in terms of monitoring and evaluating such projects.

Tobi: Even if they sometimes invest in the wrong projects.

Adedayo: Yes. Even if they sometimes invest in the wrong projects but to an extent, you can, at least, get data to analyse and see. Because we say "knowledge! knowledge!" Knowledge is compounding.

Tobi: Yep.

Adedayo: We just didn't start using laptops or iPhones. It was some people that started and we kept building on it, we kept accumulating that type of knowledge. So the questions for the Nigerian policy makers is: all the government interventions which is one of the reasons why... probably why all these bad ideas persist anyway because nobody actually tracks anything. You don't monitor it. The CBN does not issue a policy paper to explain their reasons for backing cassava [or] for backing oil palm or collect data on loans that were extended to farmers, repayment terms and everything. On productivity, monitoring those firms sort of productivity for their yields. I've never seen any report on that from the CBN or from the Federal Ministry of Agriculture. Yet they pump billions. Then it's now difficult for us to measure - did this program actually work? Did it not work? What are the lessons from the past that we can actually apply to recent policies? We don't. Because nobody is keeping the data. So it's one of the ways I think all these bad ideas persist because we're not collecting data on it. There is nothing to analyse. You're basically flying blind. So as analysts, we basically just say "oh, this is not likely to work" because this this this or because in other countries that have done it this is how they've gone about. But in Nigeria, we've been doing development intervention since when?

Tobi: Yeah, a long time.

Adedayo: For a very long time and you will discover that the same ideas continue till today.

Tobi: Exactly.

Adedayo: So you start to ask if it's not working then why do you think it's going to work now? What are we doing differently? Are we learning any lessons? I feel like if we've been learning a lot from those decades we should have had a body of knowledge that we should have discarded some ideas already that this is not working and we should continue to build on it even if it takes a long time. Currently, it seems like everything is the same. Which is the same thing. They closed the border in the 1980s, they are closing the border today. So, really, that is the way out, I think. We are going to have more private capital into agriculture, not deliberately or incentivised by government themselves but by the fact that as more companies see reasons to backward integrate, as they see reasons to even improve competitiveness even in terms of their sourcing because they need to protect their margins and to be competitive globally. We're going to see a bit more interest and that would maybe force us to explore export market and that is the way out, basically. I have no faith in the government to take us out of...

Tobi: That's interesting. There are two things I'll just like to quickly pick up on from what you said. You talked about political crops...

Laughs

Tobi: I don't know, I love that term so much and it's one of my challenges with the concept of comparative advantage...

Adedayo: Okay.

Tobi: I think that the problem with comparative advantage in our own context is that we naturally see our comparative advantages in our natural resources and when we try to do development that's where we...

Adedayo: Focus on...

Tobi: Funnel resources into, and historically you'll see that that actually causes deindustrialisation because some of your trading partners (they) then specialise and they will only deal or trade with you based on your identified comparative advantage which may just be primary products and then you make a lot of money when prices (international prices) are high but you have no industrial capacity whatsoever. So do we really need to rethink the concept of comparative advantage in our own context?

And then secondly, maybe a bit of a push back on large-scale farming. One underexplored area is land rights for farmers. I don't work with farmers so I don't know much in that area but from a little bit of experience, I know that some of them work in farming collectives. Some of them do not even have rights to the land on which they plant and if you recall one of the big policy changes in Asia, for example, was to give farmers the rights to their land. Even smallholder farmers became productive. So is it really about farms sizes or is it about who owns the land, basically?

Adedayo: Let me start [with] the first question. Yeah. I think in terms of comparative advantage, us looking at natural resources, I feel like...I really don't think it's a problem with comparative advantage. It's more of a problem with what we've decided to focus on, which is also connected to I think what you mentioned earlier about government organisations going into wrong projects. I think the starting point is trying to ask this question: how do we...in the case of Nigeria, for instance, how do we create millions of jobs, right? So I think what they look at is just - which sector employs...

Tobi: Close to that?

Adedayo: Close to that. Oh, Agriculture. Okay, let's invest in agriculture. So it's something of that sort because they would say... they'll say you have comparative advantage. Why? because a lot of them are in agriculture already. Like I said earlier, they are really not very knowledgeable people, so they're already in agriculture. I can't say Nigeria is even more productive in terms of maybe planting tomato than a comparable country. They [policy makers] can't also say that. So rather than say, maybe, explore other sectors or maybe even other sub-sectors even under agriculture that could kind of bring a lot of change, they keep focusing on the same thing. For me, I really don't think it's about comparative advantage. You see comparative advantage in what you can explore. If you don't believe human capital can be explored for development, for instance; it's hard for you to want to now say "oh" or for a development organisation you could say - oh, Nigeria has a lot of people - or we have a lot of young graduates and if we don't see them as capital to an extent, we might not much see them as comparative advantage...because basically some do not look at human capital as comparative advantage and it could actually be one of the things that could unlock maybe some of the progress we want to see. But you are fixated on agriculture. You start from the sector and you're now trying to find within the sector what Nigerians can do better. I really don't think development interventions is from the perspective of what people can do better. It's from what are people doing and how can we make them better at what they are doing? That's why if you read FAO, World Bank and all those research, they'll say "oh, we have a lot of people, we have women in farming". The question is should these women be in farming? Are they planting the right things? Should they be trained to go into other sectors where they could be better used as labourers? No. What they try to do is: they're already farming, why don't we make them better at what they're already doing? It's really not from the idea that... maybe we should...

Tobi: What's the best to use...

Adedayo: What's the best use of these...

Tobi: Of their...

Adedayo: Of their labour?

Tobi: Of their capacity?

Adedayo: Or their capacity. So it's basically around - let's just help them do what [they do]. It's just like the average Nigerian man and maybe you are a rich family man where people come and knock on your door and they come and meet you and you're like "okay, what are you doing now?" [The person responds] "Oh, I'm into furniture".

Tobi: And you give them money.

Adedayo: And you'll be like "so, what do you need to improve your business?" Oh, I need a loan. You give them the loan. You're not asking whether "should you be doing carpentry? Shouldn't you explore something that would be better for you? It's a very lazy approach, I agree with you. So in terms of comparative advantages, I think we've been... we've not been open-minded a lot about it and we're not ready for the kind of changes we're going to have to make to look past maybe the natural resources sector has comparative advantages for Nigeria. In terms of (also) natural resources that are very very easy to get, the oil and gas sector for instance; one could say is natural resources, right? And it's one of those sectors where overtime maybe we should have seen more industrialisation if we've had a lot of local content into the industry. But it was so easy for us because we just had the resources. We had no capital. We didn't even have the labour because we don't have skilled personnel to actually say "oh, we want to mine oil or anything". We just hired...

Tobi: IOCs [International Oil Companies]

Adedayo: IOCs. "Come and do this for us". It's like you're in your house...so I hire cooks, I hire cleaners. If I live in a rich man's house or my father is rich, I might not know how to do those things and they could be useful skills for you maybe in terms of application even if you don't want to become a cook or you don't want to become a cleaner. But nobody thinks about that and that is one of the things I've seen in that sector as well.

Because if you think about oil and gas, it's very capital-intensive. You need a lot of knowledge. We need to be able to build things and apply things and yet we've not seen it (kind of) spur innovation in other sectors of the economy (that is, the knowledge we've learnt from building ships or building rigs or doing all those things), we've not been able to see it in other parts of the economy.

Tobi: We can't even maintain refineries.

Laughs

Adedayo: Not talk of building new things. Even in natural resources, there are unexplored areas that could actually cause a chain of development in other sectors. We've not seen it, really and it's actually quite disappointing. I think also [that] it's on the part of [the] government to do most of these things. In terms of local content, they're celebrating this Egina field. They're saying they did a fabrication and whatever at Ladol here in Nigeria. But ain't we like four decades late or something? because imagine if we've had that from the start...

Tobi: Yeah.

Adedayo: A lot of those people would have...with the knowledge they've acquired in oil and gas they would have probably gone into other sectors maybe the one servicing the oil and gas industry then you'll see knowledge keeps, um..

Tobi: Percolating.

Adedayo: Exactly. All over the economy. So I think for us, it's not really just even about natural resources, [our] oil and gas experience, we've not taken advantage of some of the benefits it would have offered us in terms of building an industrialized economy or a knowledge economy. The second question was on, umm...

Tobi: Farmers. Land rights.

Adedayo: Land rights. Yeah. So let me give you a bit of perspective of what I've learnt. Okay, so I worked in Yala local government. It's very close to Ogoja. Ogoja is one of the popular places in Cross River and Obudu.

Tobi: Okay.

Adedayo: Yeah, very close to Obudu [in] northern Cross River and [in] one of the villages we worked in, one of the issues discovered was [that] it was very difficult to get land for women because women were not sort of entitled to lands. So even if the father dies and there is heritance, land inheritance...

Tobi: Yeah

Adedayo: It goes to the men. It doesn't go to...

Tobi: To the women.

Adedayo: To the women. And one of the things we were trying to do then is try to talk to the communities to actually relax some of those rules. So using that as an example, I would say to an extent, yeah, it affects because they pay rent on the land. And [for] some, the cost of acquiring some of the land can be bad. So for women farmers even if they're very productive on their farmlands, when you account for the cost of acquiring the land or even securing the land you will discover that they are not getting quite much in terms of their output. Yeah, I absolutely agree that land rights are critical to farmers but I don't believe it's the major thing holding farmers back.

I feel like knowledge; you can have land and not have knowledge and you'll still be unproductive without knowledge. So maybe the farmers we had in Asia (it's maybe something I have to read up on)...farmers have access to land, right? It's a good thing for farmers in Asia but I believe that was not the single most important determinant of their productivity.

Tobi: Definitely. Definitely.

Adedayo: Exactly. There is still a bit of knowledge gap with an average Asian farmer compared with a Nigerian farmer. But I feel like, from the experience I had on the ground, land is absolutely crucial; because it gave us a lot of headache. You know when we've invested a lot of people - technical training, giving them grants, train them, sponsoring them, feeding them, and at a point where they're supposed to start engaging in that activity they weren't able to secure lands or the lands they were able to get which men were able to get very easily, women had a challenge getting it or they had to pay a high price for it and you discover in most cases most of the lands they eventually get are those lands that are not quite as good and that would take them to walk long hours before you get to... you know when you have to walk 1 hour 30 minutes. You want to go and farm, you have to walk for 1 hour 30 minutes...

Tobi: Wow.

Adedayo: To get to your land before you... you can imagine the energy you've lost by walking 1 hour 30 minutes...

Tobi: Yeah.

Adedayo: Just before you get to your farm then you start asking, you know... and that is one of the challenges most of these people have in terms of securing access to land. So I feel it's crucial for us to figure out a way to encourage farmers to have access to lands, especially for women. Women are at a particular advantage but I feel like it's still not going to (kind of) release the kind of impact we want in that sector we still need knowledge, really.

Tobi: I agree and a quick side note on that point. I think one of the least appreciated things about development in Asia is the Incredible amount of human capital that went into some of the reforms, you know... like, when you see people, they say "oh, Asia did this and hence we should do it too". We usually don't think about the state capacity for one, that is, the human capital that is within the government bureaucracy itself. These are incredibly knowledgeable guys who read a lot, who researched a lot, who actually were on ground and know what is going on in their countries and they could actually push through those reforms and they could see where things are going wrong and tweak and change course if necessary. You think about Korea -  sometimes we think of that history begins at the inflection point but usually, it doesn't, you know...

Adedayo: Exactly.

Tobi: Because I've read multiple papers about even the incredible amount of human capital even in terms of industrial capabilities that Korea acquired under Japanese colonization. But we look at an independent Korea and what they did and we say "oh, yeah, they did so and so policy and we should try and replicate that".

Adedayo: Neglecting the knowledge transfer.

Tobi: Exactly. So I agree with you about human capital, it's extremely important and I'm quite big on that as well. Let's talk about private capital now which you mentioned earlier. Now, shouldn't capital [also] be going to processing? I remember in one of your articles you talked about the processing gap in agriculture in Nigeria. Should private capital really be going into the same things that we've been doing which is production? Because you read things like Ivory Coast, for example, only gets about one point something billion [dollars] from cocoa exports whereas Germany processes the same cocoa into coffee and other products and gets three, four times the value. So shouldn't private capital be exploring processing? Wouldn't that be a bit more... trails off

Adedayo: Yeah, yeah, I believe so. And one of the things I explored in that article was to say one of the things holding processing back (agricultural processing back) for most of the companies we have in Nigeria is because, most times, in terms of the inputs they want, in terms of quality of the inputs, in terms of the quantity of the inputs, they can't get it locally because of the way Agric is done currently. We have a lot of smallholder farmers spread across [a] vast geography. Sometimes unorganised, even in their organised state, sometimes they're still very very tiny. And as a company, you want a reliable source...

Tobi: For your supply.

Adedayo: Of supply because you don't want disruptions to productions, you have commitments to meet as well...

Tobi: Yeah.

Adedayo: For your business. So one of the ways Nigerian companies are trying to overcome that is actually what they now say backward integration where they have to do everything on their own. So rather than rely on the farmers to give me the quality and the quantity I have, why don't I invest in the primary bit? And most of the challenges Nigerian farmers have, I am able to leapfrog in because, maybe, I build a warehouse, I build storage facilities and all those things. But to come to the point about shouldn't private capital be going into processing? Yes. Absolutely. I believe private capital should go into processing, not just [in] terms of raw materials. If Dufil Prima or...(that's the makers of indomie)... or PZ... If they're able to get a lot of land and they're able to improve processing, of course, a lot has to do (also) with the business environment in Nigeria for you to now say processing is competitive for other the market. Because in a situation where there's a lot of protection of industries, how do you know you're truly competitive?

Tobi: Yeah

Adedayo: When all you do is sell to Nigerians? So when you now start looking at processing and you discover that we're only just 200 million people and you need to export outside the country, then the protection you've enjoyed from government might actually now put you at a disadvantage in terms of being able to compete with someone from Ghana or someone from Cote d'Ivoire. The initial stage is what we're seeing currently in terms of companies themselves going into primary agriculture. Like I've said, knowledge is going to be accumulated - with the progress we are able to see over time, if they are able to not just improve the way they do their business and if they're able to really maybe fine-tune whatever models they are using because many backward integration models have failed as well.

Tobi: Hmm...

Adedayo: Dangote Tomato, for instance, I think they've opened it since 2016, they've not produced anything.

Tobi: Is it really closed? I hear it's closed.

Adedayo: It's closed; because people just think things are easy to do [simply] because you see tomato waste in some place. So I think what he did was he had a contract with the farmers that, oh, don't worry, I'll give you seedlings, I'll give you maybe fertilizers, I'll give you a bit of capital. Plant this thing for me and come and sell to me. The model failed because some of these farms...it's still the same farmers, right?

Tobi: Yeah.

Adedayo: They're still not knowledgeable enough or anything. Then some would say, oh, they didn't get the inputs on time before the planting season or the capital on time. Some would say the agreement they had with Dangote Tomato (maybe) at the point of planting...markets change rapidly, prices change rapidly. If I signed a contract to give one ton of tomato to Dangote at five thousand naira per ton or something, for an example...

Tobi: And you lock that in.

Adedayo: And I lock that in and...

Tobi: And then...

Adedayo: And upon harvest, I discovered that the market price is seven thousand [naira]. The Nigerian farmer doesn't...

Tobi: Wahala ti de [there is trouble].

Adedayo: There is obviously conflict then...then how do I maximize the output? So in most cases you'll see them, (they'll go and sell to the...) they will go and sell at the open market to get... which of course I can't blame the farmer but it's one of the things you have to start thinking about even when you say, oh, I want to contract farmers to do all kinds of businesses for me. So that has actually also failed. Some companies also, [as a result of] lessons from what they've done before, they are trying to use it to start new programs or new backward integration schemes that would actually, maybe, be more favorable to them and support their type of business. For me I believe if we are able to get to an extent where a lot of these firms...a lot of them are able to do this or keep doing this, it could even force a lot of investment into processing. If I know that Olam, for instance, can supply these raw materials rather than exporting it out of Nigeria, you could have maybe private capital come into Nigeria. Even maybe local capital [would] want to go into processing because, at least, it's easier to...I mean, I can source locally from competitive producers - Olam or even if it is PZ that wants to later do that, even if they don't intend to expand processing to that scale.

I feel like the developments we see could spur some interest in processing locally because you've had a lot of private interests that would come into the market and be like "okay, if there is not a reliable stream of supply for this product, do I want to commit? I don't have the capital to commit to doing primary agriculture, even the resources in terms of both money and personnel to now continue to go into that. Of course, I can't quantify the number of businesses that would likely go into that but I feel like that is one of the advantages we could derive from people who are truly interested in one of those segments but do not want to do the rest of those segments. And [if] we have private capital into primary production, it could spur a lot of more industrial processors. And I feel like in every country, someone has to do the primary production anyway...

Tobi: Definitely.

Adedayo: Exactly. So, even if, before you have processing or whatever in the US and everything, someone still does the primary production but I feel like we can do it to an extent that it could now generate a lot of interest from processors in Nigeria.

Tobi: Okay. So let's look at the role of infrastructure in all this because...and I think you've also written about this so I'll be leaning on that a bit.

Adedayo: Yeah.

Tobi: I heard that line multiple times even from our chief economic officer or is it the Central Bank governor...

Laughs

Who say things like "oh, I asked textile manufacturers what is the problem? They said power". And then CBN is going to fix that. "Oh, I talked to toothpick manufacturers and they said power or roads or"...

So what exactly are the infrastructure bottlenecks around industrialisation in Nigeria? Because what you see is that a lot of policy even around infrastructure still mimic are structural problems. For one, we know that after the colonialists left we stopped investing in railways, for example. That's a colonial infrastructure for some reasons, and even around things like road repairs or road construction, you'll still see things like ethnic fractionalization. Depending on who is financing the road, you'll see a lot more inter-state projects if it's the Federal Government and at local level you don't really see big infrastructure projects, you just see water pumps and um...

Adedayo: Toilets.

Tobi: And toilets. So what are the infrastructure bottlenecks and what can break the logjam?

Adedayo: I like what you said around the CBN governor - [the] minister of everything - going to meet this person "what do you need?" Oh, meet that person "what do you need?" I feel like it's a bad way to go about policy because it shows that we don't even have... like a vision towards the kind of country we want or like a coherent strategy. I feel like if we have maybe our economic priorities figured out, then our infrastructure should kind of be tailored. The kind of infrastructure we build should be tailored to the kind of vision we have for the economy. So the challenge is this: we have a lot of young unemployed people, in fact, we have... one in two Nigerians...they are either unemployed or underemployed. Now this is at the moment...

Tobi: One in two, is that right?

Adedayo: Yeah. Underemployment and unemployment is almost 50%.

Tobi: Wow!

Adedayo: If I remember correctly. Okay, maybe a little over 40% anyway. But I know for youth...it's worst for youth.

Tobi: Yeah.

Adedayo: Yeah. So the challenge is going to become even more achening in the next 20-30 years when we have a lot of people in the country. So the question is, is policy really thinking about all these things? I don't think they are thinking about it. But what should they be doing? I think they should be thinking about it and to come up with a strategy. I've seen a lot of debates around so what is really the vision for economic prosperity in Nigeria? Do we have a vision to say oh, we want to industrialize or we want a knowledge economy or we want to do anything we want to? There is no vision for that. Even when we see the economic programs that [the] government brings out, they basically want to do everything and everything they want to do still mirrors what we have currently on ground. We invest in agriculture, we invest in agriculture, we do this, we do that. We don't know what we're trying to achieve by investing in agriculture. We don't know what we're trying to achieve by investing in human capital. We're just doing everything, and, for me I think, um, prioritising... because there's a shortage of resources. And in economics we say, oh...it's essentially the study of opportunity costs because you can only have so much and you have so many things to do.

So I have this farmer coming, I have textile coming, I have Nollywood coming, I have these people coming to... I mean, to come and meet me and I am trying to do different kinds of things for them. I'm not thinking in terms of what should the economy really be focusing on for the future? What will be the biggest driver of jobs or productivity gains in the economy and let me invest or build infrastructure around that for people? I think one of the reasons why Emefiele is doing that is because they've not thought about that in terms of having a coherent strategy or a vision for the Nigeria of the future, or how the economy is going to be or how we're going to create jobs for people. But in terms of infrastructure imperatives, for me, I always tend to think in terms of...I'm very very... I'm really not keen on industrialisation so to say...

Tobi: Hmm.

Adedayo:: 'cause l feel like... I just feel like that has passed for Nigeria. I don't know why. I keep reading a lot about industrialisation and [how] it was the biggest driver of growth in Asia. It lifted millions of people out of poverty, right?

Tobi: Yeah.

Adedayo: And even in terms of countries that are leaning more towards services like India, we've seen that they have also been struggling economically. They've not done enough in terms of lifting a lot of people out of poverty or creating economic prosperity or the kind of growth they had in China, sort of. But in Nigeria there are just too many competing factors. For manufacturing, we say, oh, we need road infrastructure. We know road infrastructure is terrible in Nigeria. Ordinary moving goods...

Tobi: Hellish.

Adedayo: Hellish, right? I was seeing something... I was reading an article and it's cheaper to import from outside the country (from China) than to move goods from one end of Nigeria to another end.

Tobi: It's cheaper to lay an intercontinental fibre optic cable than to take it from Lagos Island to mainland.

Adedayo: Exactly. So... and I start thinking what is really the way out for businesses? Does it make any sense for businesses to go to that extent? Of course we have our ports infrastructure issue, which is also crucial to industrialisation, because I can't start a manufacturing plant in Borno and decide that Lagos is the port I'm going to be importing materials from.

Tobi: Yeah.

Adedayo: I don't see how that makes any sense for the country to have.

Tobi: Yeah.

Adedayo: It makes no sense for your business to say, oh, I have a manufacturing plant in this place and I want to import through this same port in Lagos. In terms of roads too, the roads are not just bad, then you have human actors (state actors) on the road who are on the roads for safety but who are encumbrance to doing business, because they'll be asking you for money; and If you speak to businessmen they will tell you if you're moving goods - interstate in Nigeria - the kind of bribes you'll pay before you get your goods down to where you're taking them to. So, obviously, I feel like roads are also absolutely critical. In Nigeria, my major idea is, I won't say I know all the kind of infrastructure we need to build... my own is we should agree on what we really want to do. If we think industrialisation is the way to go to accommodate a lot of Nigerians into the labour force, then let's say this is what we are pursuing and let's try to build infrastructure that will make it happen. You know you need roads, you need ports, you need rail, you need those things. You need power.

If it's service economy you want to build, then you start thinking differently again. You mentioned laying fibre and if you want to have a service economy you might want to start thinking about communications and having to invest in broadband and all those things. So it's basically a decision between what you want to do - you don't need to privatise everything... build rail, build...we don't even have the capacity to do it. The government doesn't have the capacity to do it and we don't have a lot of private capital to pursue that. So I think if government comes out with a coherent strategy then we'll know the kind of infrastructure that is actually critical. If you say you want a service economy, you need human capital. Even in industrialisation too, you need human capital, but the level will obviously be different. Knowledge economies will have... you can't compare service workers in the US to factory workers in Vietnam or in Bangladesh. Even if they're educated and you need human capital in manufacturing. I don't want to call it, maybe, low skilled... obviously within human capital there are different strands, some are low-skilled, some are higher-skilled in what they're doing.   

So for Nigeria, I think it's something that we need to come out and decide and build the required infrastructure. Maybe we then really need to build a lot of rail. Maybe we need to just build (expand) our broadband or something and invest in more schools and in more health clinics rather than building a lot of roads going to nowhere. So I feel like in my thinking about infrastructure, and that was really the idea around the article - to say we are resources starved and we really need to prioritise. We really need to say this is what we want to do and invest in the infrastructure to make it happen. In a case where we have that, then all these distractions of the committee of Nollywood people coming to my office...

Tobi: Laughs

Adedayo: Or committee of cow farmers coming to my office to say, oh, this is infrastructure we need, this is infrastructure we need. Because that acts as a signal to private enterprise, to people in the economy, that this is government's focus and they will also start to explore opportunities along that line and you're not bothered about all these distractions about people doing rice farming or tomato farming or how you can help them build their own infrastructure. We can't do everything. We really need to prioritise.

Tobi: Do we need more private initiatives? Because I don't know...I get squeamish a bit when big things that could really really move the lever of the economy relies a bit too much on government. Because we all know some of the problems in that area, and the slow decision-making process and everything. For example, Tolaram is building a port in Lagos, I think with Lagos state government and a few other partners. So should policy really be about making such initiatives easier and then letting private capital just do some of these things?

Adedayo: For me, I think, the role of government is absolutely crucial even for whatever you want to do. I was reading about when US wanted to go to space and the kind of investment they made and how that sort of created knowledge for other industries and how they were able to build capacities along that line. And you want to think that was state-led to an extent. It's very easy to not credit some of the inventions you see to government even if it was as a result of a government grant or government-funded projects (on behalf of government). So I believe, absolutely, we really need high-quality people in power, to be honest. I think that's probably one of the challenges we have in Nigeria.

Tobi: Yeah. I take that point but it's interesting you mentioned the Apollo project. Because, really, even for a big economy like the US undertaking such a huge project, what you see is that behind the veil of everything there are lots of private contractors, private companies and government just acts basically as the coordinator. So should we just let government coordinate rather than looking for money to invest and saying that "oh, because tax-to-GDP ratio is low, we can't have good roads; and because you can't raise VAT, the second Niger bridge will be slow" and things like that.

Adedayo: Exactly. I absolutely agree with... I agree with that. But you know, the thing is coordination too...

Tobi: Takes knowledge.

Adedayo: Takes knowledge. And you need Trust. For instance, you talk about PP projects and in some cases government will take it over again, right?

Tobi: Yeah, and sometimes...

Adedayo: But they will not meet their commitment

Tobi: Yeah. Yep.

Adedayo:  So imagine you...

Tobi: There is actually lots of that in oil and gas...er [industry]

Adedayo: So imagine when you are now saying...you come out with a very bold policy proposal and they're saying "oh, don't worry we're just going to coordinate everything" and... I mean I'm even assuming you have the quality human capital to actually create strategies and to probably coordinate such systems and you invite private capital to "oh, let's come and do this". I feel like for Nigeria to do that, a lot of private interests will be reluctant because of the kind of history we've had. So it's not just about even knowledge, it's about trust in the ability of the government to do some of the things they want to do. So yeah, I absolutely agree with you that government can lead a lot of things and they do not necessarily have to do it themselves.

Tobi: Yeah.

Adedayo: They do not need to provide the capital themselves, private interests will do that on their behalf but they need to get coordination right. They need to get the strategy right initially and you need people in government to do that. Private contractors are not the people that decide what the US government should do. It's people, knowledgeable people within...

Tobi: The government itself.

Adedayo: The government that come up with it and now say "oh, invite private capital to pursue some of these things". It's something we need to think of. I feel like government needs to completely eradicate this mindset that they are going to fix everything because that the idea we're seeing with this loan they want to go and get. That oh, we refurbished this, we refurbished that. You want 30 billion dollars that you can't even pay for, you can't even pay for the existing level of debt.

Tobi: That you probably cannot even raise.

Adedayo: Exactly. Because I don't know who will give you 30 billion dollars.

Tobi: I was talking to my partner on that and my first reaction was there is no way the Nigerian government can raise 30 billion dollars. This particular government.

Adedayo: Exactly. I feel like it's something we're ... we really need more quality people in government. Unfortunately, we don't have enough quality human capital...maybe the few people who want to do it (they) get frustrated out of the system because of bureaucracy and all kinds of challenges we have. But I believe the starting point is getting hiring right in the public sector. To have people who would then say "private capital, come and do this or come and do that...this is what we want to do but we want you guys to lead the effort".

Tobi: There's an interesting story in the news around that area recently.

Adedayo: Of course.

Tobi: So yeah. Getting hiring right. It's absolutely crucial even in public service. People usually think that you don't need smart minds to work in government but it's probably even a lot more important. Private sector are going to sort themselves because there is private interest at stake so you better get hiring right or you lose your money. But in the public sector where there is a lot of ethical concerns around public trust, I think it's very important.

So what's your biggest argument against industrialisation? I know we have discussed this privately and you said you don't really think that manufacturing and industry is really going to be a big advantage for countries like Nigeria going forward. What's your best take on that?

Adedayo: Mine is...from what I read about most of these Asian economies, there's a lot of importance attached to labour. In terms of the quality of labour, in terms of the cost of labour itself and this is not even to mention the physical infrastructure requirements of having an industrialized economy. And in terms of the quality of labour, of course, we have a lot of people in Nigeria, I feel like they don't have enough knowledge for an industrialized economy. I feel they are expensive. And it's not just cost, cost is not an absolute thing you look at. You know cost is measured into productivity [so] even if your labour is cheap in nominal terms (in naira terms its cheap), if you're not productive it's still expensive for the manufacturer. So in terms of the productivity of the people, I've not just seen it. I don't see enough in terms of that [productivity]. Because we are not actually competing with ourselves, we are competing with the rest of the world. And what happened in Asia? Asian countries did not just build an industrialized economy for their consumption, they built it to [be] globally competitive. They built it for the world. So when we say we want to build an industrialized economy we are going to be building it for the world, right?

Tobi: Yeah.

Adedayo: And in terms of that, when you look at what other countries have been able to do or where other countries... Where they are currently, I don't think we are best suited to be the ones to bring [about] a situation where maybe you have less interest in Asia and you have maybe more interest in Africa. What you've seen in particular is, basically, we've been seeing switching even within Asia. So if China is not that attractive for you for light manufacturing or anything, you see people go into Vietnam, go into other...

Tobi: Bangladesh...

Adedayo: Other Asian countries, not necessarily coming to Africa. So and, yeah, [they are] a lot of opportunities there even to explore within Asia, not talk of how easy [it is] for knowledge to be transferred within Asian economies compared to just coming to Nigeria to come and say "oh, you're going to start a factory here or whatever". Then also in terms of capital, which is connected to the physical infrastructure requirements...maybe one of the overlooked things is, usually... Economists will say "oh, you need to save to accumulate capital and invest and all those things and if you're not doing enough of that, then you better be importing capital via foreign investment". But you see, in Asia, there was also a lot of local capital generated via savings. I know China has one of the highest savings rates in the world and when you're thinking in terms of creating development internally, in terms of building infrastructure or even the resources to educate people, then you're thinking in terms of - do we actually have the resources needed to kick-start the kind of development we want to have industrialisation-wise in Africa or in Nigeria? I don't think we've had enough of that because... I don't know what is responsible for weak savings (and I don't want to go into that), but I feel like on our own, we are not doing enough in terms of accumulating capital to invest in those areas. So it's not really just about shortage of knowledge or low productivity, there is also the capital bit about it that we are not generating capital internally and we are not receptive. So even when you have capital deficit, the next thing is to encourage as [many] people to come into your country to come and invest, bring external capital to come and invest. We've not created the environment for that to thrive as well or for anybody to see, for companies to see Nigeria as an attractive destination for investment. And so really, what then is the future of industrialisation for us all that put together? One could make that argument too for services, right?

Tobi: I was just getting to that.

Adedayo: One could make that argument for services but I feel like...okay, I'll use an example - services now, for instance, we talk about the recent... I'm talking about modern services...

Tobi: Yeah.

Adedayo: We're talking about a lot of activities around tech currently happening within the economy and how people have gone [and] are doing well in spite of the government. Not because the government is deliberate in actually spurring innovation in the economy and I'm thinking to myself, how come we've had a local industry, of course, it's not still that big as we want to be but to put it into context - the capital that has come into Nigeria today via FinTech firms...

Tobi: Yeah.

Adedayo: When you compare it to the total capital that has come into the country, it's actually sizable...

Tobi: Yeah.

Adedayo: Actually very very sizable. Then you start thinking to yourself, are there maybe special areas of the economy that could easily come up, with little government support, that doesn't really need a lot of government support, that could easily go on and even be competitive globally and do fantastic job? In what areas can you think of that you have a lot of Nigerian people (professionals) go outside the country and actually be competitive? It's mainly in the service sector. I would argue that you would find a manufacturing plant manager or a factory manager in Nigeria that will beat someone in Bangladesh or in Vietnam but you can have a Nigerian software developer competing with someone in Europe. You have Nigeria software developers going to conferences and presenting ideas and talks and they are widely followed. And so one of the ways that I think about it is, some of the barriers we have in...that I feel like it will be very difficult for us to overcome...And the kind of effort we will need on the part of government to actually be committed to it, to actually have the knowledge to drive those changes and the resources to do that. A lot of that [activity], in the service economy, many people are already doing it without the government. The fintech firms we have and the companies investing in them, they are not investing in them because of government support. It's because they've discovered that even within this dysfunctional system we have in Nigeria, some people have managed to create an ecosystem that, at least, [make] things work. We can say regulation affects them to a very considerable extent. We know what this bike riding companies...

Tobi: Ride-hailing...

Adedayo: Ride-hailing companies are facing in Lagos for instance, which is also one of the issues we have with government in that sector. But, really, in terms of say, Andela, for instance... what has really been in terms of regulation? Some of these sectors have been able to avoid...

Tobi: The prying eyes...

Adedayo: Of government, for instance and because of that they've been able to attract a lot of investment into them and these companies are investing into them because (why?) Andela does not need road infrastructure that a processing company

will need, for instance. I don't need to start moving goods from the port to anywhere. What I just need is probably reliable power. I need good internet and to an extent, we say we have terrible internet. We actually have terrible internet. Broadband penetration is very very weak in Nigeria. We can all attest to that but to an extent too, things are getting better. They are building technologies for our market that actually would not make you require a lot of data usage.

I stream Netflix and it's not because you know they've dumbed down that technology to be able to accommodate the quality of [the] network that you have in developing economies and I don't know how they managed to make that happen but you find that too in terms of the productivity you have. With a laptop, a Nigerian can sit in a room and create value externally and get paid for the value they've been able to create. And what do they need? Power. Internet. Even if it's spotty, it still works to get the job done. It's different from the kind of barriers you have to scale for industrialisation. You're saying oh, there's this Bootcamp saying "oh, come and learn to be a product manager, once you acquire the skill over six months you can sell it anywhere in the world". We can't do that for manufacturing. It's definitely not easy. Manufacturing is not something that you can open Google and type on YouTube "how to design a website" and in two weeks, you're already making money from helping people to create a website or do some of the things. So really is that is really the idea around my bias for services. I have a very big bias for services and it's because I want something that will not require a lot of government effort. Because I do not trust the government. But because with the kind of people we have, it's still a sector we can explore, that even without government, even without a lot of infrastructure investment we can still make magic happen. And we've been making that happen because I was reading a report...you know, hundreds of millions of dollars are coming into the country in investment just for tech. Andela that is just developing local talent and exporting it also has attracted hundreds of millions of dollars and the government is not able to attract [investments]. What they say is "oh, we have a memorandum of understanding" which eventually does not...

Tobi: Translate into real investment.

Adedayo: Translate into actual investment and these service companies are able to do that with the kind of investment government cannot even attract to develop certain sectors or certain industries. So for me. I feel like on the part of government, industrialisation requires a lot of effort. They need to not just invest in human capital but power, road infrastructure, rail, and all those things; not to now talk about the local value chain that would support industrialisation (which is a different thing entirely on its own). Do we have it? Do we have the knowledge for that? I don't think we have it. Is it easy to acquire the knowledge? It's not so easy compared to some of the options we have in services. So that is really my bias.

Tobi: Interesting but I would like to push back.

Laughs

I think I'm doing a lot of pushing back in this exchange. So I'll like to push back on that a bit.

Adedayo: Okay.

Tobi: Now, isn't manufacturing, industrialisation a necessary process for you to hone your skills in making things? It's like Michael Dobbs said that development is not a leapfrog, it's actually a hard slog. You have to do go through the grinder, because you mentioned FinTech and, at least, to me, it does not still yet feel like the investments are coming primarily because of the potential. You mentioned Andela, Andela is having to change its business model and Jumia is actually unwinding in several markets across the continent.

So wouldn't it be a case of, eventually, a lot of this hot money comes in and no real returns and then the investment dries up over time. So I see manufacturing as a way for the local workforce to actually develop your skill at making things because I don't really see any country in the world - you mentioned the case of India that has really concentrated on services but they still have a struggling economy.

Adedayo: Yeah.

Tobi: They are not even close to China in terms of economic productivity and value. I haven't really seen (in) a country that failed at manufacturing but prospered in services. So for me, that is why I think that however tough it is, manufacturing still represents a necessary step. You know, I don't think a company like Huawei or Xiaomi in China will be making globally competitive phones today if the Chinese economy didn't start with basic assembly. And even in China today, you find out that services is bigger than manufacturing. And china is usually our go-to example when we talk about manufacturing. So is it really possible for an economy to leapfrog into services without really learning to do the basic, hard but necessary things? That's my push back.

Adedayo: I don't think it's possible but I'm working with the institutions we have. Like Economists would say - I've held the government constant. I do not have any trust in the current government or with the kind of structure we have in Nigeria, how difficult it is to get smart people into government, and let them stay that they will be able to come up with a strategy that will work for Nigeria. Because I believe industrialisation is deliberate. To the extent that industrialisation is a deliberate policy by government, and that it takes a lot of hard work, then we must be ready to do it. The question is do we have the capacity to do it? Do we have people who are willing to do it? I don't think we do and basically my argument is while we keep waiting for that miracle to happen in Aso Rock or in Abuja or in government offices; that they get hiring right, that they figure out a way to come up with policies, that they'll figure out a way to get the buy-in of private investors; there is something else that can be happening while government is still trying to get the acts right. In waiting for them to get their acts right, we can't be stuck forever. Now you can talk about the little gains that will accrue from focusing on services and don't forget what I'm even actually advocating for is not even government involvement in services. It's by private enterprise just doing that in spite of whatever it is government is doing to, at least, bring some form of benefits.

Yeah, I get the sense you're making in terms of having... I mean even in terms of competition. In the end, [the] average software developer in the US maybe works with Google. Google has been operating for decades. We know the knowledge they've been able to acquire, [and] how they've been able to transfer that. So it's perfectly understandable when I can say, in terms of the sophistication of the market we have currently, it's not there. You can't expect software developers who have worked on projects for decades, you can't compare them or software managers you've had with those people directing projects compared to the Nigerian market which is still at its early phase really. So the kind of accumulated knowledge that has benefited maybe software developers in the US given the structure of the environment they have is obviously absent in Nigeria. And the problem we have now is we are not even retaining those talents locally because it's by... like you said, just like by building things in manufacturing. Also in technology, it's by building things. It's by building things that you also improve and a lot of Nigerians in tech, they've not had that kind of exposure or knowledge from having a very good industry from the start. Don't forget this entire thing we've seen in this market has not been up to a decade. It's not been actually been up to a decade, so we should be a bit more...erm

Tobi:  Optimistic.

Adedayo: No, not optimistic. We should not forget that in making our comparisons. We've been doing this industrialisation thing since when? Ajaokuta has been since when?

Laughs

No, I'm going to mention it. Government is pursuing industrialisation, they say "oh, we need steel, right?"

Tobi: Ajaokuta is not a good example of anything.

Adedayo: It's not a good example of anything because that is one thing that should make you see the folly of the government we have and in thinking about industrialisation, we should think in terms of what government have been doing over the years and what they will still continue to do. One of the loans they're collecting now, don't they plan to use it to fund the same Ajaokuta?

Tobi: The same moribund projects.

Adedayo: Exactly. Then you start thinking what is really the plan for industrialisation? So I think we should be a bit... not be too harsh on what we've seen in that area in terms of local technology or whatever. Everything that has exploded has been within a decade.

Tobi: Now, the question is - couldn't it be that we're struggling with industrialisation for political reasons, not because we can't really do industrialisation if we want to? Because when we talk about services even the way that some of these advanced economies are profiting from services... okay, now, one of the arguments that you see toss around these days is the so-called creative industries - Nollywood (and Burna Boy) is blowing up all over the world and the so-called economic potentials of that. I mean, when people talk about Nollywood, one of my favourite examples, when I talk about this with friends, is that… Logan, for example - The movie Logan - by Hollywood standards is considered low budget at, maybe 60 million, [a] 50-60 million dollar project but you still find that that project supported 15,000 jobs. I'm still waiting for a Nigerian movie, even with that budget, that would have that much economic effect. Because there's an entire value chain of people that build sets, software managers, equipment makers and you find that the way we tell our stories, the ambition - they don't really allow for that much creativity enough for the so-called creative industry to have and to thrive. Music is the same. The new rave in town is for every artist to have their own XYZ Live in December. But Cardi B was just in Nigeria recently and even the way everything was managed, you'll see that there's still a bit of difference. The stage manager has to be brought in from abroad, how (the stage) the set had to be constructed. You go to a typical Nigerian show and the artist come on stage to mime

Adedayo: Yes.

Tobi: Basically. The set is... the sound is...

Adedayo: It's terrible.

Tobi: It's terrible...

Adedayo: Happens all the time.

Tobi: If we really want to benefit from services, are we not going to run into the same issue of what Feyi Fawehinmi as called our anyhowness? Are we not going to be treading the same path? Is service really going to...I'm not being harsh, I hope I'm not, anyway?

Adedayo: You've made a valid point. I feel like a lot of things are a actually changing. I am someone who is very pessimistic about the future of Nigeria and that's not going to change but even in how gloomy everything is, there are still some things I'm seeing in some sectors that I can say I'm optimistic about certain sectors. The creative sector, like you rightly mentioned, is one of them. I know things are imperfect, yeah, I go to all these shows and I see all the problems they have. But one thing I've noticed right now is, even when you have all these very poor setups even in Nollywood and music and everything, there's a new generation of Nigerians, I don't know if you've noticed it? There is a new generation of Nigerians trying to do things differently and, for me, I'm always very careful about the quality of things, the aesthetics and everything. Nigerians really do not care about it. And it was when I was growing up; if you build a cabinet for my mum, my mum will tell you this is not aligned. If you build a structure, a home or a part of a home and you see that it's not straight, my mum will complain "this thing is not straight" and I picked that up and that is also reflected in the output we see all over Nigeria, even in workplaces. Usually what I always tell my analysts is "don't you have eyes for good things or something?" Yeah. Because I'm like there are some things you see that you should know this is bad and you should correct and I feel like that is what we've seen in almost every area of Nigeria. Nigerians are attached to poor quality things maybe because they don't know better but not enough people demand better as well. But what I have recently noticed is, there is really a new generation of Nigerians changing the narrative in each of those sectors even within music. There are new breeds who are more deliberate about their act. For instance, Olamide can decide to mime...mime all his shows but I know Lady Donli doesn't mime.

Tobi: Who is Lady Donli?

Adedayo: She's [Zainab Donli] one of the new kids on the block and I think she's just 23 years old.

Tobi: Oh.

Adedayo: So she curates...

Tobi: Apologies to her by the way.

Adedayo: She curates an entire experience and a lot of these kids (also) you could say maybe many are not schooled in Nigeria and some have had exposure to see what happened abroad and they are bringing it back home. And what you find is, later on, you'll see the Nigerian consumer, once they see that there is an option, that there's a new breed of people who are more deliberate about their craft ( you know Simi, you know Adekunle Gold - those ones are very very deliberate about the experiences they curate for people), then you start to see changes. It's not going to happen at once but over time it is going to change. In fashion also, you see a lot of young Nigerian creatives coming up with different kinds of designs. Of course, they're still victims of their environment but in terms of applying their resource into doing things better, I feel like there is a new breed of Nigerians who are more deliberate about what they're doing, creating good quality products in the service economy. I see that in the service economy more than anywhere else in Nigeria. I mean, that movement that I'm seeing, I see it more in services than any other sector in Nigeria. And your point about politics and industrialisation, I totally agree that it is not really a case of it can't be done, it's a case of...like I've said I've held that this government going to be useless, right? I've held that constant and it is on that basis I'm discussing my services bias.

Tobi: I hope they don't come for you for those views.

Adedayo: So basically what I'm saying is "yes, I agree with you". Then if we can say under ideal situations...if we're talking of the ideal now, say, we have a government that works, and they say "oh, industrialisation, what should we do? Should Nigeria be doing industrialisation?" I'll say "yes." Or you're saying, oh, should we bring managers from Asia to come and hold positions in Nigeria, sort of, to like manage everything. I'm totally going to agree with you but currently, like I said, I have a long-term...I have a long-term sell on Nigeria and it's getting worse by the day. My recommendation is "sell" for Nigeria. So, government, I have absolutely no trust. Not just even in government, because we tend to think of institutions as all these four-year, we tend to concentrate on Buhari or Jonathan but even government institutions are not in four-year cycles. It's still the same staff that are in those ministries over decades, over periods of time. And we need to be a bit more deliberate about improving that quality fundamentally and not just focus on saying "we want Kingsley Moghalu to become president or we want Mrs Obi to be the president because even if she becomes the president she's still going to be a victim of the institutions she inherits. So I'm not really looking in the sense of not just in terms of the political cycles but also in terms of the core of our workforce in the public sector.

Tobi: Interesting. Interesting. So recently, I think on Twitter, there was this issue where a bunch of Nigerians are calling for some form of dictatorship. That democracy...

Adedayo: We need a strong man.

Tobi: [That] democracy isn't really working and you mentioned the issue of political cycles, is that really a problem? As in, is our current democratic structure a barrier in the way of serious long-term planning?

Adedayo: I don't think it's a barrier. Because Nigerians don't want the lazy way out, we talk about economic restructuring... this debate that has been going on for forever and I'm thinking even if you have a strong man, most of the challenges you have in Nigeria you'll still continue to have them.

Tobi: We currently have a strong man.

Laughs

Adedayo: Oh, wow! That is true. So you're still going to have it [those problems] because economics is not something you can will into happening. You can't will growth or development no matter how...if you're the strongest man on earth...and that is why even... they will say even Asia, China became a bit more liberal on their way to economic development.

Tobi: Definitely.

Adedayo: So I believe most of the consensus we need to reach...Nigeria is very heterogeneous (we all know) and at every point in time, there are always conflicting actors when we need to make very critical decisions maybe on the future of the country. And I feel like that is the stage we need to arrive at in terms of cooperation within ourselves, knowing how to organise ourselves better and I don't think in terms of organisation, having a military man or a strong man who is going to is going to rule for 50 years is going to do it. In Africa, we are not exactly alien to that concept. We've had strong men lead so many countries for decades in Africa and even in those systems, you can see the level of dysfunction present. If you're a strong man or whatever it is you are you still need quality people around you. China with whatever it is (political system) they're practicing, it was different ideas that led to the chain of events that brought about their industrialisation and development. It's not necessarily because of the strong man.

If you have a strong man who is smart enough to realise that, oh, he needs smart hands in ministries, he needs to pursue liberal ideas or very good ideas and [he] gives them the free reign to kind of make the decisions they want to make; then it's a different case. Obasanjo was considered a strong man too within the context of Nigeria's history and still, the difference between his government and what we've seen lately is that...he necessarily didn't have the ideas, his experiences couldn't even have given him the ideas he implemented, but he was able to, at least, assemble people who were promising and who could come up with things like pension reforms and all sorts of reforms that they pursued under the administration. Some would argue, maybe Ayo Sogunro... would argue that the Nigerian constitution itself is not something that means that every president that emerges will be a strong man, right?

Tobi: Yeah.

Adedayo: And the kind of arrangement we have in terms of our political system means, even if you have someone who is not a military person per se, when he becomes president he has a lot of powers...

Tobi: Yeah...

Adedayo: I think that one is there, but, really it's in terms of the kind of ideas we eventually pursue. And in terms of making those kinds of ideas happen, I feel like democracy offers the best path.

Because having strong men is... umm, the time it takes to make changes could take...

Look at Zimbabwe now, this guy was there for decades, meanwhile they could have experimented over that period of time that that man was there pursuing the same, you know... imposing the same level of ideas and all those things; suppressing voices and new ideas. I feel like under democracy there are more lessons to learn along the way, you are able to do experiments more quickly, you are able to change ideas more quickly than you would have under a dictatorship or anything else. I am disgusted at the views that what we need is a strong man. The history of Africa is replete with all these strong men... who have not made anything happen. So I don't think that is a factor to really doing anything.

Tobi: But, okay, to play... I'm not exactly playing the devil's advocate here but there's a kind of nuance in that argument that I would like to explore.

Yes, ideas. The entire reason we are having this conversation is because of ideas. Ideas matter, a lot. Ideas are what determines the kind of change a society will make but we also know that ideas do better under a good leader, someone like Park Chung-hee in South Korea or Lee Kuan Yew in Singapore. It's a bit difficult to imagine the history of those countries without the kind of deliberate, determined and admittedly brilliant leadership that those guys really implemented. Deng Xiaoping in China is also a good example of that. Is it just the fact that we have low-quality strong men in Africa, who are...who don't really know...they are just strong on paper but they don't really [know much]. Because you mentioned Zimbabwe, you have the current guy I've forgotten his name now (a bit difficult to pronounce) [Emmerson Mnangagwa]; who was with Mugabe for those years and now Mugabe is dead, you're trying to change direction and then you wonder that - okay, what was it that kept sustaining the equilibrium that was under Mugabe if there were people even within the party structure who felt they were going in the wrong direction? You can't help but conclude that it is the sheer force of the man at the helm itself driving that process because at the root of it you may have people actually competing.

And Nigeria, Obasanjo... you mentioned Obasanjo, there's also a very good example there where, when he was about to leave he privatised the refineries and I think one of the buyers was actually Dangote. And one of the first things the next administration did on getting to power (from the same party, someone whom Obasanjo actually mentored and basically ushered into power)...one of the first things he did was to rollback that particular action and then  years later, today, the entire country is waiting for a Dangote refinery - that could have happened years ago.

Adedayo: Absolutely

Tobi: So there is also the question of continuity. So is it just a question of we have low-quality strong men in Africa and it's not just that people have a death wish with tyranny and dictatorship?

Adedayo: Of course with all the evidence we've had, with insights, we can say we have poor quality strong men. But I think I agree with your general idea on the fact that even when you have a democratic system you need someone who can give people something to buy into and who can make things happen (let me just use that phrase). Someone who can make things happen like they did in Korea, like they did in China, like they did in Singapore. Now it's not necessarily because of the fact that they used every power available to them, although some use it in some cases. Sometimes it's really about the kind of ideas they are pursuing and that is why these men you mentioned are probably unicorns because I'm sure even in the history of China...China and India, I was reading their history, [they used to be] one of the prosperous economies of...those days.

Tobi: Of the past, yes.

Adedayo: And what happened between then and now when they're even still considered as emerging economies. They've had a lot of leaders even along that structure that they've been practising and it was someone that just had a different idea of how things should be done and that was what made the difference. It was not necessarily the fact that the structure remarkably changed. I mean, if you look at structure vis-a-vis the ideas, you would see that the ideas have evolved more than the structures they had in those places and I think that is really the difference. Also in terms of party system - parties are also institutions, right?

Tobi: Yes.

Adedayo: And in Nigeria it's still the same problem. So in, say you have the party in China or the party in Singapore or anything, they tend to be more ideological in terms of having the same ideals - they value the same thing. In Nigeria, you'll see socialists in PDP, capitalists in PDP and someone who doesn't even know what he wants to do. So there's really no ideas on the kind of things they should promote. I feel everything still goes back to the ideas of the leaders we have, not necessarily structures. If you have a bad structure, someone with ideas can make things even better, even whilst also improving the structure of what you have on ground. In terms of institutions, that plays a major role too and we need to start asking ourselves questions - how can we build very good institutions? Not just even for government institution or private institutions, even to the political parties. I feel like, for me, we've had too many bad strong leadership not just even in Africa...

Tobi: All over the world, yes.

Adedayo: To the extent that those you mentioned are unicorns, basically. And the people who have been very radical in what they have been able to [achieve] in terms of their ideas and what they've been able to pursue and the kind of partnerships and cooperation they [have] sought to make things happen within their country. The question now is, if you get it wrong, how long does it take to change course?

That is one of the things we probably didn't explore and I will like to see if they explored that in the case of China and India given the rapid progress they had early on and the later slump they had. Was it that there was a mistake in terms of leadership, and given the structure of the political system they had, that was perpetuated for a long period of time until they finally had maybe someone come out and make very bold improvements?

Tobi: I think from what I've read along those lines, I think it's supports your position in a way. I mean, China for example, part of the reasons for the slump in economic growth in China (part of the reasons they had nearly a thousand years of regress) was because there was no scientific revolution. The scientific revolution that happened in Europe which ultimately culminated in The Enlightenment totally missed China and a bunch of the world. So, yeah, ideas are important like you said. So I guess we know what we're doing here then.

Laughs

Tobi: (So) on that note, I would like to ask you and you have 50 seconds to answer this.

Adedayo: laughs

Tobi: What is the one idea, currently, that you would like to see spread rapidly in Nigeria?

Adedayo: One idea. I think the idea is just that things can change and I'll give you examples. You know most times, we say "that won't work" or "this won't work". When you hear someone talk about something, "this won't work, it won't work", so you discard it. You don't even explore it. Being on Twitter has exposed me to a lot of movements that I've seen and initially, you'll be like "why is this person doing this thing, it doesn't make any sense, it's not going to work" and eventually we discover that it takes some time but eventually it works. Sometimes it works immediately but not every time. And that goes with activism, even as terrible as Nigeria is, we've seen small movements who have made changes. So I would say the biggest idea I would probably like to promote is for Nigerians to believe things can work, [and] that ties into demanding for something better really. Because if women are doing the market march, don't touch women, no catcalls and you see that there was a lot of resistance when they went and subsequent visits into the market, people started seeing that there was actually a difference and that is very very key. Basically they say [in] Nigeria we have low-quality people. Editi wrote an article around "manage it like that". We need to think that things can work, things can change, so we should start demanding for better-quality things - from politicians, from businessmen. I feel like that is one of the ways we can really improve our outcomes. If Nigerians believe or [have] ideas that things can change...this is not how or if it is done this way, it can always be done better. That things can change. I think that's the biggest thing I can think of. Because I feel like the multiplier effect in terms of the relationships we have, even with the micro relationships; demanding for better quality from your Tailor or from Carpenters.

You'll discover that Nigeria doesn't even have Tailors...Benin Republic Tailors, Ghanaian Tailors are actually better than Nigerian Tailors. Even in carpentry, the works you see done by all these people from other countries, they actually do it better. Then you start asking what kind of culture do we have? It's a culture where we don't test things, where we don't question things, especially when they're in print. Be it in the constitution, even though it is wrong to be in the constitution in the first place, that is why our parents will see broadcast on WhatsApp [and] because they've not been taught to question things or to challenge things in print or to challenge ideas, they will see it: use salt to bath your kids to prevent them from getting ebola and they start broadcasting it to everybody without questioning it, without testing it. So I think that is really the idea I have in terms of [ideas] that can really have a massive impact on the populace.

Tobi: Some Nigerians will tell you they believed in change in 2015.

Adedayo: That is not the kind of change I'm talking about. Abeg!

Laughs

This is not believing in a leader to bring about magic. This is in our relationships to ask for better governance. Some believe Nigerians are not, you know, they don't do a lot of activism. We all tracked what happened in Hong Kong...

I think we have a lot of capitalists on paper but when you go out their business they become socialist. - AB

Tobi: Yeah.

Adedayo: And some [people] will feel like "Nigerians are not..." and, for me, I feel like maybe it's because of the culture. We've been taught not to question things from authority. You have to just obey and do it the way it is if you don't want problems and I feel like that's a different kind of thing to explore that would really open a lot of minds into things we can do differently and maybe we could start seeing the benefits. When you tell a Nigerian [or] some Nigerians that "oh, this person collects... his earnings from government job cannot support his living" and some Nigerians will say: ibi t'eyan tin se na n'eyan tin je. Yoruba people will say: from where you're working that you'll derive benefits. But should you be collecting bribes? Everything is just normalised because it's the way it's done anyway, so we'll continue doing it that way. So I feel like that is what really needs to change, that concept of "manage it like that" needs to really change overall.

Tobi: Do we need more capitalism? I mean, do we need more capitalist evangelist?

Adedayo: I think we have a lot of capitalists on paper but when you go out their business they become socialist. Even when you see a lot of Nigerian capitalist that have enjoyed free enterprise, that [free enterprise] has supported their businesses and the lack of protectionism in a particular industry actually facilitated their entry into that sector or the kind of knowledge they've been able to acquire, you'll discover that, maybe, when they go outside the industry or when they are talking about broader issues, they become...you know, more...

Tobi: That instinct...

Adedayo: That instinct kicks in automatically. So I won't say we need a lot of capitalists. I believe we have a lot of capitalist in Nigeria already.

Tobi: We need more capitalists in practice rather than on paper.

Adedayo: We need more, maybe, more people to imbibe capitalist ideas rather than just say... Dangote will say he's a capitalist. Is he not a capitalist?

Tobi: I don't know.

Laughs

Adedayo: He'll say "private enterprise, I'm doing private enterprise even if it's government patronage...

Tobi: Really...

Adedayo: That has supported everything that I'm doing". You people don't want to believe that [he's capalist] and would always seek government protection in everything he's doing but he wants the free reign to do what he's doing. So we are capitalists when it's convenient to be.

So, yeah, I think it's the ideas we need to spread. Capitalist ideas need to spread and they need to be imbibed rather than people just saying we need more private people. We have a lot of private people doing private stuff in Nigeria.

Tobi: I also think a lot of the arguments we have should be framed in a localised manner because... obviously because of history, we automatically associate capitalist ideas with imperialism, with colonialism - something foreign. So I think a lot of the advocacy and the arguments...

Adedayo: That we have to own it.

Tobi: Yes. We have to own it.

Adedayo: That ownership is not there.

Tobi: Yes.

Adedayo: Absolutely.

Tobi: Thank you very much, Adedayo.

Adedayo: Thanks for having me.

Tobi: It's...

Adedayo: It's super exciting.

Tobi: Yeah. Thank you very much.

Adedayo: Thank you.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.ideasuntrapped.com

I started these conversation series to further the underlying philosophy of this publication - helping the spread of good rival ideas. I want to speak to brilliant people with experience, who also have interesting things to say about Nigeria's political economy and society in general. In the first episode, I spoke with Affiong Williams - Founder/CEO of Reelfruit. I learned a lot from Affi and it was hard to condense our conversation into the bits that made the cut. Her take on economic complexity, and how social systems and expectations can change culture are quite refreshing takes. She is an advocate of epistemic humility, and she practices what she preaches. But make no mistake, she is a deep and profound thinker.

You can listen to our conversation above or read the transcript(it’s looong) below. You can also listen on Stitcher here. I owe an immeasurable amount of gratitude to Quadbee, who is the producer and editor of these series.

TRANSCRIPT

Tobi: Affiong, it's nice to have you.Affiong: Thank you.Tobi: So I want to start with human capital...because, there was something you said on Twitter a while back and I think I ran a poll on that idea, that some African countries do have a lot more human capital than Nigeria. So can you try to unpack what you mean by that because, obviously, when you look at the data you can see it differently sometimes but as an entrepreneur, you experience human capital daily - so can you unpack a bit of that?Affiong: This tweet you're referring to was borne out of my visit to Zimbabwe a country that was once known for quite a superior educational system and maybe good leadership under the early days of Robert Mugabe but also has been known in the last twenty years as a place where the economy has been completely topsy-turvy and they face one crisis of hyperinflation after the other etcetera. But in my visit to Harare, what I noticed was... (And I'll use the specific example), was that in the lodge we were staying where we were about thirty people. There were only three people were managing it, only three people managing in terms of cleaning, the lodge manager, maybe four or five and the cooks who would come in to make breakfast etcetera. But in terms of facilitating the entire lodge which was like ten room lodge with about like thirty guests, I would say, I've realized in Nigeria there is absolutely no way three people could manage complexities of giving people stellar, sort of warm service and as well as keep the grounds as pristine as it were and it got me thinking about this learning that I've uncovered in my years of just operating as an entrepreneur but also reading about development that a lot of education is in firms not in schools. And even though Zimbabwe has had a history of good education like Nigeria...we want to brag has had in the past, the idea is that the economy was way more diversified and specialized in things like tourism so you found that people are much more equipped to handle...to be more productive than in countries where there's not been any specialization or the economies are less diversified.So, that, for me was sort of the link that the diversification of an economy makes human beings more productive, much more than 1) the educational sector, and 2) that the inverse is true. The less diversified a country is in terms of its learnings, what it can do, what it's good at, the less productive people are. If you look at Zimbabwe, a hotel manager there could probably manage the equivalent of a mid-sized hotel in Nigeria or a large hotel in Nigeria whereas the reverse will not be true. A hotel manager in Nigeria is just not quipped to do the same in another country and offer the same type of service and Zim is known for its stellar...the development of its tourist industry and actually it receives tourists from across the world. So the industry has had to become more competitive and be able to sell tourism from across the world; whereas Nigeria has not, so you can see the quality of our hotel etcetera just being under par.

People may dispute this but I posit that the more complex and the more diversified your economy is, the more people learn and get to know. - AW

And it is easy to make this comparisons with countries like America which is a first world nation with all the resources in the world but if you look at more comparable countries like Kenya or Ghana, when you compare sectors like...for instance, and I'll use Ghana as an example - food processing - because Ghana has learnt to build this industry for export and self-diversified companies, you find that a factory manager in Ghana will be better on average than a factory manager in Nigeria. And people may dispute this but I posit that the more complex and the more diversified your economy is, the more people learn and get to know. You look at the banks in Nigeria and I’ll use India as an example, a bank manager in India, a middle manager can do mergers and acquisitions. That's because the economy allows for it. The economy is diversified enough where companies are buying each other up, and that skill and that learning is necessary for the competitiveness and growth of that bank. In Nigeria, people who've been in banking for ten years still push paper and I know that as an entrepreneur who have bank relationship managers working for me, and they haven't even learnt how to do that seamlessly. Every time you want to do some complex different deal, there's reporting to head office, there's all these issues that even a middle manager someone with ten years [of] experience in the bank cannot solve at that level. And that speaks to the diversification and complexity of the economy, we're simply not doing mergers and acquisition at a rate in Nigeria that can forces that learning on everybody. So those people are less productive than if you compare them with an Indian banker or... not to talk of an American banker or even a South African bank where you have such a diversified and sophisticated economy. So, for me, human capital is very much driven by the firms in the country and the make-up of firms in the country and you find that in Nigeria, it stagnates because our companies were not getting new industries really coming in to improve and increase that learning.And Nigerians love to talk up how smart and how they do well abroad and how given the right tools etc., and that's true. But that's also a factor of what those countries offer. it's not really inherent to being Nigerian or being here because you find that that logic almost collapses...Tobi: There's a place premium to it.Affiong: Exactly. So it's where you are that unearths that potential versus inherently in you. And you see that with human capital deficiencies in Nigeria; and I didn't have that small country, smaller GDP perspective until I went to Zim and I was like, “wow!”, these people by virtue of having a more diversified economy know more and could produce more in their industries and businesses. Somebody told me something that in India, even on the factory floor, what one person does in India you need three people to do it here and I think that's telling. That the capacity of one person to solve and make decisions around three processes increased over there just because the economy demands that.Tobi: It's an interesting point you're making because a lot of the problems we talk about in development centers on productivity. And firms have to be productive for us to be able to call an economy developing so to speak. A lot of the effect, the aggregate effects that gets measured transmits out of firms...but you made two points that I want us to speculate on a bit.Affiong: Okay.Tobi: One is economic complexity. And from I think Ricardo Hausmann and co., they actually say that economic complexity is a better predictor...Affiong: Yeah.Tobi: Of development...Affiong: Yeah.Tobi: But there is this other school of development that says you have to specialize. Oh, you have to...Affiong: Competitive advantage, yes.Tobi: Yeah, you have to find your comparative advantage, you have to, oh, do agriculture or its manufacturing or whatever [else]. But you are saying from experience that complexity actually works. So how do we get policymakers to absorb that message? How do you craft policy for complexity, really?Affiong: That's a great question. I feel like I should preface by saying I'm by no means an economist, I just enjoy talking about and thinking about it. This I could do for free. I geek out on development especially and firm productivity and things like that. But the schools of thought are... from what I've read and understand, I think...the way I see it and please for the audience this is a very layman’s way of thinking...that when you look at something like economic complexity and doing different things and countries that are successful do things they're not previously good at. It's somewhat walking backwards, somewhat looking at developed economies and saying, "well, they're very diverse in their output", but they also started somewhere and built up. So I do think there is ...comparative advantage is almost like a first-level sort of step for policymakers to begin to say "well, where should we deploy resources and deploy thinking and deploy attention to". It's easier to sort of start with what you have and maybe the comparison to countries that have really been good at starting with what they have, that have been able to create what they didn't have is the wrong comparison in terms of policy because if you look at America or Asia or all these countries that are highly specialized, are highly diverse, they all started somewhere. Compare that to a country like Nigeria where we haven't yet really kicked off industrialization in anywhere. It may be too big a job to say start crafting policy for diversity. I would say that the negatives of focusing on comparative advantage is what you see in Nigeria - ban, protect a small pie, we talked about, oh, agriculture is our thing so let's ban import because that's what we have comparative advantage in production in.

So it is a dangerous hill to die on as it were if you are not able to really multiply your comparative advantage. What you end up doing is saying, “oh this is a small pie let's protect it”, and all the policies are somewhat skewed [against] actually widening the pie. So my thinking is that there's still room for countries like Nigeria to focus on their comparative advantage. So if I'm looking at, like, an example is petroleum or oil and gas. There is still billions of dollars in unlocked investment in oil and gas that is trapped by bad policy. So it's saying…well, we produce oil and gas but we can still derive a lot more value from that for long as shale and all these renewables don't stand in the way. Although I think despite that, there's still room for investment. On agriculture - if you're saying you're the largest grower of cassava in the world. There's still room to be hyper productive at growing cassava which will create jobs. We're not even talking about processing, just producing cassava that can be used for different resources, producing enough high-quality cassava to export, all sorts of things. So there is room for policy attention to go to actually developing your comparative advantage and I think that then spurs you to start getting into more complex policy around say wanting to be the financial services capital of Africa, which you don't have skills to do that yet. But yes, you can sort of engineer that through policy. That's probably a harder reach for government and people. We're still stuck on what we're doing but I don't think that it's bad to focus on what you're good at. But I do think that there is room to unearth a lot of value in that. So yeah.Tobi: Okay. So, I worry about timing though, because obviously when we talk about comparative advantages, the go-to example is always Asia. East Asia. South Korea, Taiwan, Japan, Vietnam now. But what I mean about timing, which to me is a bit of an argument in favour of freer markets…(I don't want to say free markets because that attracts a lot of angry letters)... is that the rules of global trade has changed a lot. Asia industrialized at the time when there were a lot of permissiveness in trade and trade regimes around the world today has changed. And also if we want to do comparative advantage now, however bad it is [the economy], some companies here have built-in competencies, learning over years, you will be sort of redirecting resources and human capital away from those people to few chosen sectors. So I'm wondering will that be a way to go. Can we really do comparative advantage? Has the time not passed?Affiong: From my understanding or from my perception is that the things we're talking about in terms of comparative advantage, the sectors or industries, (they) are still very largely agrarian sector. They're sectors that one would assume human capital at the lowest level can absorb [a lot more capacity] versus a large redirection of specialized skills to actually play in the sector. So if you look at agriculture for instance, I'll take agric because we are largely an agrarian society and that's where fifty percent of jobs are created. Increasing agriculture input is not necessarily... yes there is huge technological, in terms of machinery component to it but a lot of it is fertilizer and if you look at Asia, a lot of it was people who were not doing anything getting on the farm. We have a lot of people who are not doing anything who can get on the farms and be a little bit more productive. We're not talking about people who are going to go on to start agribusinesses and do those kinds of things. But if we focus on that comparative advantage, I think we can drive up human capital that would otherwise not be doing anything and I think that that might be a benefit. I read the book how Asia works and sort of household farming, going into smallholder farming with people farming on their own, in their homes, outside their lots and then moving them into some sort of small holder...being a little bit more productive than what they were doing...which puts them into jobs and make them employed. I think that opportunity may still exist and I think when you start driving up that kind of productivity you hopefully can attract more human capital from outside to sort of buildup on that. Then start the processing for factories, do more complex manufacturing and things like that. I think there is still a window of time and maybe Nigeria's population has a lot to do with it as well that for domestic consumption there's huge opportunity to make the price of every commodity cheaper by growing more so that more people consume it and increase consumption. That could be some sort of out [for] job creation. I'm not a big fan of produce what you consume but I think in my view, consumption of almost every sort of product is low compared to even African averages and that's because the price is high and bringing these prices down by increasing productivity would help drive local demand of them and hopefully that will then bring more people into employment, make them more productive that way. I hope that theory is... sort of makes sense in a way.LaughsYeah, I'm making a case for increased…focusing on comparative advantage and the impact of that on really using a level of docile, docile is not the right word, but stagnated human capital which are people who are not employed, can't do much but if you've got them farming more, they're generally becoming more productive. Yeah, that's my thinking around that.Tobi: Alright, let's talk about perception a bit because you mentioned earlier that I don't know maybe because of our size we think “oh, Nigeria is awesome, we have this huge stock of human capital and any day now we are going to zoom ahead”...Affiong: Yeah, unleash it and take our rightful place on the African continent.Tobi: What's the biggest perception difference you've observed in the business landscape in Nigeria. What do you think Nigerian business owners, entrepreneurs or professionals are mostly wrong about that they think they are right about?Affiong: That's a very very good question. I think its human nature for everybody to overrate our capacity, that is what we do. We are not logical about what we can realistically achieve. Studies, everything, proves this. But in Nigeria, what I think a lot of entrepreneurs are wrong about is that idea that there's something innate in the capacity of Nigerians to sort of make a plan or make things happen. I think we are very wrong about a lot of times why firms or businesses fail in Nigeria and a lot of it is around lack of structure. I mean, yes, there are market issues and there are lots of issues but I'm going to focus on this - the need to sort of build in systems and processes vis-a-vis firm failure and I think a lot of people, a lot of entrepreneurs think that kind of disorder or not building that order within companies is not necessary to their success because Nigeria is a very disorderly place and things don't happen. But I think a lot of firms damn it and die when there are no systems built-in businesses were basically - capacity and decision-making (etc.) is filtered down and processes are filtered down from the top to the bottom. So you find in a lot of businesses [that] the CEO knows a lot and owns a lot but there is no(t) emphasis on management and middle management being equally (skilled up) upskilled, being able to make decision, being able to do stuff… so there's literally only very few resources being aimed at growing a business - which is the CEO, usually his or her networks and things like that versus upskilling the management team to be growth led.There is this idea that systems and processes don't matter but i think they contribute. I don't have empirical evidence to prove it but I think they contribute more to the failure of businesses than we give credit to. Yes, market realities are real but it's a slower way to grow a business if you start looking at...

There [are] different stages of growth in a business. You don't need a full management team in day one but when you need that and that system is not put in play, I think you're already regressing as a business and you just don't know it. Then things start to unravel and you point fingers at the market or the economy or you point fingers at competition or import etc. whereas there wasn't that sort of universal firm learning that comes from everybody - [having] more people being involved in the growth and capacity of the business. And you see businesses at all sizes where there's a disproportionate amount of the responsibility of the business to grow on one person versus the entire firm. That is also [a] lack of systems and processes (and making everybody's job at a particular level to see the business grow from their departmental perspective) that's missing and I think it leads to regression of businesses. Some entrepreneurs don't [consider it important] because it's not a cost per say that come out of the business, and in fact the cost is hiring (these) people to do it, [so] it's not measured as a real or a lack thereof of a strong team and processes in the business. It’s not measured as importantly as it should in a business. That’s something I think we are all still very wrong about. Yeah.Tobi: I like where you went with that. So let's talk about management a bit.Affiong: Yeah.

Tobi: There was this study I read, and I'll try and put up links for context, by I think John Van Reneen and Nicholas Bloom. Their argument is that management also determines the wealth of nations, that is, how firms are managed is an underrated factor. In fact, there was another study where they found that management is a better predictor of a firm's success than every other factor, even technology. But obviously here, management is something we don't really talk about as such. It is endogenous. So what's your experience been like with other business owners, how do we improve management and how do we increase our awareness in that area?Affiong: That's very very interesting, and I think quite a study to bring up because I tend to agree with that. People will say "well, if you're in a great industry and have terrible management you'll still be successful" and I think that might be true. But it's true for very few. It’s true when you are maybe the only player, there's two of you and there is not much competition for the market. But when there's a lot more competition for a market like we're seeing in a more globalized world, the quality of the people who are in firms matter and accelerate or decelerate the growth of the company. Now, I'll use myself as a case study, I have a really strong management team, I have managerial heads in all facets of the business and all departments of the business and that has helped us grow tremendously - from a sales perspective, from being invested ready, from being able to handle numerous things at a go, from our ability to launch new products (be)cause there are just people who are responsible for getting these things done and understand it and the collective output of that means that things are done better. If we want to enter a new territory, for instance, it's not one person doing it, I have somebody from finance looking at the numbers, somebody from admin calling agents to figure of the space, my production team figuring out product integrity, my sales manager finding the stores that we're going to go in to and we can execute that in two to three months - of people putting their collective outputs together to get that done. Now, if that management team was not as strong or not as defined, it will be one person trying to be all those things and we will invariably make a poorer decision; and if we make a poorer decision, you'll either fail at that or you're operating sub-optimally, which then impacts, for me, revenue, which then impacts the signal of whether the business as legs or not.So might find that there is market, but because there is less execution capacity in your firm, you can't actually achieve that market. But what does it look like? It looks like your firm is a non-growing firm, and not doing well primarily because you alone cannot do everything and the people around the table are not equipped to actually access the market available - and then as you learn within the firm to do these things, you can replicate them much easier. So I kind of find that, tied my previous point, that decentralization of output and expectation of output and productivity obviously helps the firm grow faster, make better decisions; and those businesses are more likely to demonstrate investment readiness, demonstrate that they can scale, demonstrate better unit economics (etc.) because there's just a talent or pool of people who are equipped in each of their departments to make and optimize the decision making - make the best decision etc.

Tobi: That's interesting. You talked about processes, but I want to push on the personnel aspect of it. Obviously you have a great management team but what do you have to get right to build a great management team because, well, when you talk to people, what they say is that "oh, managerial talent is actually scarce and that it's our culture to be sloppy management wise". We're going to talk about culture in a bit, but what do you have to get right to build a great management team?Affiong: That's a fantastic question because I also struggle with that. I say “do I have a good management team because I have sort them out, and can that be devoid of a growing company?” This is, for me, one of the big things. I also find that a lot of Nigerian companies are not growing and they are sort of stagnant, sort of peaked in terms of learning. So sometimes the need or the ability for the firm to attract people and keep them and sustain them and even pay them is limited when the company is not growing. So if you're not growing as a company, can you attract people to grow the company with you which is how they learn and get better at doing well? If you're a company that's not doing a lot of things and doing more things, people's learning pretty much stagnates, right? It's like government agency…LaughsSo I'll say what are the inputs in a growing company? In a growing company people are learning more, people are learning things they've not done before, so there's a lot of external learning coming in, there's a lot of self-learning; which then becomes process because we've learned what to do. We didn't know what to do before, we've learnt it and now we’ve agreed that’s the right thing to do - sort of install it as a process and people repeat it. For me, a growing company is necessary to [not only] keep attracting really good pool of management, but also the pool of people who are curious and who are excited by growing a company. It's somewhat a chicken and egg thing. (People who are curious about doing things they've not done before.) Because that's what a growing firm is, you are learning to do stuff you've never done before. That's how you grow, and then being able to apply that curiosity in a company that is growing - so that they are learning to do things they've not done before - is my idea of how you get a good managerial team or how you can bring in the talent. It is not just for today but for tomorrow when you're not doing [well]. When we started for instance, we were selling 2 products in Lagos. We're now selling 6, actually our SKU is about 16 right now in Lagos and 12 other states… Tobi: Wow.Affiong: and in over 300 stores. So the learning to be able to scale up and do that comes from the fact that we're growing but also comes from the fact that there are people who can actually achieve that successfully and those people started up not working in 12 States but have now grown to the capacity to be able do that. So, it's a chicken and egg thing.LaughsI don't know where I fit in. Can you grow without people who are not curious about growth and cannot execute things they didn't know? That's a tough one. I don't know all the right answer.LaughsTobi: It's interesting you mentioned growth…Affiong: Yeah.

I think that people don't know - and even I myself irrespective of - how much having money to survive and stay in business is what ultimately leads to growth of companies. - AW

Tobi: Because we're zooming out a bit. Now, people would say "well, it's tough to build a growing business in Nigeria". It's almost a cliché hearing that. So what I want to know is...okay, we hear that X or Y isn't helping. As a business owner, what does it take to build a growing company? Does government have to get out of the way or help in a certain way? What are the things that has to go right to have a growing company that then attracts quality managerial talent?Affiong: That's a great question and I have a very loaded answer. I'm not going to focus on the banal part of government policy and initiatives. I think businesses are very limited in how much they can grow outside of government policies but let's sort of control for that. I think we underrate the need for capital. I think that people don't know - and even I myself irrespective of - how much having money to survive and stay in business is what ultimately leads to growth of companies. People will tell you - and I find a lot of the advice to entrepreneurs quite asinine and platitudinal…Tobi: That money doesn't matter.Affiong: "Oh, you don't need money at every level"...oh, yeah, I do. I always need money because money is one resource that can unlock others. I say that not facetiously in the sense that money does not solve all problems. But when you start a business, in my opinion, you're assuming a product-market fit. You're making a lot of assumptions around your customer wants, around your product's ability to solve that customer's problems or service, and you may not get it right in the first time. It doesn't mean that you cannot solve that customer’s problem, where you can then generate the value that we see in [a] growing company. But those pivots, those mini pivots that happen in companies, they are not free. Innovation is not free. Changing of business model is not cheap. And that's where capital comes in. Capital helps you overcome some of those mistakes you make or right those wrong assumptions you made that ultimately lead to growth. When I started my business, I'll use myself again as an example, and I'm very wary of using anecdotes but this is an opinion conversation…Tobi: Please go ahead.LaughsAffiong: it's not one that requires all that fact. But the first two products we launched are not our best selling products today. Our best-selling product is a product that we got out of putting two products in the market, the customer rejecting one and telling us what they wanted. Now launching that next product requires significant investment for me to get new packaging, get new suppliers, get new staff, get all these things and had I not had the capital to do that, you would have said "well, there's no market for dried fruits because these two product, out of them, one was rejected". But really, what capital helped me do is bridge the gap to learn more about what the customer wanted and be able to provide for them and then scale that and then launch new products. So money is important. Capital is important. And I think that...

People always say "oh don't give an entrepreneur too much capital in the beginning". I'm sorry, very few entrepreneurs get too much capital in the beginning. And, even if you give an entrepreneur a lot more capital than they are able to absorb in the beginning, you're increasing their chances of actually figuring out where the value is, where the customer”s need really is so that they can solve that problem and that's how firms grow. So, for me, we talked a lot about training, and we talk a lot about product-market fit and understanding your customer; that's not free, that's not cheap. It takes money to survive to do it. You have to be in existence, ou have to have enough working capital, you have to serve them different iterations of this product. And in my view, capital is, as simple and basic as it is, one of the big things that would help firms grow.Tobi: It's a very great point. It's sad some of our capital control measures, because...again, talking about Asia, take a country like China. When China started industrializing, a lot of the capital came from Chinese overseas. In Taiwan, in Korea, in Japan... but here, you find that even government is fighting against remittances and stuffs like that and we don’t have enough capital.Affiong: No, we don't. We absolutely do not and a lot of the capital that's coming in is quite conditioned and I think sometimes also... (complex). We simply do not have enough capital that is needed to spur any sort of growth in enterprise, at even a modest rate I would say.Tobi: What other things do you need to build a growing [business]? I read a blog of yours, once, where you mentioned networking. What role does that play?Affiong: I think it plays a huge role especially in a country like Nigeria where access to opportunity is not democratized (anywhere), but it certainly is more unequal here than in other parts of the world. So in a country where a lot of the resources and opportunities are in the hands of a few, to sort of gain access to that where you are not from that class or cadre, I think networking is absolutely vital. And I think the power of networking is proven globally, it is not just about Nigeria. Take any example, you can't just walk into anywhere and say you have a product/service or whatever and say “you to want to sell it” where you don't need some network, some sort of reputational stamp of approval or something like that to get you through those doors. So networking is simply trying to to do that, and, say leapfrog some of the challenges you face in running a business where the decision rests in the hands of a few people. For me, expanding your network and going outside of your traditional network of family and friends and knowing people who know people, and knowing people who are not in your circle increases your chances of success as a company to raise funding, raise awareness, raise purchases etc.It's sort of very difficult to measure in terms of firm success but I think one of those underrated things that really really help businesses, and people in general, the world over at that.Tobi: So networking in this case functions as a bit of a social capital?Affiong: Yes, it's leveraging your social capital to sort of grow your business directly through getting financing, through getting buyers. Yes, it's sort of a resource. A standalone resource that adds to the growth of your business is how I look at it.Tobi: But how does this square with merit? What you hear is that there has to be a level playing field for businesses to compete fairly. But if successful businesses are better networked, isn't that problematic for, let me say, our idea of merit?Affiong: I think that idea is unfounded. I think the idea of equality is a nice virtue that people think is what leads to the success of societies and I don't think that that's true. I don't think it's played out in history. I think there's a lot of circumstance that leads people down the path that they get on to and if you trace back people's history especially successful people. I know you have this very interesting comment which I leverage (a lot) on privilege analysis. And what people do is, if you see people doing successful things, you go backwards and say they are privileged…Tobi: Yes.

I think that if people are allowed to thrive individually as humans are meant to do, using all the resources at their arsenal, society wins more than it loses. -AW

Affiong: And I think that’s true. You find that success is certainly not equally distributed, and I think you find successful people are more likely to be successful. You find that people who are better networked and experienced tend to build better businesses. It's an amalgamation of people's histories and where they are coming from. It's not that you just said, "Everybody run", and you open the playing field and everybody has an equal footing in terms of what they can do. And, I don't think that's necessarily a bad thing. I think that... especially for entrepreneurial success, you don't need to so many entrepreneurs to be successful to build a successful economy. I look at America, the most successful economy in the world, with three hundred million people who are all most(ly) working in private institutions, very small percentage are successful. So for me, equality in terms of entrepreneurial success is not something you can control for and I don't think it is fair to punish people who have the means to build bigger businesses - that would absorb more people, create more income and productivity for the country - to try and taper that or to try temper that because you want to build an equal playing field. It is like dragging people down to the mean and I don't think that creates the kind of success that benefits society as a whole. So I say "everybody, work with the privilege you have" because that is not something you can easily trade. People don't give up their privilege or people cannot automatically say because I have this kind of access I going to give it away and expunge it [or] I will exchange it for somebody else to have. It’s a very difficult thing to do and you cannot erase centuries of history that has led people to where they are today to try control for equality. I don't think it makes much sense. I think that if people are allowed to thrive individually as humans are meant to do, using all the resources at their arsenal, society wins more than it loses. It’s not a perfect system but I think it's the best.Tobi: Interesting point on priviledge. My favourite example of that point is Bill Gates. You hear today how his middle school was selected in his district for a pilot computer program and how that is some kind of privilege and what you don't hear is, he was not the only kid in that school… Affiong: Yeah, in that school, exactly...every other kid had access to that computer…LaughsTobi: And people just sort of discount the hours he had to work, all the nights of misery, of uncertainty and hard work that people put into this. Another thing I discovered and I would like to know your insight on that is, on this privilege issue, people think that group traits transmits individually like “oh, if you're born into a certain income class (X percent of the income distribution) it means you enjoy privileges that come with that regardless of whatever you do” and often I find that that's not true. There are lots of rich dumb kids who are failures. Absolute failures, who I wouldn't want to be in a second regardless of their privilege. In our social discuss, we're importing a lot of that and maybe my experience is limited to social media, so I want us to lean into that here a bit.Affiong: I think there is certainly and I would say at this point, also an attack of individual virtue and individualism in a way. Where it seems, like you say, people discount the individual components that make people successful and they want to tag it as a privilege of wealth or a privilege of going to Ivy League schools or one privilege or another which is a very simplistic way to look at it. You find that everybody's route to success has a mixture of lottery of birth, economy you're born in, the time in which government policy favoured you or your parents or not. There is a huge very complex mix of things that make people - that lead and support people's success.But there is also, like you mentioned, thousands other people who grew up in those similar conditions. The individual trait of wanting to, of striving or building or doing something is one that is discounted. And I think that there is a general attack on individualism, free thought and individual thought. Even in societies where there is a lot of success, people want to demerit their own individual input to their success and sort of collectivize it as a way of diminishing that. In those societies where everybody else had access, there are also failures. So it's not just that the society was the reason you did well, it's that there is something about you as individual who has been able to build whatever success that you have. So this social discourse around collectivism and collectivizing people's successes and things like that is a worrying kind of phenomenon happening because I think it is us going against who people are as individuals. It is going against the way human beings are made and are built and I think it's worrisome to start punishing and tagging people who are individually successful has being [this] sort of greedy barons (as it were) for being successful or feeling bad for being successful, feeling bad for building a lot of wealth, because somehow they are meant to collectivize their wealth, or somehow they also stepped on other people to be able to get wealthy. So there's sort of very dangerous and insidious ideas around individual productivity and individuals building that I think are being disproportionately spread in a way where they are being accepted much more than I think they should be, and not being critiqued.

I certainly don't subscribe to privilege identification of any kind. I think it's actually an insidious thing to do to point at people and say “declare your privilege, declare your privilege”. It is tagging people in a negative way that I don't subscribe to. I think does not do anything for anyone really. So, I say, as individuals we'll always look for all the resources at our disposal to get to whatever level of self actualization we're trying get on and that should not be diminished in any way. I don't care if you're a billionaire or you're having 100 Naira in your pocket. That is human, that's what we do and shouldn't be discouraged.Tobi: So, now, how much do you think categorical disadvantages like gender or social class matter? If we're talking about individuals like you said, what you find is that individual still fits, however defined - however poorly defined sometimes - into certain categories. Of course, you're a woman in business, you hear things like X is difficult for a woman in business whereas for a man they don't face the same barriers or challenges or maybe things around sexual solicitation. So, how much do you think that matters in terms of striving and success?Affiong: Like you said, equality in general doesn't exist and I think that that's the general premise. That even if you control for gender and look at men, there is huge inequalities in men. (In one gender where you sort of look at different strata, for instance.) So, for me, this idea of gender equality is....let me be careful here...I am not dismissing at all there are categorical disadvantages for women in business and women as a whole. But, again, what do we compare it to? We often compare it to men. We don't compare it to categorical differences that men face as a gender, that there are differences between men. So, the men versus women view is the most obvious way to look at the disadvantages for women. But I generally think that we need to look at that from the perspective of the history of women and [ask] when did women start moving out of the home as a primary occupation into business and does that explain why there are differences in the number of women represented in the industry versus not? Because if you take a different look at it, I think you'll find huge successes, I think you'll find that in a generation of women or someone like my grandmother not being educated, in only 200 years her granddaughter can become the CEO of a business. But if you look at it from the perspective of “well, let's try equal the playing field where we have 50/50 men and women”, that's not really solving the problem in my opinion. The problem is wanting to encourage more women - that women are moving into formal careers and rising to the top - versus saying that the dearth of women in top management is because of some patriarchy or some system that is blocking women. It's that just from the get-go men got into those roles more and more women are getting into those roles [too]. It depends on how you look at it, you might see that what we're actually seeing is an advancement of women versus women [in] the world today still being disadvantaged. And that's true. I think trying to uncover the root cause is very complex and not based on one thing and certainly not based on the fact that men are advancing at the expense of women is a hundred percent true. And that is the simplistic discuss that you're hearing that “okay, men are patriarchal, they are all-boys club etc.” Well then, how do you explain for women being more university graduates than men in developed economies? Women are getting more degrees, women are advancing, more women in management. The way to look at it to solve the problem matters and I think it's more sensationalist to look at it one way versus another.

Now, bringing it back to myself as a woman in business, I can't categorically say and I'm not going to speak for every woman because that's silly to do and my experience is very unique. But I can't categorically say that my gender has hindered my progress as an entrepreneur. I've never gotten a "No, you are a woman so therefore you cannot get progress". I don't know that there are many women starting businesses who have heard that. Now, are there other challenges women face, maybe the impact of motherhood, the impact of social conditioning to make women maybe not...? Social conditioning is even a stretch for me to actually apply to this scenario but whatever experience women face as a collective (their collective experiences growing up which is actually very individualistic [because] it is not all collective) matter but they matter for men too. Men success is not equal. It's...you know, two men that grow up in the same household don't automatically become successful because they grow up in the same household. Two women who grow up in the same household don't automatically just ascend to the same levels because they grow up in the same household. There is something that we're trying to, I think, aggregate which should be disaggregated to actually find ways to advance with it. Now again back to me, no one has ever said "you're a woman so you will not succeed because you're a woman and I don't do business with women". That never happened to me. I don't know how many women that's happened to. And when I look at the impact of challenges that affected me as a woman, say sexual misconduct - Yes, I've had people say inappropriate things to me as a woman and I take that as a challenge that is it different from another challenge that a man faces where... that is a hindrance to his success in business? We have to weigh those up. There are those challenges that affect women but do they disproportionately affect them to the challenges affecting men's success? I don't know that that's the case. I can't say, I can't say that...Tobi: What about the implicit bias? Like maybe there might not be explicit stuff [and] nobody is going to tell you because you are a woman. But some think that there are implicit biases against women that, oh, because you're a woman I can implicitly conclude that I'm not going to offer you that promotion because I imagine that five years from now you're going to get married and have a child. What about implicit bias, do you think that plays a huge role and can it really be corrected? Is it a problem we can solve, really?Affiong: I've read some studies around this and I'm not going to say that my reading is up-to-date on it but if you look at even the studies around senior management and why women are dropping out of management, a lot of it has to do with motherhood - becoming mothers, suspending their career advancement. But a lot of it is...if a woman who has an MBA and is a mother, was working and halfway becomes a mother and decides to quit and become a mother full-time, it's a choice. And it's her choice because she wants to really be [a mother]. There are various reasons people make those kinds choices but I guess the point I'm trying to drive at is that the dearth of the female management is that women at the stage of becoming mothers don't go back into work or take part time jobs etc. So for me, if you look at that you're saying "are women being punished for being mothers or are women choosing - that they enjoy motherhood so they want to do that?" The narrative is that "no, women cannot go back to work because they're mothers". That's not true or that what should be an ideal solution to allow women to have children and are not overburdened by childcare to make that choice and women who choose to actually stay and not want to go back to work are doing so because it is their own desirous outcome. For me, that's something to unpack and I think we're seeing more flexibility around women being able reintegrate in the workplace versus their careers ending because of having children.

Again, I can't say how much that bias of “let me not give a woman a chance because in five years she'll be a mother” is? Maybe it's a bias that is probably more widely held in a different age or category of person. It's hard to test. Does it exist? Probably. Does it exist to the extent that people think that it does? I'm not sure, I'm not sure. I think you're finding a lot of self-selection out of [going up]. I think women are self-selecting out of going up because of motherhood and the demands of motherhood. And if that is to change, we should unpack that as the issue, not necessarily say that, it's because men are stopping women from going up in their careers. So that makes sense. I mean, where would you pinpoint the solution? Where would you pinpoint where to investigate…Tobi: Exactly.Affiong: And how to solve the problem? I think it's looking at that time where you become a mother and your career takes second place. And again, we assume that there is no payoff for people who are deciding to choose that path. The narrative is that it is completely "oh, a do-or-die affair"Tobi: You ought to find satisfaction in work.Affiong: Exactly...and because every woman is made to be this career sort of [person]. Every woman who is working in career is meant to get up to the total ranks and become the boss therefore having a child is not [or] choosing "motherhood" as it were is not success. For some people it is, absolutely. And some people the payoff and trade-off of being a mother is absolutely a form success. I recently become a mother and while I'm an absolute workaholic, I can appreciate why women would want to focus on motherhood. And it's not a failure that they want to do that, and it's not patriarchy or misogyny or a man stopping them from doing that. It's a choice. It's a valid choice for a woman to do. So where women don't want to make that choice and want to advance is where I say let's find solutions for. But not automatically paint it as a huge deal in the world that women choose motherhood. They love being mothers, if they didn't we would not exist as a race, right? Like if women didn't actually enjoy the journey of motherhood. So I think that that's more nuanced than people like to understand.Tobi: Yeah, this is an interesting area, so I'm just going to ask you straight up. Are you a feminist?Affiong: Ah, am I a feminist? Yes I am. I would say that. Do I believe in the equality of sexes which is the traditional definition of feminism? I say I am. I do believe in that. What I don't believe is that equality is that anything a man can do, a woman can do. There is not equality amongst the female gender, there is not equality amongst the male gender in terms of the playing field or in terms of people's access, networks, everything. So this view of feminism that anything a man can do a woman [can] that defines equality as like "oh, I must pick myself up and get what a man does, has, says" (etc.) is equality... is not...it fails to me. It's not real. And I can barely stand by that. Now, what I believe should be equal is access. Whatever a woman wants to do, her gender should not prevent her from doing as a man.But I don't believe that the male standard is what "success" looks like so if women are not equal, (if) they're not exactly on the level as men. Men are not on the level as men; women are not on the same level. So that sort of generic ideology of equality falls flat for me when you think about it logically and it's not a measure that you can even attain because you cannot control everybody's individual experiences.

What you can try and democratize is access - to education. I don't believe no woman should not have access to education, and neither should any man. Access to working, access to things, access to people making their lives better. I believe equality of access is what I'll say I understand feminism to be and I'll consider myself a feminist.Now, new age feminism.LaughsNo. If that is what the decision is, I'll hundred percent say "No, I'm not". I don't even call it feminism, I think it's more...let's not even go into what I think it is because I have strong views about that.Tobi: Laughs...Affiong: Don't get me in trouble. But, yeah…

Equality of access is, for me, the best chance...even that is hard to assimilate. it's really hard when you think about it...Tobi: Yeah.Affiong: you can't control for all the things that makes a person's experience in this world.Tobi: You see a lot of, of course, discuss around gender issues these days and I've been trying to really tease out what it is that we as a society are going for actually. But you see a lot of anger. I don't know how much that helps, but...Affiong: Laughs...yeah.Tobi: certainly there's a lot to be angry about. But I don't know how much anger helps in that area. But one idea I want to put forward and I would like to hear your views here is gender issues and economic development generally. Like, when I see people, protesting or campaigning to end rape for example. Of course rape is a huge huge problem that no society should tolerate but I also wonder on the other side about state capacity…Affiong: Uh hmm.Tobi: You know?Affiong: I doTobi: How does a police force that cannot stop petty crimes investigator rape? how can a police force that can not prevent murders or investigate... properly investigate and prosecute rape? People talk about passing laws where we have laws that are not enforced and where you can easily wiggle your way out of [crime].So shouldn't a lot of this activism be focused on development generally because I think a lot of social progress is positively correlated with income growth?Affiong: Yeah, exactly.Tobi: You'll be surprised.Affiong: And that is a hill I'll die on because I talked today about a lot of lending a voice to causes and social media making it easy for people to join causes and say they support things on a very very superficial level. It's easy to say I support no sexual abuse to women and I completely agree. Only a deviant will support sexual abuse or rape of women or any other cause or out of school kids. But the reality is that a lot of these things are a byproducts of poor societies. You find these ills are more common in societies that are not economically advancing (that are getting poorer). And like you said, for me, in the history and development of a country, the way you solve problem is not...let me take this back to the size of government.

When you have a society where people are too poor to send their kids to school, it doesn't matter what you legalize around the need for education. People simply can't afford it. - AW

The size of government for Nigeria relative to its GDP and the complexity of the economy is completely inflated. You have over-regulation where you should have less government and let industries thrive. Look at China. Like you said, a lot of things where allowed that will not be allowed today in China but those things that were allowed, allowed economic progress and allowed for the wealth of that nation to be possible, right? And it's the same thing when you take it to any social cause. A lot of it is rooted...you call it culture, you call it tribalism, but it is really a competition for resources. Who wants to say that children should stay out of school? But when you don't have a country that is rich enough to build schools (good schools for people), are they better off in schools where they're not learning anything? It's easy to say "well, everybody should be in school". Yes it is, but when you're churning out kids that cannot do anything or cannot learn anything or when you have a society where people are too poor to send their kids to school, it doesn't matter what you legalize around the need for education. People simply can't afford it. So I think with all these causes, there is a very crucial stage of economic development that actually solves a lot of the problems, and it's not more laws. Right now you'll say "well, they're signing a law against this sort of victory". It's not a victory. If you go to the police station and somebody who perpetrates [a crime] can simply pay off his way or somebody who doesn't have access to a lawyer cannot get justice or the fact that the police do not even have the capacity or, Jesus Christ, the petrol to drive to come and see what you're talking about...Tobi: Or even basic investigation… Affiong: Yes, exactly. So for me, a lot of focus should really be on how do we get Nigeria richer? A lot of gender issues are byproducts of poverty. It's not a byproduct of patriarchy or people's cultures. It's that if women got richer…there's a stat that says if women go to school till...(we talk about Nigeria's population or overpopulation, for instance), if women go to school up till high school they have like two or three fewer kids. If women get better education they are likelier to choose who they marry and get in better domestic situation. All these things that are underpinned on just income, education. Those two simple things that are as basic as having more money in your pocket to give you the agency to make more decisions and being literate that improve the outcomes of women and protect them from all these social issues that they're exposed to. But we make a lot of fuss around the symptoms and not the underlying issues. You talked about rape being a huge problem. It is a problem but what would stem that problem is, I think, often invariably linked to increased wealth.Tobi: Yeah.Affiong: If you punish more people who rape, probably less people would rape. But to punish more people who rape, you need a whole host of things to happen.Tobi: You need to be able to catch rapist for one.Affiong: So I do agree that a lot more focus should be on those basic foundations. I believe I live that through my values in terms of being an entrepreneur. My thesis is that if you give people, especially women... I'll shamelessly plug that my company is over 65% female employees and my management team is a 100% women. And my thesis is if you give women opportunity to earn their own money they have more agency with their lives. I'm not going to sit here and say I support a million causes, I support that cause, I believe in that. I believe that if women get better educated and work for themselves and earn their own money, their outcomes in life are better. And that's my thesis and I'm going to stick to that for as long as I can. I may be criticized for not saying "oh, I don't support this kind of mission or social"... I believe human beings are limited in what they can support and I am somebody who believes in depth over breadth anyway. So I want my life's work to unearth that and multiply that as much as possible. I'm not going to say I can be all things to all people. I don't think people can and I think if you focus on core issues, your outcomes are better. So that's my view. That's my hypothesis and I am walking that talk as an entrepreneur in business, and in person.

Tobi: That's interesting. Another point that I want to mention is, of course, we see a lot of funding into social impact programs for women. I was reading a post lately (again, I'm going to put up links for listeners). It was a field study on fertility which is a huge problem in Africa. Nigeria is about five children per woman which we don't have enough income to cover that much. So what they found from the experiment was that fertility interventions and education were more effective within groups where the men were targeted as opposed to the women. What that tells me is that fertility decisions are not made individually. Couples make that decision. But what you see is that a lot of the social intervention programs target women specifically. They don't target families or couples and that's usually celebrated. You think that's a problem? Or how can we resolve that tension?Affiong: I'm not going to say that I know too much about it. I remember reading one study or was it a summary of the interventions of women in the North, who are getting injections and how they have to lie about where they're going because they can't take pills because if their husbands sees them taking their pills, that is a problem and they have to make an excuse to go get injections. Now, where they can't do that, then the intervention completely fails. Because they will get pregnant if you don't take these injections very regularly. So, what's the better solution if you want family planning to be truly adopted and not done in secret? (This is obviously a must on the most vulnerable way women have no rights in these domestic situations.) I would say it makes sense to get men on board and to get them to see the value in family planning because there [in the North], women barely have rights and women disproportionately suffer from having the burden of having too many children. Not just health-wise, income [wise], in most outcomes. A woman who has more children is worse off than a woman who had less where resources are scarce is my view. And to target the man means to help to ease the burden of women. Maybe it feels like more resources are going towards men than women but if the beneficiary is a woman, I don't care how you achieve it. If you really care about women's progress (however you achieve it, if that is the outcome and the aim), that should be what counts not necessarily that the interventions must directly benefit them because sometimes it's counter-intuitive but they [women] are more likely to be benefited if you take an intervention that targets the man. And this might be the case in this situation.Tobi: Let's talk about poverty a bit...Affiong: Okay.Tobi: One of your, should I say mentors or people you admire, Esther Duflo, recently won…Affiong: Yes, I stan.Tobi: [Esther Duflo] recently won the Nobel prize and there's been a lot of coverage around that area. Earlier we talked about employment and things like that. But what do you think is the best way to address the poverty issue? I know you do a lot of work in that area.Affiong: I think the best way is not to assume that there is a best way. And if I leverage the work of Esther Duflo, the biggest take for me from her book, Poor Economics (which was my 2017 book of the year), [is] it opened my mind to how hard poverty is to solve. The idea that (even economic growth) capitalism has solved poverty more than any other system, it still has its shortcomings in terms of its ability to actually rid the world of poverty. Poverty will always exist and that's the first thing but, for me, all the interventions and the mini studies showed that it's very difficult to isolate a driver of poverty and think that when you eradicate that driver or when you add an intervention, you're going to see outcomes that you can replicate. The biggest for me was microfinance. So everybody touts microfinance...Tobi: Massive failure... Affiong: ...has it helps the poor come out of it. No, the studies have shown that what it does is, it just gives people more trading capital. It doesn't make people richer. They just have more money to trade and…Tobi: And more debts in some cases.Affiong: And yes, in many ways, it really burdens people with a lot of debts. So if you look up microfinance and say you're giving finance to the poorest most risky customers at the most exorbitant interest rate. That hasn't changed their lives. Giving them more cash doesn't necessarily mean that they have amassed or built more wealth. That just, to me, shows how hard it is to solve poverty. If we say "well, we have scarce resources, gun to head, what would I pick?" I will pick economic growth. I will say do that, it's worked in the past quite well, who knows how well it works now? But it's really hard to say doing X solves poverty, it's really really difficult and I would encourage everybody to read Poor Economics.

There are so many insights from that book that show that one thing alone or trying to do one thing [does not solve poverty]. And, I want to make this point about when people say (let's take pads and women for instance) that if you give women pads they're going to stay in school. It's so limiting to look at. If you look at studies around pad use in schools, you find that there are cheaper interventions like tapeworm medicine that give people better outcomes in their exams than the cost of pads. So if you're looking from a resource point of view, what are you going to do? Give women pads or give people tapeworm medicine? There is impact for both. But there is this idea that it doesn't matter, the little you do matters.

I don't think I've developed the intellectual capacity to unpack that, but there is a trade-off of people thinking that "well, every little thing you do matters and counts" and I don't think that is true. I think people waste a lot of money, and back to what Esther Duflo is purporting in her book, [she] is saying that do things on a small scale and see whether the impact is actually useful to scale up. People will say something like "well, if you give people pads, those are people who didn't have pads, so you have done something good”. Yes, that might be true on the surface but if you unpack the actual benefits of that, is it better to say (and you can spend ten years giving people pads) "well, we've given people pads so that's success?" [or] you compare it against where you could have done something cheaper that impacts more people and have more long-term success than giving people pads (in which case giving people pads is not the best solution)?I guess the idea I am trying to drive at (this is a very crude thought, it's not yet fully developed) is that we often think doing something is better than doing nothing…Tobi: Yeah.Affiong: And I think in development it is not always true. Because, when you do something and you get a sense of result of that thing, you can double down on that thing that (completely) is not better than doing something else; and Esther Duflo talked about that a lot in her book where you test for in small groups for the efficacy of the intervention. You don't want to run with it and say "well, at least I'm doing something". I think that gives people a sense of accomplishment but what are you accomplishing in the grand scheme of things? It is important to test for and admit whether or not that thing is actually moving the needle or changing the dial. But it seems that if you critique something that somebody's doing, then you are anti-progress. Whereas my view is, are we sure what we're doing is actually going to add value or is actually going to move the needle in terms of development indices. And I think that's turning back to the point that solving poverty is hard, that there is no one way, and so it's a real challenge. There are so many constraints and so that's a difficult...LaughsAffiong: It's a difficult topic to address. I think people just can't be definitive about what it takes to solve poverty.Tobi: I don't know, should we just resolve to adopting Deng Xiaoping's maxim and let some get rich first?Affiong: I'll say yes.LaughsAffiong: Simply yes.Tobi: Here is why I'm saying that. It's because you mentioned Duflo, there is an army of followers that have taken the idea that she and her husband pioneered and just ran with it. And now what you find is, development agencies only want to fund randomized control trials in fields, but are we underrating jobs? For example, you have funds to dispense for development. If you have to choose between giving a couple of billions to say, a thousand ReelFruits and going to hundred villages to do conditional cash transfers, what you find now is development agencies will go for cash transfer programs than [any other]. A good example is YouWin in Nigeria. The impact evaluation that World Bank did showed that it was quite successful, actually...Affiong: I have my views around that. But, did it create jobs? absolutely...Tobi: I am also speaking in terms of income gains for, at least, the people that benefited. Obviously there were people that failed in that cohort but there was massive income gains for the people...it was a lot of money, fifty thousand dollars is a lot of money…Affiong: It's a lot for a firm, yeah…Tobi: but what you find in the current paradigm is that people would rather do this small-scale interventions and test for this and that and look at all these minor effects whereas people will be better off sometimes just getting jobs, having available jobs.Affiong: We were speaking earlier, and if you told me where would I apply money, it would always be in industry. It would always be in enterprise but there is also the truth that businesses fail and fail spectacularly and burn a lot of money. One could argue, what are the outcomes of that? In that process of failing, firms [and] people learning, you're upskilling the human capital of the country which benefits the country as a whole.So you can talk about those benefits. Then if you're talking about "well, let's compare that against giving people conditional cash transfers", that money feeds them, that money increases their lives - maybe access to drugs. There are all these trade-offs that I find, making those comparisons difficult to do. But my bias is for jobs, my bias is for enterprise, my bias is for market-driven/market-led solutions to solve poverty than interventions. I think interventions that come before markets don't work as well and they're often always even...they can't be sustained, you know. I would put my money where even though there's a chance of failure of firm, I think that comes out much better, much more desirable at least, for the development of the country.Tobi: Let's talk about culture a bit. You hear a lot of things like X is not our culture. If you talk about corruption, people say “corruption is our culture”. If you talk about hard work, people say “oh, we don't have a culture of working hard”. How can you change culture?

You marry individual success and individual advancement to different outcomes and you change culture. - AW

Affiong: Sighs. This is a very very tricky questions and I'll first go back to [the definition of culture]. The definition of culture is vague and beyond the scope of our discussion today but I'll just create a definition of culture for the purpose of answering this question as "what people do that rewards them, that advances them individually in the society they're in at the time". For instance, the culture of hard work is very rewarding in America because the society rewards you for the amount of work you put in. That culture of hard work is not necessarily that everybody is born hardworking or people revere being hardworking - if people could get away with doing the least to get the most, they would. That's human behaviour in my view. It is that a society demands that [hard work] and rewards that and that's what people do. So I think culture here in Nigeria is what is the society rewarding? What the people gain and benefit the most [from] is what actions they will continue to perpetuate. As dysfunctional as any society is, the order that allows people to advance the most is what they are going to do and I think that's what culture...at least, even, the culture of a country is. It's not necessarily history passed down from generations, that is a very simplistic view of culture. It is actually what people perpetuate...that is for their survival if you will.

So how do you change culture? Well, I think you change the demand, right? You change what society rewards, you change what the expectation is. You marry individual success and individual advancement to different outcomes and you change culture. If people can get anything done without being corrupt, they are going to perpetuate that. If, for instance, I could get my driver's licence without having to phone anybody, all of a sudden you start finding that the culture changes...Tobi: Yeah… Affiong: If you change process and order and you change the out[come], the way people can succeed in a society without having to deviate from the rules or because, more structures are in place that allow things happen in a more transparent manner. All of a sudden you say "oh, Nigerians are more honest people". I don't know, they may not be more honest than they were yesterday but they certainly don't have to be dishonest to get the same outcome. So, I kind of think that's my answer. I'm not hundred percent foolproof, none of my answers are but it's basically saying what is a society demanding of people and rewarding? America rewards efficiency, so if you're efficient, and the society is built on a level of efficiency that means people don't have to lie to get things done, people don't have to steal to get things done, people don't have to take to get things done; people don't have to depend so much on knowing somebody who knows somebody to get things done and you see a more honest and trustworthy society. But that is because that's what is at play there and if those things become more at play here, I think you'll see the same results. And there are some examples (very few). Where you see more transparency and openness in how people can access things, you find that they're less likely to be corrupt. So if all of us go to the bank, like, if you look at ATM queues and lining up, because most people know if I line up and I walk up to the ATM I'm going to get my cash out, that’s a very transparent fair and clear process. Most people do it and it's like, well, I'll wait my turn till I get to the ATM machine and I'll withdraw my money. I don't have to know anybody, I don't have to do something special. But just having that...Tobi: Process.Affiong: ...process, makes Nigerians look more orderly then they are...LaughsAffiong: Because in another scenario, we will have to fight and toggle to do something like that but because that's very straightforward, transparent process people behave differently. The incentives are different and the behaviour is different to achieve their individual goals. So that is my one simplistic view of how you change culture and I think my view is supported by history a little bit, because if you look at Nigeria today in terms of corruption, nepotism - these are things that have happened in America in the 1600s, 1700s, 1800s. The country was very barbaric...Tobi: And we don't define those countries by those terms today.Affiong: they are not defined by those...the type of nepotism that hold or even monarchies in different countries where (in England, for instance) only monarchs were rich, only people who were part of the royal family had money and access to lands. It's the same thing that's happening today, as those economies grew, as there was more process and order, people's behaviours change. If England were as undeveloped as Nigeria is today, people will act the same way and that would be known as their culture.

Tobi: That's interesting. Okay, final question.Affiong: Okay.Tobi: In line with the idea of this project, what's one idea you'll like to see spread in our society? You have 50 seconds. Affiong: Oh my goodness... what idea would I like to see? For the what…for the benefit of the country, for the benefit of society?Tobi: Any direction you choose.Affiong: In Nigeria, I will have to say the idea I will like to see spread is that around the understanding of what it takes to build a prosperous nation. The one thing I hate is poverty. The one thing, I abhor is poverty because, I think it strips people of their dignity and it strips people of their agency - they have to be extremely productive, and the antithesis of poverty is creating wealth and growing wealth and growing rich and I would love that. If there is an idea - how does Nigeria grow rich and build wealth? is something I would love to see people have a better understanding of and people really rally around because I think wealth creates a lot more desirable outcomes for the quality of life that individuals lead and I think that that's something I'd love to see - more people living better quality lives and not being poor. And I think building wealth and what it takes to create wealth as a country is what I wish more people would embrace, rally around (especially the government) and understand and implement.Tobi: That's a great answer. Thank you very much, Affiong.Affiong: It's been great talking to you.

Cited Studies

Management and the Wealth of Nations - John Van Reneen

Good Management Predicts a Firm's Success - Brynjolfsson, Bloom, Rennen

Reducing Fertility in sub-Saharan Africa - Alessandra Voena

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