It doesn’t take any extra skill or wisdom to know that the greatest challenge of the Nigerian government today is the economy. And without fixing it, the government cannot claim to have succeeded. Fixing the economy needs to go beyond bandying technical figures, if those figures do not find expression positively in the lives of the citizens. It means that for the same amount of earning of the people, they should not buy less goods or access fewer services than they used to.
Yes, we have heard all the stories of how we got to where we are today. The facts are too well-known to us. And for some of us, we truly do not need the government of the day reminding us now and again that the genesis of our present situation preceded it. I mean, which reasonable Nigerian adult today does not know that we had the period of boom in oil revenues during the last 15 or so years prior to 2015? And we all know how we failed to save for the proverbial rainy day. We all know how there was attempt to put some “excess” income in escrow account and how the state governments (as represented by the all-powerful state governors) challenged that move and eventually got a Supreme Court judgment to ensure that all our earnings were shared to the three tiers of government.
The above complete and total sharing was not the real problem, honestly. The real problem was that each of the tiers of government failed to budget for and store away some funds in the name of reserves for the period of financial drought which in a matter of an oxymoron is called the “rainy day”. Apparently, the state governments, as beneficial owners or custodians of the amount due to two of the three tiers (state and local governments) failed to think, project or spend beyond the immediate needs and greed. And so they had nothing to fall back on when the revenue dwindled.
Instead, we have seen, as happened in the early days of this present government, a resort by the lower tiers of government to look up to the federal government to bail them out. And by some stroke of luck or dexterity, the Federal Government has often helped the states out. However, the Federal Government itself is in dire strait now and finds it difficult trying to stay afloat. This is why the entire country is in an economic trouble. And we have all seen a troubled economy affects every other aspects of our existence.
That is why many of us have held that the main problem of Nigeria is the economy and nothing but the economy. It is only when that is fixed that many other things would become important. Even the fight against corruption is linked to the economy because most of the corruption targets our common wealth. But fixing the economy would require much more than merely fighting (mainly the old) corruption and pussyfooting about allegations of “new corruption”. It requires more than recovering the looted funds.
For the avoidance of doubts, I am all for the investigation, prosecution and recovery of loots. But I do not see that as enough basis to hinge a government on. We need to see a clear economic recovery roadmap. Yes, the dwindling prices of oil, our main economic mainstay and the actions of the militants in the Niger Delta have dealt terrible blows to our economy. But what are government’s concrete plans and reactions to these emergencies? For the greater part of the one and a half years so far, we have seen more of policies and reversals as far as the economy goes.
On September 19, I wrote about the need for government to show a sense of urgency in its approach to the economy, expressing disappointment that one whole month after the country slipped into recession, the executive arm of government had not presented an economic recovery roadmap before the legislature. The best we heard was the proposal to request emergency economic powers for the president. I do not know how much work has gone into getting parliamentary approval for that. The supposed benefits from the assistants from China have yet to be harnessed because we have yet to finalise the agreements.
Many weeks after, not much has changed. The closest to a recovery plan is the vacuous request for borrowing of $29.960bn, made up of proposed projects and programmes loan of $11.274n, special national infrastructure projects $10.686 billion, Euro bonds of $4.5 billion and Federal Government budget support of $3.5 billion. This huge debt is like doubling the country’s current debt profile, yet the amount is being borrowed within two years. But the government’s request, even for such a huge amount, is a classic case of how not to request approval for incurring a debt as the details are not provided.
To grant such approval is to create a cart blanche for government to run amok and run up debts and spending same on any imaginable item. What are the immediate, medium and long-term economic plans of the government? Perhaps if we have those details, it may help us agree on how the proposed loans could help address those needs. As of this moment, the Medium Term Expenditure Framework for the country has not been approved by the National Assembly because the document, again, is bereft of enough details. And until the MTEF is approved, the 2017 budget proposals cannot be finalised and presented to the parliament for consideration and approval. It seems the 2017 budget process is already running into a hitch, even as the 2016 budget was one of the most controversial and embarrassing in recent time.
It seems the Buhari government has capacity needs in the ability to be precise and detailed with information related to finance and economy. One example is the issue of how much of the 2016 budget had been implemented. The government recently announced that about N720bn or 50 per cent of capital expenditure had been released. It will be good to have the details of this. Equally opaque are the details of the amounts recovered in the name of stolen funds from various persons. The failure to furnish the details has encouraged the rumour mills to throw up several figures. Besides, the recovered funds also need to be properly entered as revenue and appropriated.
I will be very sceptical and reluctant to approve a huge loan as is being requested for a government which has shown a high level of policy inconsistency and tentativeness in the last one and a half years, leading to poor planning not only by the state agencies but even by citizens of their personal finances.
For such a loan to be properly considered, the picture of the details must be laid bare. What exactly amounts to special national infrastructure budget? What projects would make up the infrastructure? What are the implementation or execution plans for the projects? Since the loans are being considered not as Federal Government loans but as loans to be owed by the federation (that is the three tiers of government), to what extent have the states and local governments been carried along in the quest for these loans. Very importantly, what are the repayment plans for the loans?
The above and more are the details which must be known before a proper consideration of the request. Failure to do so will amount to mortgaging the future even as we cannot justify what the loan is going to pay for in the present.
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Punch
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