The palpable public anger provoked by the sudden postponement of the presidential and National Assembly elections in the early hours of February 17, 2019, barely six hours before polling should have commenced, might have since become tempered, even though the perceived odium of this ugly incident may linger for a while.
Nonetheless, the question is whether the ultimately victorious candidate or party, on the rescheduled presidential election on Saturday, February 23, 2019, has the passion and capacity to transform and improve our social and economic welfare and, in the process significantly, also, reduce the security threat of a restive army of over 90 million Nigerians who presently live in abject poverty.
In other words, can the victorious party or candidate stem the poisoned tide, which according to recent reports from an international economic think tank, reportedly sweeps six Nigerians into poverty every minute?
Incidentally, just as in 2015, the candidates of the All Progressives Congress and the Peoples Democratic Party still remain frontrunners amongst several other contending candidates, jostling for a four-year term as President, governors or legislators.
The article entitled, “Will PDP or APC rescue the economy?”, highlights the critical requirements for a strong, inclusive and rapidly growing economy. It was first published in this column just before the 2015 elections, which incidentally, were similarly postponed for one month, due to reported security threats in the North-East. I reproduce hereunder a summary of that article. Please read on:
“The 2015 general elections are barely two weeks away and yet, not even close followers of political events can satisfactorily articulate distinctive differences in the ideology of the two major contestants. Instead, Nigerians have been fêted to a reality edition of a seeming Nollywood dramatisation of a ‘roforofo’ fight between two deceitful, self-seeking, gluttonous wives, in a polygamous family, campaigning for the right to manage their husband’s (electorate) assets, for the greater good of all. Ultimately, the embattled husband, like the poor, gullible electorate, will invariably still choose an oppressor for another four years.
Conversely, nations which adopt economic and political systems which readily induce competitive entrepreneurial spirit and self-reliance will positively transform their economies. Notably, for example, the imposition of ‘unitary federalism’ which underpins our association as a nation, has obviously failed to serve as a vibrant engine for inclusive economic growth. Sadly, therefore, despite our clearly bountiful resource endowment, the strident economic progress and keen competitive spirit which fired the subsisting regional governments, before the advent of ‘unitary federalism’ under military dictatorship, has since become inexplicably extinguished despite a huge fortuitous leap in government revenue.
Predictably, our stunted federalist structure will ultimately sink the liberally patched ship of state and bring untold anguish to our countrymen. Nonetheless, any movement towards the equity of fiscal federalism would most likely, reduce the fatal attraction to control the resource rich centre. Undeniably, the glorious years of regional autonomy brought out the best in us all. Arguably, however, a self-serving political class, which habitually derives stupendous benefits from our inequitably skewed social contracts, is in no hurry for positive change.
Furthermore, the 36/7-state political structure is clearly a great disservice, as this selfish contraption has supported an incredible duplication of functions and wasteful application of scarce resources, such that recurrent consumption spending, regrettably, exceeds 80 per cent of the total expenditure in annual budgets.
Invariably, mere lip service is often paid to redress the expenditure framework in favour of infrastructure and human capacity building, even when our lawmakers, alarmingly, earn the highest parliamentary salaries worldwide, despite the pervasive abject poverty of our people. Nonetheless, politicians of all hues, including the PDP and the APC will robustly reject any attempt to realign their gross personal emoluments equitably, to provide succour to the impoverished benefactors who voted these politicians into office!
Furthermore, the accumulated debts politicians incurred during the extended campaign trail must also be repaid, with a handsome profit, while these political officeholders have four years to enrich themselves for a lifetime!
Evidently, neither the ruling nor the main opposition party has a clear grasp of how an economy works. Consequently, the distortional significance of the impact of excessive naira supply in an economy is poppy-cock to them. Instructively, nonetheless, with persistently bloated disequilibrium in money supply, any hope or talk of industrial growth, increasing consumer demand and employment opportunities, or reduced debt burden, with fuel subsidy abolition and new refineries or indeed any promise to diversify the economy would remain just hot air, as faithfully corroborated by the serial failures of successive administrations.
Invariably, economic success or failure critically rests on best practice management of money supply, to keep inflation below three per cent and induce lower interest rates, while simultaneously pumping up consumer demand, which would in turn drive industrial expansion, with more job opportunities! Instructively, however, no economy can achieve distinctive economic growth or any form of diversification if, in addition to the burden of oppressive energy costs, industrialists and SMEs are compelled to also pay over 20 per cent interest to fund their operations.
In this event, the APC and the PDP should explain how they hope to bring inflation below three per cent despite the decades old systemic challenge of the embarrassment of untamable excess money supply, or how, indeed, cheap funding will be liberalised across board below seven per cent (i.e. in place of the often abused selective sectoral ‘wavers’ and interventions) so that businesses can thrive.
It is foolhardy to persist in national debt accumulation, in the belief that the current Debt to GDP ratio is within tolerable limits. Inexplicably, the high cost of funds instigated by the CBN’s present 13 per cent monetary policy rate (2015), (in place of less than two per cent MPR in successful economies) will ironically also attract, abnormally, high double-digit interest rates for risk-free government borrowings and therefore further complicate our ability to service our debts.
In addition, although Nigeria’s total domestic debt has climbed beyond N14.02tn (excluding over $20bn AMCON debt), while external debt is about $11.41bn (2015), the PDP and the APC leaders may not actually understand how these escalating debts unfortunately evolved. Nonetheless, debt service may therefore attract well over 20 per cent of annual budgets ($25bn – 2015) for decades to come and we may borrow to service debts! Notably, however, a significant reduction in debt service values may not favour the cabal and oligarchs that currently control the commanding heights of banking and the rest of our economy, and also the much sought after international portfolio investors. Notably, both the PDP and the APC and their leaders certainly enjoy significant support from those beneficiaries of government and the CBN’s ineptitude.
Similarly, political party finances are also handsomely buoyed by the substantial fiscal leakages from the deliberate mismanagement of public funds that also feed wholesale corruption, which, regrettably, often attract mere slap on the wrist punishment on discovery. The several opportunities for corrupt enrichment in the fuel/kerosene subsidy scheme, for example, currently also cost about N1000bn from the nation’s treasury annually. Ironically, such leakages invariably sustain and reinforce party strength and solidarity, thus, any attempt to restore fiscal discipline, may be akin to self-flagellation for any party or candidate. Similarly, despite the oppressive distortion and the socially oppressive impact caused by naira’s free fall, the related opportunity for increased rent-seeking will prevent any serious attempt to save the naira exchange rate from further devaluation.”
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