In recent weeks, calls have heightened over the delay in President Muhammadu Buhari’s assemblage of his economic team. So far, minister of Finance, Kemi Adeosun has laid down the marker on what to expect on the economy in the nearest future. JONATHAN NDA -ISAIAH writes.
In recent weeks, the media and social media have been awash on how the delay by President Muhammadu Buhari in constituting his economic team is hurting the economy. Paid writers and columnist have all painted a gory picture on where the nation is headed in the next few weeks. The Peoples Democratic Party ( PDP) which has been out in the cold since their loss in the last general elections have also been hammering on the economy, forgetting that they held sway as the ruling party for 16 years.
10 months after the All Progressives Congress (APC) federal government, headed by President Buhari took over the country’s mantle of leadership, there is a growing concern about the kind of ‘change’ Nigerians are witnessing and the one they were promised during campaigns, no thanks to the criticisms of the opposition. With what they have heard and read in the news, Nigerians are beginning to reason that this change President Buhari had promised them cannot be bad, but it cannot be good at the same time, as the opposition Peoples Democratic Party (PDP) is claiming.
The thinking is that if the change mantra of the ruling APC is bad, why has it so far exposed some looters of the treasury; restored sanity in the system and fight Boko Haram to a reasonable extent? And if good, why has it inflicted untold hardship on the great mass of Nigerians? Political pundits believe that if Nigerians think this way, nobody should blame them for their doubt because the opposition, with their shrill voices, have made ‘Doubting Thomases’ of the people.
President Buhari’s campaign was premised on fighting corruption, insecurity and fixing the economy. While some relative success has been achieved in fighting corruption and insecurity, the same cannot be said of the economy.
Keen observers of the polity pointed out that fixing the economy will take time. This school of thought argue that people are underrating the decay in the system caused by the misrule of the PDP in 16 years adding that , people who are looking for a quick fix to the Nigerian economy are not being fair to the president.
Analysts noted that a lot of anomalies were going on under the last administration of President Goodluck Jonathan, they believe that if you look at the enormity of the decay of the last regime, fixing the economy may take longer than expected. Observers contended that the corruption in the last 16 years has been mind boggling, the arms deal begins to boggle the mind, as revelations of how people in authority looted and plundered the nation’s resources can best be described as shocking.
President Buhari has severally lamented that the judiciary will be a clog in the wheel in his fight against corruption as only reforms in the judiciary will help in fighting corruption in the country.
Some experts have posited that democratic process will have to be set aside in some aspects for the country to move forward. The rule of law has been described as a hindrance to the growth and development of the nation as looters of the nation’s treasury now hide under the rule of law to buy time.
The president assured recently during his state visit to Equatorial Guinea that his administration’s war against corruption will remain “fearless, relentless and merciless.”
“We will be merciless and relentless in pursuing all those who abused public trust. Nigerians will see how some of the elite conspired to run the nation down,” he said.
On insecurity, checks reveal that Boko Haram has been technically defeated and is no longer in control of some territories. Taking over territories and hoisting their flags in conquered areas have now become a distant memory. Reports of tactical manoeuvre seem to be a thing of the past by the Nigerian Military as they have pushed the sect out of the major towns in the north-east with some displaced persons returning home.
However in recent weeks there have been increased calls for President Buhari to now focus on the economy, critics of the president say the same vigour used in fighting corruption and insecurity should be channelled to fixing the economy, while some have said the economy is in total shambles and needs urgent attention. However, in the absence of an economic team, the spotlight has now beamed on the minister of Finance, Kemi Adeosun to deliver the goods. Statistics show that the situation is not as bad as painted because the federal government, through some of its policies, has already set the ball rolling in fixing the economy.
The fall of crude oil in the international market has had adverse effects on mono-economies like Nigeria. Diversification has been mulled as a way out of the country’s economic woes.
Monitors show that the administration has been putting in place measures to put the economy back on track and has been laying a foundation for the smooth sail of the administration’s economic policies. Experts posit that the recent discovery by the Finance Minister that 23,000 ghost workers were discovered in the federal civil service, saving the country billions of Naira is a plus for the minister and administration.
The Treasury Single Account, which was started by this administration according to the minister will also help limit state borrowing; reduce payment delays and curb corruption.
The benefits of the TSA include; helping to check incidents of multiple accounts operated by government MDAs for collection and spending of government revenues.
TSA will ensure adequate monitoring of government revenue receipts and expenditures and block leakages, as no MDA is allowed to keep any operational bank account.
TSA will help check incidents of idle cash lying over extended periods in bank accounts held by spending MDAs, while government continues to borrow to execute its budgets. Under TSA, DMBs using public sector funds deposited by MDAs to make free profits will not be possible.
The minister has also hinted that the government was working on the introduction of performance-related pay for the Nigeria Customs Service (NCS), to motivate improved revenue collection and reduce corruption.
The recent rise in the price of crude oil in the international market can be attributed to President Buhari’s diplomatic shuttles to Saudi Arabia and Qatar.
These moves are seen as foundations for the take-off of the economic policies of the administration as some banana peels will have to be removed for the country to make headway.
It will be recalled that The Economist, has undertaken a review of the cabinet of President Buhari, with a verdict that the minister of Finance, who has an Economics degree from the University of East London and a post graduate degree in public financial management from the University of London, is poorly qualified to manage the nation’s economy.
According to the publication, “Africa’s biggest economy, which relies on oil for 70 percent of its revenue, is sputtering as prices fall. Economic policy has been adrift since Mr Buhari came to power, and investors complain about the central bank’s use of trade controls and import restrictions.”
“However, the new finance minister, an accountant who cleaned up the books of one of Nigeria’s smaller states, is poorly qualified for the job.”
This magazine assertions is hinged on the fact that the Finance Minister has never worked in international financial institutions like the World Bank and IMF like her predecessor, Ngozi Okonjo-Iweala. The minister studied at the University of East London, not Oxford, Cambridge, MIT or Harvard. Her predecessor schooled at MIT.
Some keen observers of the polity argued that the minister of Finance does not need to attend the Ivy League universities in the world to turn around the economy of the country. Determination, heart and the unflinching desire to succeed are ingredients of success rather than some cosmetic criteria like experience. Observers also argued that no president in recent history has had the experience of former President Goodluck Jonathan, who climbed the political ladder from a deputy governor to governor to vice president, acting president and president, yet according to some analysts the former president nearly ran the country aground.
Some social media commentators have said the minister should be given the benefit of doubt and should be judged after some considerable period of time as a year is too early to judge her capacity and capabilities as the finance minister.
Adeosun recently, in a piece gave an insight on what Nigerians should expect in the area of the economy. According to her Nigerians voted for change and to attain that change, there is a need to do things differently, in the recognition that doing what Nigeria has always done will only result in more of the same. That change has started with the vital offensive against corruption, which has had a huge and adverse effect on the economy.
Her words; “Much of the debilitating underinvestment in our infrastructure that has handicapped our economic growth, has arisen because funds were diverted to enrich a few at the expense of the wider populace. At the lower levels, the waste, inefficiency and culture of non-performance have, like a financial cancer, eaten away at our core institutions. We are already beginning to see change. The slide towards self-destruction has slowed down but we must now work collectively to ensure that we exploit the upside from our situation.”
“Globally the downturn has hit all nations, rich and poor alike. The manner in which governments have intervened to protect their economies have been diverse and innovative. What is abundantly clear is the fact that the previous consensus about what is best for the global economy is rapidly changing. There is a concerted move towards individualism rather than collectivism. The new normal for the global economy is that there is no normal, each nation must painstakingly work out the best path to follow.”
“For Nigeria, we believe that the best path to follow is to invest in infrastructure that will unlock the potential in the non-oil sectors. We can transition from being a commodity economy to an industrialised, regionally dominant one. Oil is important but clearly, oil is not enough. Iran is a very recent and relevant example of living without oil.”
“The sanctions that embargoed Iran’s oil led to the development of robust petrochemical and other export industries that enabled the country to survive. Iran survived without oil, made tough decisions and is now being feted by investors as the next growth story.”
“The focus of our economic policy is to redress the infrastructure deficit, unlock the rich diversity in the economy with a determined and focussed turnaround programme. For us it would be a tragedy to have endured so much pain and not emerge better and stronger. The provision of a spending stimulus to the economy is critical to releasing the upside in the economy. Investing specifically in Power and Transportation will release the opportunities in solid minerals, manufacturing and agriculture.”
She added that government spending alone is insufficient to bridge the infrastructure gap and there is a need to embrace private capital to provide additional impact.
“We are at an advanced stage of reforming the process for Public Private Partnerships to provide a seamless pathway to attracting much needed private, financial and operational input to service delivery. Private capital brings more than financial resources; it also brings discipline and best practice, creating a benchmark against which the utilisation of public money can be measured.”
She stressed the need to link the fiscal housekeeping initiatives that the administration has started with the wider economic strategy. Specifically, questions around the focus on corruption and the elimination of ghost workers; controlling inefficient spending and preventing revenue leakages, need to be evaluated in the context of how it impacts our ability to stimulate the economy.
“We have been increasing our level of borrowing annually, and much of that is used to fund recurrent spending. Indeed in 2015 just 10 percent of spending went to capital items. We spent more on travel, training and stationery than on roads. No nation has ever developed with such consistent underinvestment in capital.”
She advised that growing the economy at a rate that will address the employment needs of the country’s huge population requires a fundamental change in how government collects its revenues and spends. The 2016 budget is deficit financed; and the fiscal housekeeping which is aggressively blocking revenue leakages and reducing costs is firmly aimed at ensuring that the borrowed funds are channelled into capital projects, rather than seeping through an inefficient financial management system.
“This is not only prudent economics but it is a moral necessity, since these borrowings will be repaid by future generations. Therefore, while we focus fully on the macroeconomic indicators; we must and will continue to focus on the micro factors which collectively shape and determine the larger picture.”
She noted that the road map to attaining the country’s objectives is a tough one, and we may endure the financial pain for longer than we would prefer, but the upside is that the administration has already endured the worst part of the adjustment cycle with the outlook for oil prices looking more positive but the Federal government is fundamentally determined to ignore oil. One word that will resonate across all that we do in government is ‘Discipline’. Financial discipline is going to be a game changer in shaping the future of Nigeria’s economy.
“Our focus will make sure that ‘every naira counts’ irrespective of its source. The government is ready and determined to lead this crusade of financial responsibility.”