Nigerian economy begging for stimulus
Before Kemi Adeosun, Minister of Finance, diplomatically informed the country, and indeed the world that our economy is in a technical recession, some of us roadside economists, have earnestly been not only canvassing, but begging for stimulus to revamp our economy.
Relying on ancient economy textbooks, especially, John Maynard Kenynes, and taking street analysis on the curve of roadside economists allies of Nigeria, one maintains that the parlous nature of our economy has only one known solution, which is stimulus.
We may recall as well that there was a near national consensus that it seems that no Jupiter could have made our economy better, when against common sense, we all conspired to hail if not applaud those who loot our commonwealth, dressed the looters in noble robes and conspired not to challenge those in power when 30 years ago the government adopted a nebulous economic policy.
The nebulous economic policy adopted 30 years, clearly stipulated that government has no business in business, compels us to share the money and public to abandon its core mandate to the private sector which was more or less unprepared to drive our economy. The policy which is better adapted to advanced economy is known by many names – Chicago School, Washington Consensus, and International Monetary Fund (IMF) Conditionalities. The policy ignored the salient fact that our economy is more or less a rural economy, where most of the so called captains of industry have no factory and the banks are quasi-Shylock lenders.
The advocates of IMF Conditionalities told us how the former British Prime Minister, Margret Thatcher of blessed memory privatised the British Railways, without telling us that the rail lines lasted under public sector administration for over two centuries. Nor did they inform us that public funds and sovereign guarantee of the United Kingdom were used in funding the project and the only difference was that they had officials who were more prudent and more transparent than ours. They took it for granted that the private sector will splash funds to build the decayed infrastructure.
Little did the we reckon that the only factor or material content features or semblance of modern economy is the Petro-Dollar accruing from crude oil and gas sales, which the scramble for is the basic epitaph of the captains of industry and the slide of our nation state.
Ironically, President Buhari’s regime as Military Head of State in the 80s patriotically opposed the nebulous economic policy and its conditionalities – devaluation of the Naira, removal of subsidy, high interest rate, liberalization etc. Many pundits maintain that his overthrow was simulated by those who did not take kindly to his opposition to a policy which they considered will take Nigeria to the Eldorado.
Buhari and his team had then and as at now reasoned patriotically that transparency and accountability were the missing link and that measures like Crude Oil-Swap and recovery of looted funds will revamp the economy and return Nigeria to path of prosperity and glory.
Thats why the triumph of the IMF conditionalities as the economic policy was viewed in certain quarters with skepticism and in some as the route to economic prosperity. Had the policy succeeded, the gross unemployment, despair and despondency in the land today, couldn’t have been as glaring and dominance. Though we are vindicated by the failure of the policy, which we vehemently opposed, however we are not happy, because of the hardship.
For the policy made successive governments since then to abandon its primary mandate of provision of physical and social infrastructure to the private sector. The outcome is squalor, hopelessness and uncertainty. Uncertainty in the midst of a tiny billionaires and ocean of poor majority created by the warped economy. This is why some people marveled when 28 years later the Federal Ministry of Finance catapulted Nigeria above South Africa in the economic growth scale, while gross unemployment, despair and threatens our national security and our fledgling democracy. Events had shown that Dr. Ngozi Okonjo-Iweala and Co were not engaged in creative accounting, but built a mountain out of a mole hill.
Accordingly, it is instructive that the economic crunch which confronted us in the 80s is confronting us today, following the same trend of squandermania and planlessness of yore. Hence stimulating the economy is once more top on the agenda of President Buhari, so as to save our fledgling democracy, and by extension our dear country. This is the background of the economic renaissance of the Buhari regime; borne out of the truism that all hands must be on deck to plug the leakages which undermine development. For one of the subsisting national consensus in our dynamic and ever changing clime is our collective resolve to revamp our economy return our youths to work.
Methinks Mr President’s resolve is to revamp the economy, stimulate growth and promote prosperity, aligns with the Fundamental Objectives and Directive Principles of State Policy, Chapter II of the 1999 Constitution of the Federal Republic of Nigeria; which its primary purpose is welfare and security. As an aside some smart lawyers will opine that this valuable and noble chapter, which highlights the social contract between the governors and the governed is not justiciable.
My answer is that social contract in Chapter II is not only the pillar of democracy, but that it is justiciable given its eminent position in the Oath of Office of the president, Vice President, Governor and Deputy Governors, as stipulated in thus, ‘……I pledge to preserve the Fundamental Objectives and Directive Principles of State Policy…….’ in our Constitution.
Back to the chorus of roadside economists and strident agitation for a stimulated economy, we page with Mr President in the 30% increase in 2016 capital budget, in the budget provision for borrowing to match the dwindling national treasury and earnestly demand for necessary federal guarantee to attract foreign direct investment.
• Okechukwu, DG of VON, writes from Abuja