Our economic journey so far; as we are!
There is no need to re-iterate the fact that oil prices are on the nose dive and will not be rising soon; if ever, considering the rising global crises; slowing global GDPs, new discoveries of oil wells and not to forget the fast embrace of renewable clean technologies to replace fossil fuels. By implication, our over 75 per cent dependent oil revenue will soon vanish to nothing; leaving us with dilapidated infrastructures, more unemployment, illiquidity, huge debt burden especially at state levels, insecurity and credit crunch in the financial system.
Relating figures to reality, businesses are folding up, as illiquidity has become a major problem; instigating more unemployment. It is hard to explain how in the entire 2015 financial year, no sum was released for capital infrastructure projects all across the federation. Construction companies have retrenched workers, suppliers are suffering loss in stock value and customers cannot afford purchase prices. The nation’s unemployment rate has in the second quarter of 2015 risen to 8.2 per cent from the 7.5 per cent rate, which was recorded in the preceding quarter. That is brings three consecutive rise in unemployment rate in the country since the third quarter of 2014.
Core inflation rate which stood at 6.2 per cent as of December 2014, rose to 7.7per cent last April which could easily be attributed to the election spending; but afterwards, instead of decline in the rates, we have been having unprecedented increase in inflation rate; standing close to double digits at 9.4 per cent on 30 September 2015. The economy is drowning by the day; in July-second quarter of this year, our Gross Domestic Product grew by 2.35 per cent in real terms; from a pace of 6.23 per cent in December 2014 and 5.94 per cent last January. This trend is most likely to continue even up till end of first quarter in 2016. All of these do not spell well for the economy.
Neither Nigeria nor “Naira” needs devaluation, at this point in time what we need as a nation is a sense of economic direction; too many policy reversals and inconsistencies have been the order of events. We have operated like a man trying to ride a bicycle with just one leg; we have monetary policies running without fiscal policies. The world is not waiting for Nigeria. Investors are not sure of our economic direction as a nation. They cannot trust government commitment to policies and agreements, as our economic policies are shrouded with reversals, that is, the auto-policy and poor operationalisation of PPP (Private Public Partnerships) agreements, etc.
It is true Nigerians need to exercise some patience with the new administration, as they seem to be overwhelmed with the rut in the system. However, with the new ministers in place, the government needs to get their axis right, focus and revisit their economic papers. The economic mantra of change ought to be one with a direction, one not to be altered by political sentiments, propaganda or operation “kill corruption”, which we fear will yield no result, at least to the knowing of the public via imprisonment of the guilty public officers or public declaration of restored loots. We need to know if we are chasing the wind in the fight against past corrupt officers, if we are, then it is time we stop and clean the slate to begin anew. Besides, to fight corruption the people need to first be alive to witness the victory, thus while fighting corruption we must get the Nigerian economy on a forward motion.
Talking solutions, it is good that the Central Bank of Nigeria (CBN) has put an import ban on products that can be manufactured in Nigeria, but to what extent has it gone out of its offices to search, locate and make available credits for the expansion of small indigenous businesses that manufacture these commodities. The trickle down economy is no longer working; small business must be located, financed and given opportunities to thrive.
While the Single Treasury Account (TSA) remains a welcome development, the poor manner in which it was introduced to the Nigerian populace also created bits of financial panic which induced a squeeze in deposits as well as bank credit allocation. The government of the day through the CBN should as a matter of now, continue with the public sensitisation on the working of TSA, while the monetary policy regulations should be less restrictive to enable commercial banks go into real commercial banking of savings and lending, instead of the traditional savers they have become.
In the crafting and adoption of new economic policies, the government need not be hasty as they is need to review policies already on ground, understand what was wrong with their working and what Nigeria needs. For instance, the Zero Base Budget (ZBB) for 2016, though a good one, needs more public explanation as to its working, as it is not a one all solution on its own, how will it infuse into the development of the Medium Term Sector Strategy (MTSS) and the Medium Term Expenditure Strategy (MTEF)? Public sense seems to think the ZBB idea solves all the challenges in our budget system? Which it doesn’t. To ensure that the ZBB works, it should be guarded via amendment of the Fiscal Responsibility Act (FRA 2007). The provisions of the FRA 2007ensures that budgets are made to work with prioritization, accountability, transparency, inclusiveness (people participation) and responsibly. We have other fiscal laws such as the Procurement Act, Audit Bill (which have become overdue to be a law), and the Financial Year Act, etc. The problem remains in implementation; without implementation mechanisms, the ZBB like most of our laws and policies will be another tiny fraction of failure.
We also need to create a platform or framework to ensure that the Freedom of Information Act (FOIA) and the whistle blowers bill (to be a law) are made to work. Openness is key both for the growth of the country and battle over corruption. We are worst off today as a nation because the past administrations were enshrined in secrecy and deceit. It’s sad that the same trend have followed us up to this stage. Where are the annual audit reports? Why is it not public? Where are budget implementation reports for last quarters of 2014 and 2015? What stops us from having a list of contractors who are awarded projects by the government across board and know the amount that were released to them? Why are we yet to have a procurement council? On the FOIA, the Nigerian Judicial system needs to develop or buy some integrity and speed to enforce compliance and sanction.
These and more are lingering questions will continue to remain unanswered, until we get serious on the fight to “prevent” corruption.
We need to be patient and play our part as citizens by obeying set laws and regulation, paying our taxes, reporting and exposing crimes/corruption to relevant authorities, media and the public at large. The Buhari government and her newly appointed ministers must understand that time waits for no one and Nigerians will not listen to excuses. Our economy is broke and there is no money to embezzle or settle the boy with. We are staggering towards decline and we cannot pretend all is well.
We must build up alternatives, commitment and be systematic in our approach to issues. Change will come, but we must be smart to ensure it comes to stay and in the right direction…else well continue with the old norm. God bless Nigeria.
• Ofoegbu is an economic researcher and programme officer, Centre for Social Justice, Abuja.
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