Thinking inside the box
The on-going drama in idea-generation for sourcing funds for fiscal stimulus is exciting! Act 1, Scene,1: Tony Blair persuaded President Muhammadu Buhari to use Eurobonds to avoid the inherited looming financial disaster before May 29, 2015. PMB was lukewarm. Act 1, Scene 2: Christine Lagarde presented IMF-template for Nigeria’s economic revival in Q4, 2015. PMB was taciturn.
Act 2, Scene 1, PMB started global campaign for recovering looted funds in Q1 with poor concrete response. Act 2, Scene 2: Works, Power and Housing minister proposed use of idle pension funds for infrastructural development in Q1. Act 2, Scene 3: Finance Minister told Washington journalist that Nigeria was not eager for IMF loan in Q1. Act 2, Scene 4: Femi Falana (SAN) petitioned Federal Government to recover $66.5 billion debts instead of external loans in Q1.
Act 3, Scene 1: orchestrated campaign against PMB’s “medieval economic policies” of pegging exchange rate by political economists/activists/monarch (sponsored canvassers of SAP Phase II?) in Q2. Act 3, Scene 2: PMB succumbed to pressure on removal of oil subsidies and devaluation in Q2 through which “about N920 billion has been “conservatively” lost with respect to the debt stock” (The Guardian 26/09/16) with devastating impact on exchange, inflation and interest rates with automatic upsurge in hunger and poverty among the citizenry. Act 3, Scene 3: Nigeria’s economy officially entered recession in Q2 and desperate campaign by various “experts” on the panacea, including “sales of national assets” and sacking/re-deploying two ministers began. Act 3, Scene 4: While FG and Governors support the sales of national assets, Labour and few politicians prefer the use of recovered looted funds in Q3!
The Budget minister’s decoy: “government is exploring several angles in the asset sales proposal including re-purchase options, which will make provision for buy-back of those assets when the situation improves” worsens the proposal’s credibility, given Nigeria’s disastrous management of the programme for the “pocketisation”, sorry, privatisation, of the national assets through glaring evidences of under-priced sales of other national assets. Vladimir Putin is the only global example of successful asset buy-back from dubious buyers for rescuing the Russian economy.
This writer identified the faulty implementation of the privatisation programme as a potential cause of (this) economic distress in “BPE’s insider-outsider mafia wars” (The Guardian 26/08/11) through the loss of an annual average returns of 0.005% on about $100 billion investments on the public enterprises for which about $1.6 billion (net of total operating costs?) was received from the sales/concessioning of most of the enterprises, loss of the enterprises (most of which were asset-stripped while billion dollars continued to be spent on importing products of the privatised enterprises as evidence of the programme’s failure), millions of jobs were lost instead of the expected World Bank’s estimated seven million new jobs and the horrendous emergence of monopolies/oligopolies in sensitive economic sectors.
Also, Professor Adogamhe, Paul, in assessing Nigeria’s privatisation programme in (Poverty and Public Policy Journal, 2012) wrote: “Thus, the public enterprises, the last vestige of the Nigerian economy suffered a catastrophic collapse, immersing the already poor Nigerians into an economic strangle-hold.” Hence, using a failed tool to solve the problem created by the failure of the tool is absurd since the failure of the privatisation programme was/is proximally a principal “lead” cause of this recession!
Moreover, with weak liquidity and high receivables, it is absurd to commence asset sales before debt collection. As the alleged $66.5 billion debts possibly exclude undeclared $12.7 billion oil/gas exports to USA between 2011 and 2014 being probed by the House and $12 billion allegedly “repatriated illegally” by a telecoms company, selling national assets to raise $15 billion appears spurious and raises questions on why Falana’s and Fashola’s out-of-the-box suggestions are being ignored by the “experts”. And if sales of national assets are required to finance 2016 budget, with what will the 2017 budget be financed? Will Nigeria follow Greece’s example in selling some of its tourism-revenue-generating islands to finance herself in 2015? Obviously, tactics is being substituted for strategy in solving this economic crisis!
Furthermore, the allegation that PMB’s anti-corruption “body language” scares investors is ridiculous! What scare investors from Nigeria are systemic: oxymoronic democracy (globally respected executive for “honesty and integrity” flanked by morally tainted legislature and judiciary), scandalous delays in concluding litigations through judicial corruption that increases investors’ risks of obtaining justice honestly in potential business disputes, infrastructural deficiency and most importantly, the absence of anti-trust law for fair open-market competition! In this respect, Adogamhe asserted: “The indigenization of privatization.. ended in cutting out the foreign entrepreneurs from injecting the necessary external capital and technical expertise that the Nigerian economy needed.”
Clearly, regardless of technological innovations and market-attractveness, no investor will enter any industrial segment with virtual monopoly/oligopoly especially with proven back-hand government patronage/support. Hence sales of these cash-cow assets in key economic sectors that may further concentrate them in the hands of the few will further scare investors and dry up needed FDIs despite fiscal and monetary incentives.
Therefore, it is crucial for the government to avoid falling into the trap of the highly networked cabals by being wary of self-serving “experts” some of who, though caused this economic crisis, want to profit from it. Two evidences suffice! Before the start of inter-bank market-determined exchange rates, this writer cautioned :“the deliberately silhouetted champions of this new round/regime of devaluation will disappear into thin air when these terrible economic consequences start like their predecessors did in 1986/7 to leave those in government to dance to the music of economic turmoil they composed” in “Devalue to scrap the Naira” (The Guardian, 03/06/16)!
Today, against who is the people’s anger directed: government or the “voodoo economist” advisers? Finally, this writer alerted: “Hence, especially with regard to the cabalistic socio-economic vampires, he (PMB) needs to constantly remind himself of the coach’s: “don’t-forget-your-left-hand” ringside pressure on Dick Tiger in his epochal fight with Gene Fullmer on 10/08/63!” in “Nigeria’s highly challenging 2016 budget” (The Guardian, 29/12/15)! Are the “ vampires” not re-grouping/re-emerging?
• Okunmuyide lives in Lagos