‘Appropriate Costing Of Currency Will Engender Economic Certainty’ | Independent Newspapers Limited
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‘Appropriate Costing Of Currency Will Engender Economic Certainty’

Raph Ndigwe
Posted: Jul 18, 2016 at 4:13 pm   /   by   /   comments (0)


Engr. Raph Ndigwe, Country Researcher, Civil Resource Development and Documentation Centre (CIRDDOC) , Enugu, Nigeria in this  encounter with Sylvester Enoghase,  spoke on how inclusive budgeting would ensure popular participation in the processes of mobilising, allocating and managing natural resources in Nigeria.


 Could you please highlight the issue of inclusive budgeting by the National Assembly as a new way of moving away from a command economy in Nigeria?

Essentially, inclusive budgeting is talking about popular participation in the processes of mobilising, allocating and managing natural resources. And as I have tried to explain, we have to always remember that the people that owns these resources we are mobilising are to benefit from the resources and that the government represents the agent.

To that extent, the two must have an effective voice in all the facets of budgeting that we are talking about.

Now, what has being happening over time is that government out rightly believes that is the coordinating role to decide the direction, but with this training in economic framework, we are moving away from a set of command economy where other agent like the private sector in the society must contribute towards the development of the economy.

As far back as two decades ago, there was the issue of Africa Charter on popular participation which supposes to run through all the facets of our planning processes.

These are the types of features that help current developed economies to be where they are today because budgeting is about people, because, people constitute the beginning and the end of any national budget and of course, any public policy process for that matter.

And to that extent, the government cannot arrogate to itself that it knows what the people needs and so, it is only when the citizens are involved that they will be committed to contributing towards the progress and the success of the of the budget.

And so, what essentially inclusive budgeting is required in Nigeria is for the government to realize that it has to carry the people along. But in doing so, there is need to have a lot of what I call a sort of natural partnership with the government a leading role in coordinating but not dictating to the people what they want and it requires sharing of information. There must be parity in the information amongst those people that have sponsored the process. And there are always strong and weak partners. It is the duty of the stronger partner to empower the weaker partner to be able to at least engage them meaningfully. Otherwise, there is always a cause because the people believe the resource available is endless and so all their needs have to be met, but the reality has not been true.

Therefore, the more they are made to understand why the government as agent cannot satisfy all their needs at the same time and why they need to prioritized. These are some of the contestations that are yet to be resolved simply because there is information gap among the collaborative partners.

And so, information is very critical, effective partnership is very critical and for the government to know that it is an agent and a partner is very important.

Why do you think that Nigeria is experiencing the current socio-economic crisis?

The crisis is orchestrated by the lavish acceptance of the dictates of neo-liberalism under the sovereignty of global capitalism with its attendant dominant ideology of the rule of un-regulated, open market forces.

The main features of the crisis are mass unemployment, social inequality, acute poverty, illiteracy and diseases, closure and collapse of industries, political instability, massive electoral fraud, resurgence of ethnic chauvinism and regionalism, unbridled impunity in governance at all levels, high level corruption, religious bigotry and violence. Also are wholesome commercialisation and privatisation of the social, public institutions in; health, transportation, education, water, electricity and agriculture.

We have critically analysed the political dynamics prevalent in the country, and, having studied its objective realities and having as a backdrop our very recent historical experiences as a people, organisation and movement. Drawing strength from experiences across our national boundaries, both within and without the continent; driven and propelled by our understanding of our onerous duty and responsibility both to Nigerian workers and its peoples in general within this period in our history have decided to establish or found a platform that would serve as a vehicle both for Nigerian workers and its peoples to articulate, project, express and generally engage other participants in the nation’s political process.

The days in which the labour movement sat on the bench and watched the political class ride rough-shod over the people is over as we believe that our years of political passiveness and inaction has cost Nigerian workers and the masses in general dearly and has distorted the nations developmental strategies and trajectory keeping us marooned at the bottom of most global development index.

This is despite the huge revenue accruing to the national coffers via our natural resources and the availability of gargantuan reservoir of human resources and capabilities.

 Can you describe the short-term pains that will come as a result of the new forex regime?

There is a lot of pent-up demand. All the airlines want to take all the money that is trapped in Nigeria out. Everybody will go into the market. In the short term, whoever wants to supply the market will say: ‘let’s wait and see whether they are going to stay the course; whether there is going to be liquidity in that market.’  What happens in the short term is that the rate may over-shoot, may be to N300 or higher. But as those demands get met, then suppliers will come into the economy. And as those suppliers come, then the rate will now stabilise.

If you look at South African Rand, it was going for 11 to 12 to the dollar a year ago; today, it is 15. It is a good thing for governments to allow their currencies to move or flow.

The recent changes in the forex market have been described by analysts as a devaluation of the naira; will this affect banks negatively?

I don’t want to talk about devaluation, but I want to talk about appropriate pricing of the currency because, if the currency is priced appropriately, then there will be economic certainty. Then people can plan, and if they can plan, they can trade. If they can trade, they can make profit. If they can’t plan and trade, they will remain in a particular position and then the economy will start contracting. That is why the economy shrank in the first quarter of this year and it may actually shrink in the second quarter. That puts us technically in a recession.

In my view, I think in most countries, people don’t talk about exchange rate the way we do. It is about the only thing that has captured the psyche of the Nigerian people, whereas we should be talking about production, services; we should be talking about setting up and growing businesses. But we are all talking about exchange rate because everybody is looking at the next goods they are going to bring from China. Why are we not talking about the things we can produce in our country? Our blacksmiths have not progressed into being able to manufacture anything.

Our technology is old-fashioned. Our cutlass and hoe, as a means of developing agriculture, have been there with our blacksmiths for many years. When the technology moved to caterpillar and tractor, we were importing those things.

We need to shift our orientation away from “let the government gives us cheap dollars so that we can import.” So, let the dollar be what it will be, let’s do what we can do in our economy.

What do you think are the crucial issues pertaining to service delivery in Nigeria?

In the first place, it has to do with how we are sometimes; our cultures, the way we see life. The average African is respectful so you would expect that culture to carry through to the way we relate with each other in the service arena. Somehow, this mutual respect breaks down and needs to be constantly rekindled when we get to the service field.

The private sector is ahead in service delivery all over the world because you have to be nice to people if you want to make money from them. But, in many advanced countries, the public sector is now following closely and has learnt to sit up. As a matter of fact, in every developed and emerging economy, they have learnt to be even more careful when dealing with public money; even more careful than the private sector guys.

However in Nigeria, both the private and public sector find it tough to stay on the ball for long. We have seen instances where airlines delay passengers for hours and cancel flights without as much as an apology. We have instances where banks slam series of unexplained charges on customers in a bid to maximize profits.

The public sector is dismal, most people will agree. People don’t even bother to show up at work, and when they do, they don’t believe they should really try and get some work done.

Thankfully under the “change” regime things are getting better, but files can still go missing because someone wants to extract a rent and so on. That is where the link between service excellence and good governance appears. The better the service, the lesser the probability for corruption! They go in opposite directions. If there is no intention to be corrupt, service is likely to be very excellent. Anyway, the bad news aside, we are here to ensure everyone sits up and does the right thing. Our initiative will one day be adopted by the Federal Government because change is equal to service excellence and good governance.

Are you essentially concerned with service delivery in the private sector or this extends to the public sector?

Both! Though, we want to make a difference in the public sector; because the public sector in Nigeria is pretty large. The private sector in Nigeria waits for the public sector to start spending yearly before they start to tick.

Therefore, as much as we want to reduce the influence of the public sector on public life, that sector will always be formidable. They had brought up several initiatives in the past – like the SERVICOM – and have achieved considerable success in their attempts too, but they still need help. SERVICOM (Service Compact) is an idea supported by the DfID I supposed. It had more impact in the Obasanjo days. We hope the new administration of President Buhari equally adopts it because it is really a great idea.

You see, service excellence is not a destination but a journey. Even in the developed countries that we are talking about we still see painful service failures. We still see people working in private sector flipping sometimes and cursing out customers.

We see candid cameras where restaurants abroad serve food they pack from the floor or where waiters spit on food and then serve to hapless customers. Everything happens in this world.

The fact that someone installed the cameras that show these anomalies means they understand that if they don’t keep a tab on it service will slip and fall. So, we are here for the public and private sectors… and even NGOs like us. No one is beyond our purview.

From your own perspective, what do you think are the necessary conditions to overcome leadership shortfalls in Africa?

I think that one of the lessons to be learnt is that since national ownership of development strategies is the key to success, leaders of countries in Africa should pursue pragmatic policies that would enhance domestic capacities.

Also, it is my personal opinion that there is an urgent need for international communities to strongly support national development strategies and domestic capacity-building efforts to re-direct Africa developmental agenda

It is my view that since economic growth is a necessary condition, but not sufficient condition for progress to take place in any economy, African leaders must ensure that economic growth process must be inclusive and equitable to maximise poverty reduction and progress on other MDGs.

Also, since hard-earned gains can be reversed by economic and other shocks, leaders of countries in Africa need forward looking macroeconomic policies to support broad-based stable growth.

There is need also for adequate, consistent and predictable financial support, as well as coherent and predictable policy environment, both at national and international levels which African leaders must put into considerations in the decision making.

I believe that the lack of adequate and predictable international financing has been an important constraint in the developmental agenda in the continent and so, there is an urgent need by African leaders to broaden and strengthen partnerships to ensure supportive international frameworks for debt relief, trade, taxation, technology and climate change mitigation and adaptation to sustain long-term human progress.