Nigeria In 2016: The Moment Of Truth | Independent Newspapers Limited
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Nigeria In 2016: The Moment Of Truth

Posted: Jan 3, 2016 at 10:27 am   /   by   /   comments (0)

The president obviously believes Nigeria can spend its way out of a looming recession at a time we should be deliberately deflating the economy through massive cuts in cost of governance, reducing salaries and allowances across board and eliminating waste by drastically cutting back expenses on luxury items.

“The states face three tasks which present significant and debilitating obstacles to their economic revitalisation. First is that they all must regain fiscal sanity by ensuring that revenue matches expenditure. There must be massive cut in cost of governance and focus more on essential public services, particularly in public schools and primary health care delivery. Most states need to ramp up their internal revenue drive, achieve right balance between recurrent and capital budgets and seek to achieve value for money, avoid contract inflation and institute effective price monitoring and public procurement policies” – Senator Olubunmi Adetunmbi

Aan tan ra oni je i rure’ is a popular Ekiti saying which means you do not/can never, profit from self-deceit.  Unfortunately, that, precisely, is what has been happening here in Nigeria for ages but never as  deleterious  to our collective well-being  as when President Goodluck Jonathan’s men were ‘obtaining, siphoning and running’ the public purse dry, pilfering millions and billions  of naira, when poor Nigerian workers,  most of them on no more than a meagre  N18, 000 monthly  salary,  were being owed  for months  until  President  Muhammadu Buhari extended  a bailout  to  the states  and  approved  the restructuring of their humongous bank loans.  Worse  is that  the  Nigerian  Governors Forum is now toying with the idea  of  either reducing  that intangible salary or laying off workers with nary a word as to how they will  cut down on the stupendous cost of governance.

To  further worsen matters,  the president,  in stimulating the  struggling economy  consequent  upon  collapsing oil prices , decided to go ballistic,  presenting a  N6.08 trillion ($30.8 billion) budget for  2016;  an increase of  20 percent  above that of 2015 and by a large measure, Nigeria’s biggest ever budget.  The deficit will, at N2.2 trillion, more than double that for 2015, representing 2.16 percent of the country’s gross domestic product (GDP).  It projects a N1.84 trillion borrowing, half of it expected to come from outside.  The president obviously believes Nigeria can spend its way out of a looming recession at a time we should be deliberately deflating the economy through massive cuts in cost of governance, reducing salaries and allowances across board and eliminating waste by drastically cutting back expenses on luxury items.

I am the farthest person from Economics but I have the word of the prodigious Professor Sam Aluko of blessed memory to the effect that there is nothing without an alternative. He said that some three decades ago as Ibrahim Babangida was dribbling the entire country with his SAP programme. This time around too, it  appears  President Buhari has failed to inject the right antidote to  an economy that is guaranteed to worsen  given  the  way  oil prices  continue to  crash. The ideal paradigm out of the looming economic crises should have been, in addition to those already mentioned, developing alternative sources of revenue e.g.  Solid Minerals, Agriculture and Innovation;  investing  maximally in infrastructure procurement and  emphasising  human capital  development especially  in the sciences and  other  selected areas. The budget should have encouraged social infrastructural development: building of schools and colleges, hospitals, providing increased access to pipe borne water and establishing farm settlements  where the  use of  the latest  equipments  will be the norm. These and more Chief Obafemi Awolowo did in the then Western Region to great effect, culminating in the highly justified slogan: First in Africa, given the region.. Unfortunately, as you read this, even Niger Delta, on which the country depended for its survival for years, remains almost completely  denuded  of  these  infrastructural and social facilities. What  we  have seen, instead  are, amongst others:  proposals to buy a fleet  of new exotic cars for the Presidency – BMW cars for principal officers costing about  N3,630,000,000, N189.1m  for tyres for various types of vehicles – bulletproof and plain Mercedes Benz cars, Toyota cars, trucks, Land Cruiser Sport Utility Vehicles , Prado SUVs, Hilux pick-up vans, Peugeot 607 and 406 cars etc .

You can only begin to imagine all these in a budget that has the highest ever deficit in our history; one that should be encouraging productivity rather than consumption. This, for me, is wrong headed given the country’s present economic circumstances. Those who were happy that  the National Assembly budget was being reduced by a whooping N5B would now know they were simply being had. You get the real import of this misstep when the dire straits in the states are factored into the discussion. As you read this, it has been reported that 11 states would not be able to pay workers’ salaries last December but that is only the tip of the iceberg.  As Senator Olubunmi Adetunmbi painted it in his wide ranging interview from which came the epigram to this article, below is the reality in the states:” The problem of states is beyond cash depletion. The cash flow crisis in states is suggestive of a prolonged inability of state governments to address the structural imbalances in their annual budgets. Like the federal government, many states have no medium or long- term economic plans that can form the basis for annual budget. Consequently, this has led to inefficient spending both in recurrent and capital budgets. Most of the capital investments are in non-revenue assets that stimulate economic activities therefore tying down state funds without a substantial current cash returns. These include unviable airports, stadia, state capital beautification, palatial government houses, dualisation of roads to nowhere and governors’ lodges in Abuja”.

He was not done:

“Additional bridging loans, federal  bailout or the conversion of bank loans into long term bonds, do nothing to solve the state’s underlying structural imbalance between revenue and spending.  Rather, to address the fundamental budget problem, states must develop long-term, realistic plans to correct their chronic structural budget imbalance. Any short or long term borrowing, including bonds, to address the states’ deficit without dealing with structural fiscal imbalance would only further increase the already high debt burden of states”.

With  our states in this economic conundrum, and the federation being an aggregate of the states, the following are the  minimum steps  I think President  Buhari  should  waste no time in bringing to the front burner of political engagement  if Nigeria  is not to remain, like forever, on this revolving barber’s chair; presaging a thoroughly uncertain future:

An urgent re-arrangement of the country which will allow states undertake only those things they can conveniently afford. For instance, it is not only anachronistic that Federal authorities negotiate salaries with workers on behalf of states; it is the height of the illogic, that states, irrespective of their financial standing, pay same salary to their workers. Otherwise, some workers will remain unpaid for upwards of 12 calendar months and, like former Governor Suswan of Benue, governors would be right in saying that they cannot print money. And, by the way, a new revenue formula is a desideratum. With  synergy between the executive and the legislature, the proposed  re-arrangements should not be an impossible task. Senator Adetunmbi elegantly put what the states should do as follows: “States must of necessity right-size their public service; this could mean all or a combination of shedding jobs, outsourcing, cutting pay, trimming benefits and other creative ideas. There are models for managing labour unions during such drastic reforms to ensure collaborative rather than antagonistic labour relations. Singapore did it and interested states can draw from that experience. In most Nigerian states, public service to population ration is as low as 0.2 per cent to the highest of three per cent in Zamfara and Bayelsa respectively. Yet, the public service consumes 60-120 per cent of total revenue in some states”. This state of affairs is most unfair to majority of the citizenry who have no decent jobs of their own as it completely hinders infrastructural and social development.

In case this is not feasible in the short run, salaries and allowances, across board, that is, from the lowest worker to the President, should be reduced progressively by between 10-40 per cent. Whoever cannot survive on that should simply resign his/her position.

Nigeria has walked this accursed route for far too long with nothing tangible to show for it. Most Nigerians know that our present circumstances call for a daring do,  and that should we miss it  now, under about the only Nigerian many believe, with considerable justification, can be our Moses, we would most probably have lost it forever and it may soon be to your tents O Israel..