The Task Awaiting Buhari’s ‘Wise Men’
MORE than three months into the life of the current administration led by President Muhammadu Buhari, it is yet to formally unveil its economic blue print for the next four years.
In fact, a former Deputy Governor of the Central Bank of Nigeria (CBN), Dr. Obadiah Mailafia, in the frenzy, following the recent JP Morgan’s announcement of the delisting plan of Nigeria from its Bond Index for Emerging Markets, declared that beyond the lack of liquidity excuse tendered by JP. Morgan, the real reason behind the action may be the seeming lack of economic policy direction that Mr. Buhari wants to thread.
As an institution which is guiding foreign investors on investment decision, it wants to be sure beyond doubt what economic agenda a country has, so as to ascertain whether it would be favourable or not. Therefore, the earlier the government comes up with an economic blueprint, the better for it, because this, to a large extent, drives foreign direct investments,” Mailafia said, while giving a perspective to a television debate in Abuja few days ago.
Again, a development economist and former Diasporan Nigerian, Mr. Odilim Enwegbara, has warned President Buhari to be very proactive to ward off the looming economic recession by ensuring that his economic management team pursues a pro-growth, investment and jobs fiscal policy direction.
This, according to the economist, should be the team’s first step, adding: “The team’s comprehensive fiscal stimulus package should focus on an unprecedented infrastructure investment. Here, the target should be on power sector with an ambition to generate not less than 100,000MW within the next 10 years.”
All these assertions, somewhat, go to support the claims by President Buhari and Vice President Osibajo, on assumption of duties when they painted the picture of a bad situation of the economy, as they told Nigerians that they met an empty treasury, with a burgeoning debt portfolio, which has spiraled to over $60 billion.
All the claims seemed plausible as governments, in all tiers then, were battling with meeting their basic commitments of paying workers salaries, until the new administration had to intervene with some stimulus packages, which saw the holding of two Federation Accounts Allocation Committee (RAAC) meetings in one month, where Federation revenue was distributed, as well as a N338 billion life line for states, which were still cash strapped after the two FAAC meetings to meet up with payment of their workers’ salaries.
Experts say the President needs to do more than just resorting to ordering the CBN to print Naira as bail-out for states or the Federal Government, because these measures would send out wrong messages to Nigeria’s global partners and investors’ confidence in the country. That is why he needs to ensure that the team expected to be unveiled soon must be men and women with capacities to provide solutions to 21st century challenges.
For instance, it is absurd to know that nine moths into a fiscal year, not a single penny has been released to Ministries Departments and Agencies (MDAs) for the purpose of executing capital projects, which are the only source from where the citizenry can benefit from government.
Again, the tardy nature of capital budget implementation by the MDAs, even when funds are released to them, leaves so much to be desired. As such, who ever is going to be assigned the role of the Finance Minister, must be someone with a mind of his or her own, who cannot be easily dissuaded from insisting on the right things being done.
One area that the President needs to confront in the budget administration in Nigeria is the appetite for MDAs to hide projects that could be done on a Public Private Partnership (PPP) basis to save government huge resources from the treasury.
The Director General of the Infrastructure Concession and Regulatory Commission, Mallam Aminu Dikko, attested to this fact in a chat with The Guardian.
He said: “Whereas, the Federal Government has developed a robust World Bank, AFDB backed public private partnership (PPP) model for project financing in Nigeria, where private funds could be deplored to fund public utilities, some MDAs would prefer to take the projects for government financing, because of the pecuniary gains they derive from government funding, which most times is always prohibitive to carter for various interests in the award of the contract.”
Still expected to pose a great challenge to the change plan of the President will be how he confronts the fraud in the import waivers granted by the Federal Ministry of Finance and tax concessions for investors recommended by the Nigerian Investment Promotion Council to the Federal Inland Revenue Service, which is robbing the country of several billions of Naira. How the in-coming President tackles this menace would go a long way in mitigating the paucity of funds in the economy.
Some of the perceived challenges may have provoked Prof. Yemi Osinbajo, last May, to declare that the Nigerian economy had reached its worst moment in history.
Giving a perspective to the situation, a development economist and public affairs commentator, Mr. Odilim Enweagbara, described it, as ‘Nigeria at a crossroads’ because of the myriad of challenges seeking equal urgent attention. He then advised the new President to immediately hit the ground running before Nigeria becomes a laughing stock amongst the comity of nation.
Enweagbara also said government should seek “alternative sources of revenues.” He added, “besides high import tariffs and increasing value added tax (VAT), government should also seek other novel sources of raising its revenues to meet its growing budgetary needs. This has become inevitable in an era oil revenues are no longer enough to meet government’s increasing needs to invest in the country’s economic diversification, which is needed should be hope to diversify government revenues too.”