Parlous economy as blessing in disguise

economic crisisNIGERIA is at the moment in serious economic crisis. The falling oil price has aggravated the structurally distorted economy. What with a huge debt burden, decrepit infrastructure, crippling fuel shortages, high debt servicing, pervasive poverty, unpaid workers’ salary, worsening electricity crisis, etc.

The tasks before the President-elect and his deputy are daunting, but not insurmountable. The economic crisis facing Nigeria is a palpable indication of the failure of governance, and its institutions.

It offers the incoming administration headed by Muhammadu Buhari the latitude to embark on far reaching reforms of government policies and programmes that will place Nigeria on the path of economic growth and development.

Economic prosperity and growth is not attained on the platform of waste and mismanagement. A crisis situation requires desperate solutions to turn things around within the shortest possible time.

The economic crisis will be a true test of Muhammadu Buhari and his team’s resourcefulness, imagination and innovation.

He is at liberty to take some drastic and unpopular decisions, buoyed by national interest, which the outgoing administration under Jonathan found difficult to take. An articulation of new set of ideology, philosophy and value orientation is needed to define governance in Nigeria and to drive it.

The emphasis now should focus on the fact that governance is about development, and not about primitive accumulation. In other words, politics is not a vocation for satisfying the greediness of a few, and people who failed to make it in life. To begin with, the president-elect and his team should institute a political and moral code of governance that will guide the present and future political office holders.

Almost every public institution in Nigeria is enmeshed in the wastage of public resources and despicable decay. But there are those whose wastage of public resources is more harmful than others. He should institute a standard by establishing a sustainable template on the salary structure and wages of national assembly members and political office holders to reflect the nation’s status as an underdeveloped country.

Can the National Assembly legislators and top government officials justify their pay and other privileges which they enjoy, in the light of the present economic realities?

In order to cut down on wastes and curb the wasteful tendencies of governors, Nigeria needs a law now to curb the use of private jets by governors and other public officials. Due to waste and mismanagement, the governors cannot pay salaries of workers.

They are blaming the federal government over a clear case of incompetence. When Nigeria had oil revenue boom, what did they do with the money? Now that the situation is bad, the governors have run to the federal government for assistance.

It is apt to state that by this act of dependence, the federal government and the president has inherent political and moral authority over the governors and the constituent states. I think that the President-elect should exercise this authority by embargoing the use of private jets by governors through legislation. The presidential fleet boasts of 10 aircraft.

What will the President-elect be doing with 10 aircraft when the Queen of England boards commercial flights? At least eight of those aircraft should be sold off.

The cost of maintaining these presidential aircraft is one of the reasons why the cost of governance is high. A drastic review of the cost of governance is inevitable if the President must mobilise the necessary financial resources for delivering the dividends of democracy.

The President-elect should embark on the building of refineries to extricate the nation from the scourge of fuel importation. In Saudi Arabia and Venezuela, the countries’ refineries were built by the government.

Moreover, relying only on the private sector to build refineries may create monopolies which may hold the nation to ransom. The president-elect should review the privatization exercise done under the Jonathan administration.

The history of privatization in Nigeria is replete with failure. Although a huge success in the developed nations, it is a failure in Nigeria because of the absence of modern technology and the lack of a disciplined and productive private sector that can champion development.

Yet, it is a popular policy option in Nigeria. What we have witnessed over the years was a bloated appointment of political office holders and aides, which took its toll on the finances of the state and federal governments.

The President and governors should downsize on the number of ministers, commissioners, and aides.

The President-elect should review the criteria for the appointment of ministers.

The current economic situation of Nigeria is the cumulative result of poor governance and corrupt, incompetent ministers and other public officials. Ministers must be held accountable for their performance and conduct while in office. More fundamentally, the incoming administration’s test of political will is what to do with governors and other political office holders who were in power between1999 and 2015.

Not a single former governor is in jail because of corruption, despite the looting and mismanagement that characterized their tenure.

The only exception is Mr. James Ibori. Although the Nigerian judiciary exculpated him of corruption, the British judiciary convicted him. The judgment was an indictment on the integrity of the Nigerian judiciary.

Nigeria’s poverty rate and inequality has inexorably been on the rise. Nigeria’s poverty rate is so high that it depicts a tragic paradox that an oil producing nation with so much natural and human resources has over 70% of its population in poverty.

Nigeria is reputed to be the third nation with the highest poverty rate after China and India.

The poverty rate has left a large proportion of our population struggling to meet the basic necessities of life. Due to this high level of poverty, Nigeria cannot build a strong stock of human capital.

Building a strong stock of human capital is a necessary condition for development. From the economic point of view, a huge population entrapped in poverty is an anathema to economic growth and development.

The president must draw up a concrete plan for wealth redistribution/re-acquisition of national assets. The wealth of the nation is in the hands of a small percentage of the population.

The President-elect had hinted of his intention to formalise the ownership of oil blocks to the Nigerian state. This is a step in the right direction.

The rent-seeking nature of the Nigerian state as a result of over-reliance on oil poses tremendous challenge to the incoming administration. Revolutionary policy measures are required to redistribute Nigeria’s wealth in order to reduce inequality, with it debilitating social, economic, and political consequences on the nation.

The issue of diversifying Nigeria’s economy has always ended up in rhetorical dissipation of time and energy. The policy options on the diversification of Nigeria’s economy have gathered dusts because of lack of implementation. Absolute dependence on oil has truncated the development of Nigeria.

The fact is that when issues of diversifying the Nigerian economy are raised, only the Federal Government is held responsible. This wrong notion derives from our disarticulated federal structure with the states as appendages. Without being whimsical, the states will continue to rely on the Federal Government for hand-outs.

True federalism places a compelling demand on states to develop their resources so that they can exercise some measure of financial independence.

The states were created to facilitate development. Instead of facilitating development, they have become national liabilities. Yet, cacophonies of agitations are still going on for the creation of more states. What a contradiction! Even the National Assembly and the National Confab have joined in this bandwagon agitations for the creation of more states.

The state of California in USA is the eighth largest economy in the world. When states cannot even pay salaries, it becomes mindboggling whether the governors understand the imperative of transforming their states into financially independent economies.

The President-elect must give the states the matching order to diversify their economies or forget about bailouts from the Federal Government.

This should be understood against the background of the boom and burst cycle of the global oil market which impacts negatively on Nigeria’s economy. For once in the history of this country, the President-elect should jettison the regime of primordialism.

Primordialism has stalled the development of the Nigerian nation from 1960 to date.

Fraternal relationships, political, family and ethnic considerations that had hitherto determined appointments must give way to merit and performance. For once, the President-elect must look at national issues dispassionately.

The APC-led Federal Government has a huge challenge of governance before it. Whether it will rise up to the occasion is a matter of conjecture. God in his infinite mercies has given Nigeria a fresh start in governance. This opportunity should not be wasted. • Nwogbo works with the National Open University of Nigeria, Abuja

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