Paradox of An Ailing Economy
Less than two weeks ago, the Edo State Governor, Godwin Obaseki blew the lid off what is considered a closely guarded secret on the state of our economy. The nation’s fiscal managers were allegedly fingered in a dubious scheme aimed at manipulating, misrepresenting, white washing and perhaps to pass a verdict of clean bill of health on an haemorrhagic economy. An economy, long prostrate in need of oxygenation and surgical attention.
Can we escape, the inevitable doom’s day? The anwer is yes and no depending on how the enterprise of governanice is conducted, “going forward”, excuse my use of the over burdened cliché. So far the symptoms are manifestly benumbing and frightening. This current revelation has betrayed whatever confidences we had on government to steer the ship of state out of the woods. It was a clandestine deception orchestrated by our political avatars to regal our imaginations and to hoodwink the public to believe in the absord. Therefore, they painted a glossy picture of our economy behind a veneer of untruths abd half truthsl. But Obaseki punctured the deception by looking beyond the impressive pictures.
The highly respected investment banker turned politician took a swipe at the nation’s economy managers. He raised the red flag in order to abort the lies of government. Hold your breathe. He was not done yet. The Governor went further to allure his audience on how the federal government had gone through the back door to mint additional #60 billion crispy notes for us to share like father Christmas. That the nation’s carotid would covey enough blood to her brain. Otherwise there wouldn’t have been adequate carrots on the table to be shared by the three tiers of government in March. That is the stroke that breaks the camel’s back. This is a clear pointer that our economy is heading towards Idi Dada Amin’s Uganda of old or Robert Mugabe’s Zimbabwe of modern times. We are in dire straits, to say the least. No wonder the rate of inflation is rising by the day. Presently it is about 18.7 per cent. Once subsidy on Petroleum is removed, as it is being contemplated, the economy would be more volatile. But the government is being clever by half bysuspending the evil day because of 2023. The make or mar year. It is most disturbing that inspite of the cloudburst of money at the disposal of past and present governments, Nigeria is still toddling between hell and heaven.
The federal government, we are told, had to embark on this less noble route to shore up the ailing economy in the face of continuous pummelling by the forces of demand and supply. Oblivious perhaps of the long and short term effect on the country. This is in contra-distinction to the test of reason and in total disregard of elementary marcro economics and its financial management principles which teaches that printing of idle currencies not backed by production should be discarded as an option in strategic fiscal policy management because of the injure it cause the economy. Besides, the hyper inflation such a fruitless measure would attract, our currency would be rendered impotent and worthless. Again, it has the tendency to keep foreign investors at arm’s length. This is a signal that the managers have fallen short of expectation. They have failed to deploy state of the art solutions in solving our financial challenges.
As could be expected, Obaseki drew the ire of the progressives, whose only authority is that they belong to the ruling club. And not because they owe their position to any superior knowledge on the matter. The governor who is not known to shy from controversy was obviously in the eye of the storm for all the wrong reasons. No doubt the revelation ignited explosive controversies in certain quarters but he was well prepared for the battle; word for word. The governor was traduced and stirred with mud in public space by the rulling class. Without necessarily addressing the cardinal issues germain to the question at hand. How do we keep our heads above the waters. Name calling would not solve the problem. Not at all.
Unfortunately, neither the Federal Accounts Alllocation Committee (FAAC) whose forte it is to call for the monthly allocation meeting with the aim of “sharing the money” nor the Central Bank of Nigeria, or even other agencies have officially debunked the grievous allegation by the cerebral governor. Not even the ubiquitous Layi Mohammed has responded to the damaging claim. Up until this moment, the government has not been able to put a lie to the assertion. No one has given us any cogent and verifiable reason not believe the governor instead they are engaged in cmpaign of calumny and vilificationa to nail Obaseki. So far the responses have been largely whimsical at best, without strength or rationality.
This was what Obaseki said at at a meeting with the transition committee stakeholders in Benin: “…we have run a very strange economy and a strange federal system of government where the local, state and federal governments at the end of the month, go and earn salaries. We are the only country in the world who does that. Everywhere else, the government rely on the people to produce taxes, and that is what they use to run the local government, state and the federal governments. But with the way we run Nigeria, the country can go to sleep. At the end of the month, we just go to Abuja, collect money and we come back to spend. We are in trouble, huge financial trouble.”
On the issue of our dependence on a monolithic economy, Obaseki did not mince words when he intoned, “…the current price of the crude oil is a mirage. The major oil companies who are the ones producing are no longer investing much in oil. She’ll is pulling of Nigeria and Chevron is one of the world’s largest investors in alternative fuel, so in another year or so where will we find this money that we go share in Abuja.?”
He went on to state the realities staring us in the face, “…by the end of this year, our total borrowing is going to be between #15 and #16 trillion . Imagine a family just borrowing without any means to pay back and nobody is looking at that, everybody is looking at 2023, every body is blaming Mr. President, as if he is a magician.”
Why blame the governor for drawing attention to the rot in the national economy? Just a few hours ago, the Central Bank Governor, Mr. Godwin Emefiele thinks Obaseki was being political and that the governor was economical with the truth. Godwin could not demolish the arguments of Obaseki. He however failed to upturn the narrative instead he argued thus: “no Central Bank anywhere in the world would stand by and refuse to support its government.” If anything at all, Mr. Emefiele has only succeeded in buttressing the position of Obaseki. The Edo State Governor as a members of the Economic Council may have spoken from the point of knowledge and experience. Obaseki may be may have some privileged information at his disposal. Since the government at the centre has not put forward an official position on the issue, it is safe to assume that Obaseki was right on pont.
It is my stand that this rent centered monolithic economy is not sustainable. We are heading towards Coventry if urgent measures are not taken to diversify the economy. The rest of the world have moved on leveraging on modern economies driven by technology. if we must be globally competitive, we must act like global citizens. We cannot insulate ourselves from the emerging competitive world of a global village.
This piece is written by Thomas Ebikabowei Peretu is a social commentator and political analyst