Editorial
Edo State Governor Godwin Obaseki raised the red flag over Nigeria’s economy recently, saying the country was headed for debt crash amidst idle printing of money that isn’t backed by economic production. He alleged that the country’s currency could soon become valueless against international instruments.
Speaking at a meeting with state transition committee stakeholders in Benin, the governor claimed the Federal Government printed N50 to N60billion to top up what was shared out by the Federal Accounts Allocation Committee (FAAC) in March, arguing that such move underscored the poor state of the national economy. He warned that Nigeria’s dependence on oil revenue rather than on tax and other items of economic production portended doom as it can’t be sustained.
“We have run a very strange economy and strange presidential system 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 that does that. Everywhere else, the government relies on the people to produce taxes, and that is what they use to run the local government, state and the federation. 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,” Obaseki said.
On national dependence on oil revenue, he argued: “The current price of crude oil is only a mirage. The major oil companies who are the ones producing are no longer investing much in oil. Shell is pulling out of Nigeria and Chevron is now 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 to share in Abuja?…By the end of this year, our total borrowing is going to be between N15 and N16 trillion. Imagine a family that is just borrowing without any means to pay back and nobody is looking at that, everybody is looking at 2023, everybody is blaming Mr. President as if he is a magician.”
Obaseki was an investment banker by career before joining politics and his knowledge of economics can’t be belittled. But he chose a most improper way of making known his diagnosis of the national economy, thereby calling his motive and credibility to question. The governor should have known, for instance, that his public claims – unsubstantiated as they were – had acute potential to dislocate and distress the economy because, as some analysts have noted, they could scare foreign investors off investment in the country. Meanwhile, he is versed enough in financials to have made clear that everywhere, spending is not the challenge but when spending is not directed at economic production.
Even if Obaseki had nursed genuine intention to canvass fiscal federalism, among other nationhood virtues, there are formal channels through which he could have made his case and offer useful suggestions on the way forward rather than resort to the alarmist grandstand.
More curious in all these was the Federal Government’s dumbfoundedness over Obaseki’s red flag with all its injurious potentials. Till date, the government has not found its voice to debunk, explain or in any other way situate the claims by the governor as could limit damage to the national economy. In other words, there’s been an utter lack of coordination within government in articulating the official narrative of the economy. Some individual officials of government and those of the Central Bank of Nigeria (CBN) were reported making rebuttals, but no official position has been put out for public education. Of course, the Edo State Chapter of the All Progressives Congress (APC) issued a formal rejoinder tackling the governor, but this being an economic and not partisan issue made the rejoinder spurious and superfluous.
Government’s failure to articulate an official narrative was bad optics that was as injurious to the national economy as the unguarded claims by the Edo State governor.
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