Of Growth and recession: one small question first: who is it that christens our budgets? Must we go through that ritual of naming our budget every year? For instance, this outgoing year 2016, we named it “Budget of change.” But as we all have witnessed, not much changed for good. Instead we soon lapsed into the worst kind of recession ever witnessed in our history.
And we wonder if it is the same fellow who christened the 2016 budget who has also announced so gleefully that this one would be “Budget of Recovery and growth?” Pray what are the bases of his optimism? If he failed so woefully in envisaging the current crushing economic condition that has roiled Nigerians in the last three quarters (and still rages without let), how can we now trust his judgment that the next one year will usher in recovery and growth?
What this suggests is that ab initio, the requisite rigour has not gone into this budget yet again. Yes the figures look nice and the content reads well, but many basic assumptions are poorly thought out and terribly flawed. To assume that Nigeria and her economy will move from the current pits of recessional mire into recovery and growth in the next 12 months is preposterous.
Further indications of a lack of rigour and hard-headed analysis of prevailing economic trends are inherent in the indices applied in the budget projections. First, when was the last time anyone bought dollars in the open market at N305, which this budget is predicated upon? The current budget was premised onN197/$, which was a near-fatal error. Funding the wide (indeed wild) margin between the artificial budget rate and the real thing was enough to torpedo the entire budget.
We have made the same mistake again this time. Has anyone bought dollars in the open market for less than N400/$ in the last six months? In an economy that thrives almost 90 per cent on imports, the difference between N305 and N400 will damage any budget projections. Why don’t we keep it real, why not benchmark the budget at 405/$ and we brace ourselves and take the punch on the chin?
Similarly, what is the basis for using crude oil production estimate of 2.2 m barrels per day? When was the last time Nigeria hit the two million barrel mark? With the uprising in the Niger Delta not abating soon and so many shut-ins already recorded, what magic are we going to apply to produce this quantity of crude oil in 2017? With our refineries still not amenable to repairs, massive importation of numerous petroleum products will continue in 2017. Power outage, which is at the lowest ebb now, is likely to persist since solution is tied to pacifying the militants of the Niger Delta.
It is a tough new year ahead in which we think the government will continue to be bogged down by a shortage of foreign exchange. Importation of common staple food, such as rice, poultry products and vegetable oil, fish and sea food will keep pressure on lean forex.
Then again, the management of the little resources available to the government is starkly inefficient. The treasury still leaks like a bad basket in spite of the much-vaunted fight against corruption. Civil servants, politicians and their collaborators have rewired the system and are back to their sordid business.
If the Secretary to the Government of the Federation (SGF), David Babachir Lawal, can be so accused of massive fraud by the Senate and at that level, what is going on down below can only be imagined. The President Muhammadu Buhari administration has failed to drastically re-jig the critical institutions to have them ‘fight’ corruption. Instead, Mr. Ibrahim Magu has been a one-man riot squad chasing corruption in all directions and achieving little. Where, for instance, is the crucial Auditor-General’s Office in this fight against corruption?
There persists a leadership void; PMB appears weary if not worn out. There is no high mind with a bird’s eye view of the economy to lead it. Everyone seems to run in different directions and the Finance Minister, who came with no clouts, has been further hamstrung and circumscribed so much she may be no better than a cashier now. The cabinet is a largely uninspired bunch, weak and seemingly alienated from ‘number one’. It appears a narrow-minded cabal is currently running the affairs of the state.
But as noted in the title above, this budget has the potential of being a great budget in ordinary times when all the elements are well mixed. For once, both recurrent and capital expenditures are almost 50-50. This must be the first time we have this parity in over a decade. It had always been in the region of 70-30 in favour of recurrent expenditure. This meant that we had been ‘eating’ our resources instead of building our economy.
Finally, deciding a huge pay out to local contractors; paying up official debts owed power distribution companies and making it a state policy to patronise made-in-Nigeria goods are policies that will go a long way in boosting the economy if pursued to logical conclusions.
It must be stated that much of the bottleneck lies with the president and the presidency. He must empower his cabinet to deliver and he must quickly axe the incapable hands. He must tweak his narrow mindset to be more accommodating and do everything necessary to reconcile the polity.
Frazzled Fashola
It was not the smartest move in the first place to make a combo of three large, crucial ministries including all the departments and agencies in their fold and put them all under one man. Yes, former governor of Lagos State, Babatunde Fashola, is known to have a prodigious capacity for work, but making one portfolio of the ministries of Power, Works and Housing is perhaps the dumbest move of the PMB administration.
As it stands, it is obvious that the former governor of example is frazzled and seemingly drained both emotionally and physically. It is not that he could not have given the three-in-one task a good shot, but the times are tough and the environment treacherous. Power situation in the country is a laugh now and Fashola the laughing stock. The roads are deteriorating faster than anyone can fix them even if you have all the funds… but there are no funds.
Solution: the earlier this ungainly combo is unbundled, the better for everyone. At least one person close to me would stop teasing me daily and asking: my friend where on earth is your friend Power Mike, okunrin metala?
