Our economic journey so far; as we are!

By Donald Ikenna Ofoegbu

There is no need to re-iterate the fact that oil prices are on the nose dive and will not be rising very soon; if ever, considering the rising global crises; slowing global GDPs, new discoveries of oil wells and not to forget the fast embrace of renewable clean technologies to replace fossil fuels. By implication, our over 75% dependent oil revenue will soon vanish to nothing; leaving us with dilapidated infrastructures, more unemployment, illiquidity, huge debt burden especially at state levels, insecurity and credit crunch in the financial system.
Relating figures to reality, businesses are folding up as illiquidity has become a major problem; instigating more unemployment. It is hard to explain how in the entire 2015 financial year, no sum was released for capital infrastructure projects all across the federation. Construction companies have retrenched workers, suppliers are suffering loss in stock value and customers cannot afford purchase prices. The nation’s unemployment rate has in the second quarter of 2015 risen to 8.2 per cent from the 7.5 per cent rate which was recorded in the preceding quarter. That is three consecutive rise in unemployment rate in the country since the third quarter of 2014.

Core inflation rate which stood at 6.2% at December 2014, rose to 7.7% in April 2015 which could easily be attributed to the election spending; but afterwards, instead of decline in the rates, we have been having unprecedented increase in inflation rate; standing close to double digits at 9.4% on 30th September 2015. The economy is drowning by the day; in July – second quarter of 2015, our Gross Domestic Product grew by 2.35 per cent in real terms;

from a pace of 6.23% in December 2014 and 5.94% by January 2015. This trend is most likely to continue even up till end of first quarter in 2016. All of these do not spell well for the economy.
It is true Nigerians need to exercise some patience with the new administration, as they seem to be overwhelmed with the rot in the system. However, with the new ministers in place, the government needs to get their axis right; focus and revisit their economic papers. The economic mantra of change ought to be one with a direction; one not to be altered by political sentiments, propaganda or operation “kill corruption”, which we fear will yield no result; at least to the knowing of the public via imprisonment of the guilty public officers or public declaration of restored loots.
We need to know if we are chasing the wind in the fight against past corrupt officers; if we are, then it is time we stop and clean the slate; to begin anew.  Besides, to fight corruption the people need to first be alive to witness the victory, thus while fighting corruption we must get the Nigerian economy on a forward motion.

Talking solutions, it is good that the Central Bank of Nigeria (CBN) has put an import ban on products that can be manufactured in Nigeria, but to what extent has it gone out of its offices to search, locate and make available credits for the expansion of small indigenous businesses that manufacture these commodities. The trickle down economy is no longer working; small business must be located, financed and given opportunities to thrive.
While the Single Treasury Account (TSA) remains a welcome development, the poor manner in which it was introduced to the Nigerian populace also created bits of financial panic which induced a squeeze in deposits as well as bank credit allocation.

The government of the day through the CBN should as a matter of now, continue with the public sensitization on the working of TSA, while the monetary policy regulations should be less restrictive to enable commercial banks go into real commercial banking of savings and LENDING, instead of the traditional savers they have become.
In the crafting and adoption of new economic policies, the government needs not be hasty as it needs to review policies on ground; understand what was wrong with their working and what Nigeria needs. For instance, the Zero Base Budget (ZBB) for 2016, though a good one, needs more public explanation, as it is not a one all solution on its own; how will it infuse into the development of the Medium Term Sector Strategy (MTSS) and the Medium Term Expenditure Strategy (MTEF)? Public sense seems to think the ZBB idea solves all the challenges in our budget system. It doesn’t.

To ensure that the ZBB works, it should be guarded via amendment of the Fiscal Responsibility Act (FRA 2007). The provisions of the FRA 2007ensures that  budgets are made to work with prioritization, accountability, transparency, inclusiveness (people participation) and responsibly. We have other fiscal laws such as the Procurement Act, Audit Bill (which have become overdue to be a law), and the Financial Year Act, etc. The problem remains in implementation; without implementation mechanisms, the ZBB like most of our laws and policies will be another tiny fraction of failure.

We also need to create a platform or framework to ensure that the Freedom of Information Act (FOIA) and the Whistle blowers bill (to be a law) are made to work. Openness is key both for the growth of the country and battle over corruption. We are worst off today as a nation because the past administrations were enshrined in secrecy and deceit.
We must build up alternatives, commitment and be systematic in our approach to issues. Change will come, but we must be smart to ensure it comes to stay and in the right direction… else we will continue with the old norm.

Ofoegbu is of the Centre for Social Justice Abuja. 08170944306

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