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COMMENTARY: The Paradox of A ‘Big’ Poor Economy

former Nigeria’s Minister of Finance Dr Ngozi Okonjo-Iweala

By Tajudeen Balogun, Head, African Examiner, Nigeria Bureau, Lagos

If lost or dazed by the intrigues trailing the acclaimed “healthy” state of the Nigerian economy; its ‘professed’ impressive performance statistics and with the latest alarming and worrisome warning and alert on the same, I believe there will be some good ‘Samaritans’ who may wish to offer a leap and help me out of the aching predicament. I am bothered and not really sure, if am listening and comprehending myself, regarding the recent declarations and pronouncements on the country’s economic performance and its future.

President Goodluck Jonathan and other PDP stalwarts at the President's Declaration

President Goodluck Jonathan and other PDP stalwarts at the President’s Declaration

A fresh example; on Tuesday, November 11, 2014, the Nigerian President, Goodluck Jonathan in his acceptance speech to re-contest 2015 presidential election, declared the “…national food production expanded by an additional 21 million metric tons between 2011 and 2014, a record, exceeding…” the target of 20 million metric tons set for 2015.

The President equally declared that food import bill has declined from “1.1 trillion Naira in 2009 to 684 billion Naira by December 2013, representing 40 per cent slash.

Perhaps, on account of this, Mr. President in his declaration address, told the world that Nigeria has “met its Millennium Development Goal One on reducing hunger and extreme poverty, two years ahead of the 2015 target set by the United Nations, and was given an award by the Food and Agriculture Organization of the United Nations”. Isn’t that a gladden news?, especially when considered alongside the just launched  YouWIN – a Graduate Internship Scheme, the Nagropreneurs Initiative and the sum of  220 Billion Naira earmarked for Micro, Small and Medium Enterprises scheme?

In case you still wonder why I am dazed and where actually I’m heading to, just hold it and please keep acquainting yourself with the statistics for now. President Jonathan is not alone, in the Nigerian cherry economic news. His Spokesperson, Dr. Reuben Abati (this week or last?) did a comparison of the country’s state of economy, between the late General Sanni Abacha’s military junta  and present administration, when he responded in an interview with VOA that  contrary to former President Olusegun Obasanjo’s accusation, “Nigeria’s economy under Jonathan has been growing consistently, between six to seven percent”.

And less than a week after all of these ‘thrillers’, came the alarm bell, from another member of the same government – recounting, warning and announcing the newly hatched terms and measures to support, “insulate” and salvage (decrepit) economy? Please, am I listening to myself very well and clearly; can someone kindly help me out?

Sorry, you are still winking in the dark of the latest. Listen and I will explain to you. The revered Nigeria’s Minister of Finance and Coordinating Minister of Economy, Dr (Mrs) Ngozi  Okonjo-Iweala addressed the press last Sunday and informed about a U – turn – review to the 2015 budget proposal benchmark from $78 to $73 per barrel of black gold (crude oil). This is after the initial fall from the $100/ barrel. The sudden reverse she indicated was majorly a function of price crisis and pressure in the international oil market.

The oil benchmark review she informed had resulted to a slash of about N235 billion, in the 2015 budget proposal of N4.661 trillion by the President to the NASS, as against the previous N4.817 trillion.

Consequently, Dr. Iweala declared an austerity and measures on the once ‘acclaimed’ big economy! The salvaging terms according to her will include review by the government, of the Medium Term Expenditure Framework, (MTEF); funding of infrastructure, job creation, agriculture and human capital development, especially the health and education sectors; sustenance of the status quo, on workers’ salaries and cutting down the allowances, which is a critical aspect of the past bloated recurrent expenditures, all in a bid to safeguard the “working” Nigerian economy.

And to add more to the good tidings, the Nigeria National Bureau of Statistics estimated that, the country’s Gross Domestic Products (GDP) has advanced by “7.67 percent year-on-year in the last quarter of 2013, higher than the revised figure of 6.81 and 6.99 percent recorded in the third quarter and the corresponding period of 2012, respectively. For 2013, growth rate was estimated at 6.87 percent, up from 6.58 percent in 2012”. You may wish to join in hurray!, for the good indicator.

Still, if the Nigerian government and officials can lay claim to all of these active and efficient records, why then was the Finance Minister’s austerity announcement a topic (which has been previously and repeatedly contested) by the same government coming after less than a week of Mr. President’s “efficient” (economy) declaration?

Perhaps, you may want to ask what am I up to; after all government must take measures to safe the economy and the country in the face of looming crises; you may also likely wish to contend that measure in focus (benchmark adjustment) is about the coming fiscal year budget, so, no link to Mr. President’s last week’s justification and economy clean bill. No, I dare contest.

This government will certainly and continue to gloss over its self-acclaimed success in all segments and that is just natural. However, it will do itself a remarkable favour if it reasons allowed with others – the public opinions, on how it can fair in all fronts. Therefore, I ask as follows: Is it that the Honourable Minister was just realizing that the government has been so wasteful in her spending, or was conscious before now, but just turned a blind eye?

Please, can a solid economy continuously and successfully be run majorly on a mono income like in the case of Nigeria – with over dependence on crude oil?; Anyone who is not lost as I am should kindly provide answer (s) for me, if a ‘working’ economy can be declared where the budget traditionally provides for excess recurrent expenditures and at the expense of capital expenditures?; this is the situation with the Nigeria’s budgetary system. And I am longing for a convincing response if an efficient economy could be pronounced where political corruption thrives (where seven men are more than 19 or six more than 21)?

All these are beside the declined (controversial) ratings and high rankings of poor economy and corruption index respectively, of the country, by different world acclaimed socio –economic and political survey and research bodies and institutions.

The Federal government should be receptive and responsive to the fact that most of the healthy economic initiatives already taken so far, are sufficiently with the micro benefits and not all encompassing macro as it has been proclaimed. My point is that, imagine the level of industrial growth; how SMEs will be driven and progressively strive, if the power sector for instance is stable with the huge sums already expended on it by the former and present administrations. There are even some of the schemes which benefits are futuristic and which I feel should have been accorded an isolated consideration.

However, the present challenging situation in the world oil market might be a blessing in disguise, so to say, for this country after all. Specifically, the country must divest its economy as well as localize its direction and peculiarities. So many Nigerians are presently collaborating and taking many productive economic empowerment initiatives, of course, with the support of the government in some cases. More and more still need to be done!

The era of crude oil as a good source of national income is gradually fading out of trends. Today, America, the custodian of the global and highly capitalized economy and one of the world largest consumers of crude oil has reduced its crude oil purchase – after enough reserves. The world super power, today again prides itself over yet another source of automotive energy – shale oil.

The US Western shale oil is a “fine grained sedimentary rock which is very rich in organic sedimentary material called “kerogen”. The shale is heated to separate the kerogen from the rock and the resultant liquid is converted to superior quality jet fuel, diesel fuel, kerosene” and other high value products.

Finally, being blessed with a big economy is actually different from efforts geared towards making it robust, working, effective and efficient. Therefore, successive Nigerian governments must be faced with this fact and reality; consider it and work with it, for a truly wealthy, healthy and globally applauded economic sector, model and system.

The Undeterred, Aluta Lawmakers

Thursday, November 20, 2014 was another special day in the history of the Nigerian democratic experiment. It was a day the nation’s Honourable male and female Lawmakers collectively made an instructive and daring statement as well as displayed the resilience of the real union activism. Permit the spareness of the story’s recount, as it is already in the public domain.

House Members Scales National Assembly Iron Gate To pave way For Tambuwal, Who Was Denied Entry Into The Complex

House Members Scales National Assembly Iron Gate To pave way For Tambuwal, Who Was Denied Entry Into The Complex

Now the critical issue. Please who ordered the policemen that stormed the Nigerian National Assembly complex on the fateful Thursday? A clue to answer to this poser was in the country’s Police Force’s official reactions to the fisticuffs between its men and some members of the nation’s lower legislative house. It said the action was spurred by an “intelligence report” it received on the likely mayhem by miscreants being instigated by some lawmakers. I see. Intelligence report that would make the security operatives to stop the House’s Speaker (Rt. Hon. Aminu Tambuwal) from gaining access to the premises of his office and performs a national assignment; whereas his Deputy, Hon. Emeka Ihedioha, has earlier been given passage and seated in the chambers. May I say it was the Police who besieged the National Assembly complex, to foist troubles and wreck commotion on the complex. Or can anybody confirm whether a single arrest of hoodlum was made while the confusion lasted?

If the Thursday deployment of Police to NASS complex was a show of over zealousness, then IGP Suleimon Abba must be given a much closed watch by his overall boss – the President. In contrary, if the first and second ridiculous actions against the Speaker (since his defection) were the hands of Peter, but the voice of Jacobs, then, those behind the NASS Thursday unrest must begin to realize that no matter the level of intimidation, the resolute and determined people would not deter.

I therefore advise those behind the bizarre to watch very well, again and again the video clips of how those (legislators) despite their ages and positions went ahead with the uncommon dexterity to engage the Police, climb, cross and jump the fence. The statement being passed here is ‘we say no to injustice’. So, what do you expect from those not in their position?

No reader should disturb himself about bias here. What is the sentiment, when nothing happens to politicians crossing to the ruling party, but tension mounts when the opposite happens? If Governor Olusegun Mimiko’s case is stale, be told, please, that seven (of the ruling party) lawmakers out of 26 legislators of the Ekiti State House of Assembly impeached, the substantive Speaker and elected one out of them with the support of Policemen!, Thursday, while the Abuja drama was still going on. Note, six of the seven lawmakers defected from the opposition party and were formally presented during the inauguration of the incumbent Governor Ayodele Fayose. Nothing untoward has happened since October 16, 2014 till the moment.

I have said it severally, other pundits have equally pointed out, that the present Nigerian constitution is vague and ineffective, with respect to party stalwarts cross carpeting and until the snag is revisited and corrected, this problem will persist, and (if not for the benefit of doubt) I am being tempted to say even when the ruling party ‘swings’.

Lastly, Mr. President, the Thursday’s fight between the legislators and police; the fence jumping; verbal attacks; tear gassing and threat to the peace of NASS complex and its surroundings  were too embarrassing, not only to the two institutions (the Force and House), but to your government and the country in general. So, the decision and freedom to either be on the part of people or “your own people” is yours!

E – Mail: tjaysuccess10@gmail.com; Twitter: @ tajudeen balogun





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