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Sobowale On Business

Diving headlong into another debt trap – 2

President Buhari

Popularity, real or imagined, is the opium of the political classes. The only way to wound a politician’s ego is to tell him that he is no longer popular or that his popularity is nosing downwards. Two weeks ago, President Buhari announced that the goodwill he started with among Nigerians is still intact. That shows the reader what the shift from candidate to President can do to anybody.

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BAIL-OUT

Diving headlong into another debt trap

There are two Ministries scaring the hell out of a lot of experts these days the Ministries of Justice and Finance. Right now, it is difficult to know which of the two will finish us in first. This is not the Law page, comments on the activities of the Minister of Justice and Attorney-General of the Federation will be left to others versed in litigation. Finance is another matter and here what is easily discernible is that the Federal Government is setting a bad example in fiscal irresponsibility for the states by adopting a “borrow-and-spend” policy.

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CBN Governor, Mr Godwin Emefiele

How to kill a bank, cbn style

The report by Collins Nweze which dominated the financial news on that Tuesday ended weeks or even months of rumours and speculations that one or two banks were in distress. Even the unsolicited comment by one of the rating outfits, last week, stating that Nigerian banks are sound only served to increase anxieties among stakeholders. With the Central Bank of Nigeria, CBN, announcement on Monday afternoon of July 4, 2016, clients of Skye Bank, at least have now had their worst fears confirmed. The ripple effects in the banking sector are immeasurable but will certainly be considerable.

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Buhari

Buhari Learns A Bitter Lesson: Economics is No Respecter of Presidents

Taft was American President from 1909 to 1913; meaning he served only one term during which the US economy was in a recession. He paid the price for coming to power at the wrong time. Taft was not the first, and he would not be the last president, to learn the age-long lesson that economics, like rain, sun or earthquakes etc, respects no president’s wishes. When Karl Marx, 1818-1883, pronounced that “Men make history, but not just as they please” (VBQ p 93), he must have had leaders like Buhari in mind. Nigerians were aware that Buhari, until he went to London for “God-knows-what”, was adamantly opposed to the devaluation of the naira for reasons that were badly explained because he is not an economist.

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BAIL-OUT

Another round of bailout for states? God forbid (2)

The first part of this series appeared last week after the Federal Minister of Finance reversed herself by announcing that the Federal Government was again considering a bail-out package for the states. Even, before writing last week’s column, it was clear that advising governments in Nigeria is just about as useful as talking to a wall. They ask for “all hands on deck”; but they take cognizance of only the hands closer to the corridors of power and whose vested interests must be protected at all costs – even if the people pay dearly for it.

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BAIL-OUT

Another round of bail-outs for states? God forbid

The same Chinese have been known to derisively refer to a person or government saying two opposite things at the same time as someone “speaking with forked tongues”. The Federal Government of Nigeria has been speaking with forked tongues with regard to fresh bail-out for the states, who despite a previous botched bail-out, are still in financial turmoil. Irrespective of political party in power, all the states are in various degrees in trouble. Even Lagos State, the Centre of Excellence, is feeling the pinch badly.

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File: Buhari during the 2016 budget presentation to the National Assembly.

Forget the 2016 budget; it’s no longer realistic(2)

The news report then went on to mention various individuals making the suggestion. It is the sort of report which makes one to wonder if it is intended to be taken seriously or as a joke. But then, one is reminded of the Hubert Humphrey, 1911-1978, late Vice President of the United States, who in Madison, Wisconsin, on August 23, 1965, left the world with the gem: “The right to be heard does not automatically include the right to be taken seriously.” The experts were wasting their time for several reasons. But before going into those reasons, it is vital to remind Nigerians of a new phenomenon in our economic landscape.

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President Buhari

Forget the 2016 budget: It’s no longer realistic

The 2016 budget should be thrown into the waste paper basket. It can no longer serve as a guide to what citizens can expect of the Federal, States and Local Governments this year. The Finance Minister’s admission, two days before the President addressed the world on his first year in office could not have come as a surprise to economists, finance experts, accountants and even those who have a good grasp of simple arithmetic and can think deeply. If ever there was a budget that was doomed even before it was written, the 2016 budget was it.

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NEW FUEL PRICE—Minister of State, Petroleum, Dr. Ibe Kachikwu, briefing newsmen on the new fuel price, yesterday, in Abuja.

Consequences of N145 per litre fuel – 2

The vague promise by the Minister of Information, of 600,000 jobs which will be created by the fuel price increase which was received with skepticism on these pages last week, provides an appropriate point of departure for today’s discussion. We have had seventeen fuel price increases since General Gowon became Head of State and moved it from six kobo (6k) to eight kobo and a half (8.45k). Then, as now, mounting subsidy payments was said to be responsible for the increase.

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FUEL5

Consequences of N145 per litre fuel

Lai Mohammed, Information Minister, NATION, May 17, 2016, p 6. In the report by Yusuf Alli, Yomi Odunuga and Vincent Ikuomola, all senior editorial staff of the paper, the Minister also pointed out that “Government is not about popularity. There are times in life you have to take a very hard decision and this decision is for the long term and benefit of everybody.” Fortunately or unfortunately, the three journalists were with the paper in January 1, 2012 when Jonathan’s government increased the price of fuel from N97 per litre to N141 – an increase of 45.3 per cent. Each of them should be able to recollect what he wrote in response to that announcement. Lai Mohammed, then the National Publicity Secretary for the Action Congress of Nigeria, ACN, also should go and find out what he said in 2012.

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BAIL-OUT

Federal government faces reality on bail-out

“…every Nigerian is now sober. The governors have realized now that this can happen and that oil prices can plummet from $100 to $28 within a short period of time, and that we can be so exposed that we can’t even pay salaries…”So there is a sobriety that has come in. So, we are working with the states and we are not bailing them out. We have said to them that we have a fiscal restructuring plan…”Whatever we are doing will be conditional. Mrs Adeosun, Federal Minister of Finance, May 5, 2016.

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BAIL-OUT

Bailing out states: FG’s exercise in futility

Readers would permit me if the APC spokesman is not identified. He is a long term associate and one of those who have helped me as a columnist in the early years. Like Shakespeare, 1564-1616, “I hate ingratitude more in a man than lying, vainness, babbling drunkenness or any taints of vice” (VANGUARD BOOK OF QUOTATIONS p 103). But, that far I will go and no further.

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File: Buhari during the 2016 budget presentation to the National Assembly.

Economic Conference: An afterthought too late to rescue budget 2016 (1)

NOTE: This article was written on March 8, 2016, two weeks after it was announced that President Buhari had agreed to organize an Economic Summit. Even then, it was clear to some economists that this government was not really interested in the summit. The summit failed to take off on Thursday, March 10, 2016 as scheduled and no new take-off date had been established. Obviously, there is no commitment; only an attempt to silence critics of government.

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