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BUDGET 2012: War On Many Fronts For Olonjo-Iweala

By Dele Sobowale
“The worst thing that can happen to a leader is to look back and discover nobody is following”.
President John Kennedy, 1917-1963.

Dr Okonjo-Iweala  already received my sincere welcome back to the hot seat, which had got increasingly hotter, for her courage and patriotism – even if the courage borders on foolhardiness and the patriotism laced with a martyr complex.

She also needs all the luck in the world to achieve any success this time around. On her first tour of duty, she was fortunate to have three things going for her. The first was a strong President, who, once convinced, gave 100% backing to his Ministers.

The second was a clear issue – the nation’s heavy external debt burden. The third was the hefty $36 billion in external reserves from which an equally hefty settlement could be made and there was still a tidy sum left in the kitty.

This time, she is operating without those three fortunate inputs to her success. Victory is no longer assured. Instead she is faced with the only option of serving her country with “sweat and tears.” The first test confronting her is the 2012 budget; it might also constitute a personal disaster for the following reasons.

As the leader of the nation’s Economic Management Team, she has been cast in the role of a general leading the troops to war. As such, she has already made one fatal mistake which no general should make – she has revealed to her adversaries the major plan of battle.

The war will revolve around fuel subsidy removal. By so doing, she has given the opponents several weeks to plan their own counter attack and the 2012 budget might be the first to be contested, not only in the National Assembly, but in every state capital and on the streets.

If care is not taken, Nigeria might join Egypt and Greece – nations where economic policies have driven a wedge between governments and the people.

Furthermore, she proceeds to fight this war with a divided ruling political party behind her. Unlike the US and the advanced countries, with which she is more accustomed, where a ruling party has a definite ideological position with respect to economic issues, Nigeria’s ruling party is nothing more than “a conspiracy to seize power” according to late US President Dwight Eisenhower, in an address on November 7, 1956.

The lack of shared ideology between members of the ruling party, as well as most members of the opposition parties, explains why state governors elected on the same party platform and National Assembly members hold opposing positions on the crucial and conflict- inducing matter of subsidy removal.

She cannot even count on all the President’s party members to support her. Similarly, virtually all the governors, including PDP governors, oppose the Sovereign Wealth Fund on which she depends to achieve results. Her meeting with them ended in humiliating defeat because she met a solid wall of resistance. That is no way for any general to win a battle; not to talk of the war.

She faces several obstacles in this brutal fight, not only for the survival of the nation, but to uphold her reputation for victory – and she must win all of them. Otherwise this will be her Waterloo. The number one barrier to victory, in this war, happens to be herself.

Napoleon Bonaparte, 1769-1821, suffered his humiliating defeat at the Battle of Waterloo simply because he could not change his style as required and because he fought on too many fronts. Dr Okonjo-Iweala is the quintessential World Bank/IMF staff. Or what could be called the “Organisation Person.”

She rose to the top ranks because she believed in the conventional wisdom of the Bretton Woods institutions – which are basically conservative and perhaps imperialistic still. Her colleagues at the bank and the IMF had been Ministers of Finance or Economic Advisers and consultants for several countries in Europe and America, as well as Nigeria, for more than fifty years.

Unfortunately, for the USA and Europe, those advisers and Ministers, drawn from the World Bank and IMF, have cumulatively driven the US and Europe into the crisis they now experience in Greece, Spain, Italy and Portugal and which now threatens the rest of mankind.

To the best of our knowledge, nobody has ever argued that Dr Okonjo-Iweala has advocated any different approach to the management of national economies than her former colleagues. Consequently, it is not totally surprising that she had chosen the conventional conservative approach to a complex problem requiring innovative thinking.

In fact, what she has so far offered is all too predictable. And any general whose moves are totally anticipated is probably the “best general for another war – not this one” (apologies David Halberstam in, THE BRIGHTEST AND THE BEST).

If Madam has nothing more to offer than World Bank/IMF “one size fits all” solution to our problems, perhaps she should return to Washington.

The second most important adversary she faces is the possibility of a global recession, or even a 1930s-style depression. Unflattering as it might be to the World Bank/IMF organisations’ self-esteem, the entire world’s economy is at risk because the US and Western Europe, which had managed the global economy had messed everybody up. And she was part of it.

Fortunately, she recognises the danger to Nigeria. Addressing the Joint Tax Board in Abuja, recently, she announced as follows: “A country, like Nigeria is particularly vulnerable because our economy is dependent on one product – oil….We have to diversify our economy.

For us it has become a matter of life and death.” Nothing truer has ever been said about the Nigerian economy. And sages and fools have repeated the same thing for more than thirty years. She was the leader of the Economic Team in 2003-2005, and she made the same observation in 2003.

Nigerians would want to see the blue print for diversification she developed in 2003, the implementation plan a
nd what was achieved before she returned to the World Bank – after the raid on our external reserves. Good intentions are not enough; Nigerians want to see, in black and white, what was proposed then and what was achieved; or not achieved and the reasons why nothing positive happened.

The reason for this request is simple. The NEW YORK TIMES in a recent editorial all but accused the leaders of Europe and America of adopting obsolete economic policies. According to the globally respected newspaper, “The world has barely dug out of recession and the global economy is again slowing dangerously.

Most leaders [including Finance Ministers] seem eager to make things worse.” Nigeria’s Finance Minister, as a card-carrying member of the global economic management team, is a clone of those being accused; and she seems incapable of thinking out of the box to produce something new.

Granted the Nigerian economy had been growing at about 7.5%; but the greatest proportion had been contributed by oil and the wealth distribution pattern had become so inequitable as to leave most Nigerians living a life of desperation; while corrupt public officials continue to flaunt their ill-gotten wealth. Only two things are guaranteed to occur as a result of fuel subsidy removal.

First, inflation will substantially reduce purchasing power for the majority – driving more below the poverty level. Second, public officials will have more money to steal – ensuring they get fatter while other Nigerians starve.

The safety nets, which the Finance Minister mentioned, as inducements for support of her policies, might never materialise. Nigeria’s history of the last 51 years is our guide. The British chastised our people with whips, and we complained, Nigerian leaders have been chastising their own people with scorpions and Dr Okonjo-Iweala, during her first tour of duty as Finance Minister, did nothing to alleviate the suffering.

From what we have heard so far, she appears set once again to serve the masters and add to the burdens of the masses. This time, she faces a stiff opposition; mainly because she cannot innovate at a time when fresh ideas are badly needed. Pity!

Napoleon did not start out as a loser; otherwise, he would not have been Emperor of Europe. The younger Bonaparte was the master of the surprise attack which destabilised the enemies. He started to lose battles and became an exile when he developed hubris and refused to adapt to changing circumstances.

Nigeria’s Finance Minister also has gone far in global economics. But, like Napoleon, she might be labouring under the illusion that her mere presence on the battle field is sufficient to guarantee victory.

President Jonathan, who does not know when to stop when it comes to hyperboles, also contributed to the hutzpah, a Hebrew word for unmitigated gall, by the announcement that made her Senior Prefect Minister. So she might feel indispensable; but that is only to Jonathan.

She would have helped herself and the government’s case better by leading with the incentives which might enlist mass support. For a start, the Federal Government ran through over N30 trillion in twelve years with little to show for it.

She was part of the conspiracy which created the illegal excess Crude Oil Account from which $13-16 billion was withdrawn without trace. She has a responsibility to tell us how the money vanished.

Despite repeated assurances, NNPC refinery Turn-Around-Maintenance, TAM, had not been carried out on schedule allowing massive importation of fuel by a cabal with the active support of the Presidency. The Bureau of Public Enterprises, BPE, virtually gave away public properties and Federal Government accounts have not been audited for years.

Nigerians would have appreciated a complete account of expenditures in the past twelve years and recovery of stolen wealth before anyone can ask them for more sacrifices—which will be the next fruitless appeal.

But, like a physically challenged singer, who knows only one tune, our Finance Minister has only one answer to all our problems – fuel subsidy removal. Waterloo, Greece and Egypt are closer than she thinks. That is the lot of generals and former Air Force officers who go to battles with only the same battle plan every time.


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