A constant reader of this column has politely asked me to point out the difference between the Transformation Agenda of President Jonathan on the economy and my own often repeated but seemingly crude phrase of commonsense economics.
Another reader impudently drew my attention to the recent interview by “Thisday” of the Minister for Economic Coordination and Minister of Finance, our hard-working Dr. Ngozi Okonjo-Iweala.
Infact, I have the greatest respect for the Minister of Finance and the greatly endowed talents that constitute her economic team. Also, my faith in the economic transformation agenda of President Jonathan remains unshaken. As laymen would say, many roads lead to the market.
Since 1960, all leaders (civilian-military-civilian) have been engaging in the pursuit of economic prosperity and political stability but without qualified success. This assertion, however, does not imply dismal failure or lack of some visible signs of progress.
For the avoidance of doubt, I read and understood clearly our Coordinating Minister‘s analysis. According to the hard-working Minister of Finance, “our economy is strong, with Vulnerabilities”. I would agree with her that the fragile Nigerian economy is strong (going by the elegance of the statistical figures), but there are numerous challenges or “vulnerabilities” as clearly defined always by the influential Dr (Mrs.) Okonjo-Iweala.
It looks as if we are now familiar with some salient facts of the economy. The growth rate (GDP) for 2013 is estimated at 6.75 per cent, second only to China (7%), but better than Europe (less than 3%); fiscal deficit is 1.8 per cent of GDP; Inflation has fallen to 8.4% from 12%; foreign exchange reserves rose to $47 billion from $32 billion; foreign debt and domestic borrowing are 2% and 17% of GDP.
The foreign exchange stability is assumed alright at the rate of N155-N160 to 1 US$. These impressive figures should be enough to convince analysts that the economy is really strong (by our standard), if it is remembered that the daily crude oil production is about 2 million barrels.
The many challenges of the seemingly sound economy have been carefully noted and efforts are on to find solution. If many analysts are baffled by the prospects of an economy growing at a fast rate of 6.75% and yet carrying about 30 per cent unemployment, Dr. Okonjo-Iweala dwelt on Housing and Agricultural transformation measures to impact positively on employment situation. It should however be mentioned that the Housing boom with the (luscious estate) was based on low mortgage rates.
The high exchange rate which has been described as “stable” has tended to distort domestic price level, make Nigerian products more expensive and less competitive in the world market. At the same time, higher cost of domestic funds has restricted the growth of domestic manufacturing industry while at the same time, affected private initiatives.
The lamentations of the Finance Minister and many Nigerians hinge on the problems of a faster rate of growth, low value of the naira and high rate of lending in a sad condition of large-scale unemployment and deepening poverty, inspite of several fiscal measures to sustain home production.
The greatest problem of the moment seems to be the black gold (crude oil) which has become the mainstay of the Nigerian economy and the life-line of all tiers of government. If any bad thing happens to crude oil and gas production (God forbids), the lamentations would turn into tears of blood – a very serious threat to the political stability of the nation. If the economic salvation of the country lies in the continuous flow of oil revenue, then attention should be turned on how oil resources are managed.
Nigeria‘s oil revenue at the moment, is subject to many disabilities – volatability of price; increasing criminal activities of thieves; pipe-line vandals; corrupt practices of public officials and irrational subsidy schemes. These, according to many Nigerians, amount to gross mismanagement of oil resources.
An approach to sensible economics is perhaps what Dr. Okonjo-Iweala is thinking but on a longer-term period, but with short-term approach appearing a bit lazy and uncertain. Either a short-term or long-term approach would depend on a more sensible approach to the management of the economy.
As a former Head of Civil Service, Chief Allison Ayida once noted in his “Reflection on Nigerian Development”, “The way out is to evolve a new strategy involving less dependence on imports and the promotion of local manufactures and agricultural production. Oil revenue should be seen as providing the fuel for engineering the growth process.
If we can manage the domestic economy properly and efficiently, the external sector will gradually assume less importance and the Naira will find its level in the floating basket of currencies”. This is commonsense economics, leading to a lively and fully employed economy – with all hands available for producing enough goods to combat inflation.
The concept of sensible politics rests on responsible governance by the ruling party and equally responsible behavior by the opposition parties. Responsible opposition should not abuse the person of the incumbent President but oppose his programmes with alternative proposals.
A good leader should be the father of the nation, just and fair. His policy should appeal to the opposition and majority of the people alike. A “winner-take-all` attitude in politics would eventually lead to instability in a plural society.
To my surprise, the deportation of some destitutes to their States of Origin has received hostile reception in many quarters. Perhaps many writers have never tasted poverty or experienced destitution in their lives in or outside their states of origin. Some years ago, by luck I met my blood sister and her two children in a terrible living condition that kept me weeping profusely anytime I remember the sight. My immediate reaction was to relocate the unfortunate victims within a week at my own expenses.
The exercise was a complete success and the children are eternally grateful for the rescue from penury and family shame. It is better to be our brothers‘ keeper than to become constitutional lawyers for the right of the destitutes.