NIGERIA is in a recession. It is commonly agreed that we did not get here by sprint. Rather, the journey was more of a long distance race in which every manager of the economy, past and present, is guilty as charged.
In times like these, people must resist the urge to be tied down by the allocation of faults. Neither should a genuine Opposition begin to rejoice at the country’s down-ward trend. After all, everyone is involved. The breadwinner of the family cannot be struggling in the intensive care unit and some members of the family are in the waiting room, rejoicing at the prospect of their patriarch giving up soon.
President Muhammadu Buhari summarises our current predicament most succinctly: “We got into trouble as a country because we did not save for the rainy day. Between 1999 and 2015, when we produced an average of 2.1 million barrels of oil per day, and oil prices stood at an average of $100 per barrel, we did not save; and neither did we develop infrastructure… Suddenly, when we came in 2015, oil prices fell to about $30 per barrel….”
It dawned on the Buhari-led Administration early enough that it was inheriting a terrible economy. Even as far back as Prof. Charles Soludo’s days as the Governor of the Central Bank of Nigeria CBN, the free fall of the Naira had already begun in earnest, to the extent that Soludo seriously advocated that to give meaning to the nation’s currency at the time, a number of zeros have to be knocked off the front of the Naira such that say N1000 would look like N10 while N100 would look like N1. His suggestion at that time would not have meant that the Naira was too strong. Rather, it was a clear pointer to the fact that the Naira would soon be worth less than the paper on which it was printed.
We have maintained, perhaps with monotonous regularity, that Sanusi Lamido Sanusi ran the CBN like a Republic within a Republic. Indeed, the collapse of the Naira today is doomsday foretold, beginning from that era. Shall we take a small peep into some of Sanusi’s sordid affair?
In about 63 “intervention projects”, mainly in Northern Nigeria Sanusi turned the CBN into a Father Christmas of sorts by doling out some N163 billion from public till, without any form of legislative approval and authorisation, in utter defiance of the provisions of Section 80(1) and 80(2) of the 1999 Constitution.
In August 2009, the CBN under Sanusi’s watch pumped N400 billion of public fund into bailing out Afribank, Intercontinental Bank, Union Bank, Oceanic Bank and Finbank without recourse to any legislative approval.
In 2011, CBN allegedly claimed paying N511 million, N425 million and N1 billion to Emirate, Wing and Associated Airlines respectively, for currency distribution nationwide. While Emirate had no charter service; Wing Airline was not even registered in Nigeria; and Associated Airline had a total turnover of less than N1 billion in the entire year!
2013 was the year that N38.23 billion developed wings and disappeared from the CBN till. The missing money was alleged to have been paid to the CBN subsidiary, MINT, but it didn’t get to its destination. The CBN under Sanusi’s watch was plunged into the most reckless squander-mania.
If this much could be revealed by the audit of the CBN, one can imagine what could be happening in places like the NNPC and other government establishments, which have not been audited in years. Is anyone still surprised that we got into this deep trouble?
Another important area we should be looking at is the Presidential Fleet. The situation before us is precarious. Nigeria cannot afford to keep maintaining the largest Presidential Fleet in the world. At the last inventory, our Presidential Fleet of 10 aircraft was gulping some N9 billion annually in maintenance cost.
All the parts needed for the maintenance are imported. Given the fact that the aircraft are ageing; and the prohibitive cost of procuring the spare parts at around N450/$, we have no reason to disbelieve that the cost of maintaining the Presidential Fleet has risen astronomically. This is unnecessary.
This is one area where the sale of government asset could be of immense advantage – selling the assets to earn money for development; and shedding weight to cut down on unnecessary maintenance cost.
The administration must also realise that extraordinary situations call for extraordinary actions. A recession is usually fought with spending and more spending; and in most cases, it may mean that you have to borrow to reflate the economy.
This is where real change is required. Knowing the President’s conservative slant, he may not even spend 50 percent of the already approved appropriation. But if recession must go away, this is not the time to be tight-fisted. By now, the President should be seeking approval for more spending.
He must now present a Bill for budgetary authorisation and approval to reflate the economy. Such expenditure must be directed at massive infrastructural development funded by deliberate borrowing.
The US got out of the Great Depression by such aggressive measures. That was when they first built extensive highways connecting States. That way, they created jobs and put disposable income in the hands of otherwise jobless Americans. This is the way to go.
The fight against corruption must be given added impetus. We have argued elsewhere that the President needs emergency powers to carry the fight through. The penultimate week, he was at the United Nations, pleading with them to put pressure on Western nations to return Nigeria’s stolen funds kept in their banks.
This is not the best time to hoard money. The Western nations are also interested in how wisely we are investing the recovered loots; and how we are dealing with the looters. By now, the news should be everywhere, how some of the looters are languishing in jail.
Certainly, this recession, too, shall pass away but not by turning the other cheek!