Nigeria celebrated 56 as a nation last week and what else but to assume the toga signifying manhood that depicted ancient Rome and to convey anticipatory grandeur. The anniversary called for national introspection on how well we managed our resources over the decades. In sixteen months of President Muhammadu Buhari’s political reincarnation we slid into recession and on the verge of a savoury depression.
Petroleum had contributed about 95 percent of export revenue and a significant percent of fiscal revenue, with whimsical sharing formulae severally devised for the three tiers of government. Nigeria had the first petrodollar windfall from oil embargo in the aftermath of the Yom Kippur Arab-Israeli war of 1973 called the oil boom. The stupendous petroleum fund generated as working capital to diversify the economy has become ruination.
In a topsy-turvy affair the Nigerian cash dispenser has been in the hands of the privileged class that exude profligacy. We live the life Irish playwright George Bernard Shaw succinctly captured: ‘’the surest way to ruin a man who doesn’t know how to handle money is to give him some.” The mutual money illusion not laboured for, drained off and floundered in millionaires and billionaire’s portfolios with President Buhari chasing about US$150 billion in other countries of the world.
Unprecedented sleaze through embezzlement and mismanagement rent the air from a cultivated culture of tubing to siphon petroleum funds. With mansions, state actors protection and bulletproof vehicles, long convoys of expensive cars and bloated overhead accounts in public offices, we live in prodigality and riotously too. It is difficult to fathom the thievery from the Nigeria advantaged class that maintains false social status and accumulates for sometimes three generations down the line.
We have not considered national assets as treasures to nurture, preserve and cherish. With low crude prices in the international market, they contemplate giving us conks through rummage sales of patrimonial assets. Many government assets have been run to become non-performing assets; or waiting to be sold or tripped with reckless abandon. Preferred investors are mostly accessories after the fact to non – performing assets sold to them.
Premeditated arguments are that governments are not good managers. Government is not a good manager and we ask who the government is; government manages our economy. Many private investments have been run down over the years. On a regular basis, private banks have been mismanaged in Nigeria. We seek Central Bank’s bailout to recover individual deposits that may not have been insured in mismanaged banks. The Abacha regime hounded failed banks chiefs, jailed many while others fled overseas to seek asylum in the name of persecution at home.
Privatization proponents are yet to come to terms that infantile managerial acumen and technical incompetence, the banes of our enterprises are not the exclusive preserve of government.
The recent calls for the sale of critical national infrastructures including refineries and the Nigerian Liquefied Natural Gas, NLNG plant to fund the 2016 budget came with its inappropriateness in selfish wrap-ups.
Be reminded that the NNPC wholly owned Eleme Petrochemical Company constructed at a cost of US$2.4 billion was sold in August 2006 at a paltry sum of US$215 million. A required turn around maintenance was what the preferred investor did to invite the then President Olusegun Obasanjo to commission the same project on the 12th of October, 2006. We lost that facility as a national asset.
Examine a few of the following listed and discover the common denominator. Sugar Companies; Nigerian Pulp, Paper Mills Jebba, Oku Iboku, Iwopin; Farm Settlements; Palm Oil Companies; Rubber Plantations and Estates; Forestry Reserves, Zoos and Wildlife Parks; Commodity Marketing Boards; River Basin Authorities, Dams, Water Boards; Steel in Ajaokuta, Aladja, Rolling mills in Jos, Oshogbo, Katsina, Iron ore in Itakpe; DICON; Petroleum refineries, Eleme Petrochemicals Company; Automobile assembly plants in Lagos, Ibadan, Kaduna, Kano, Bauchi and Enugu.
Also NEPA or PHCN; Airports, Nigeria Airways, Private Airlines; Nigerian Railway; National Shipping Line; Textile companies in Lagos, Kaduna, Kano, Aba, Asaba; Cement companies; NITEL/MTEL; Hospitality and Tourism facilities; Conglomerates; Banks, Insurance companies, Finance Houses, Community Banks, Peoples Bank; Media houses; National Stadium Lagos and other stadiums; Schools from primary to university. The list is endless. Studies show the few conglomerates still surviving are the Nigerian Breweries, Guinness, Coca Cola, 7 UP, Nestle, Cadbury, and Unilever and a host of others; they are foreign owned or managed.
The Buhari administration is going the neo-liberal economic model of structural adjustment programme, SAP introduced thirty years ago which sapped the people. The then military President Ibrahim Babangida in 1986 was convinced that SAP was the best way to go. President Buhari who resisted subsidy withdrawal was prevailed upon to take away subsidy whereas a take away of the fraudulent practices by genuinely rehabilitating the refineries would have solved the problem.
We relied on generated foreign exchange liquidity from crude exports which could not fund imported petroleum products today. From the Central Bank of Nigeria’s second quarter, Q2, 2016 report, the Federal Government spent US$6.09 billion on petroleum imports in the first six months thus putting pressures on Nigeria’s foreign reserves. By the third quarter, Q3 of 2016 the country slid into recession and could not raise fund to implement the 2016 budget.
The monetary authorities advised Babangida to devalue the currency by introducing the second tier foreign exchange market (SFEM). President Buhari faced the same blackmail and devalued the currency in the second quarter, Q2 of 2016 through floating exchange rate for the 2016 budget to be funded.
It is not conceivable that monetary authorities would bow to Bretton Woods’s institutions pressures for about 70 percent devaluation of the Naira when the only export commodity is crude oil. The same IMF prevailed on China not to devalue her currency to make other industrialised nations more competitive in markets.
With attendant inflation, it becomes easier for exchange rate manipulators to call for high interest rate which makes it difficult for genuine businessmen including manufacturers to borrow. The President however took swipes at the CBN by throwing them almost to the wolves on the current floating exchange rate that enabled market variables determine the value of the currency.
Coming to terms government can generate funds even at the short term from various non-performing oil mining leases, OML without selling critical national assets. The Nigerian Extractive Industry Transparency Initiative, NEITI Executive Secretary, Waziri Adio’s audit report submitted to the Nigerian Senate in June 2016 revealed the loss of US$9 billion in the lifting of crude oil. The loss includes under assessment, theft, inefficient practices, and US$1.7 billion still owed to the federation from the OMLs.
With no functional metering facilities in the various crude oil export terminals, we must plug it to stop ritual stealing. The President’s controversial “Change Begins with me” campaign should enlist sociologists and psychologists on why we primitively accumulate wealth for our greed.