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Nigeria’s economic house has fallen under Buhari

By Dele Sobowale

Nigeria, Buhari

There are no desperate situations, only desperate men —Joseph Goebbels, 1897-1945; Hitler’s Propaganda Chief. VANGUARD BOOK OF QUOTATIONS, VBQ, p 38.

 

AT the time of writing this article, the President of Nigeria is on a visit to London advertised as “private”. Legally, Buhari is entitled to private visits to anywhere on earth; he might even go to the moon or planet Mars; I would have been the first to applaud the landing of a Nigerian President on Jupiter for a private visit.

However, there is something unsavoury about a “private visit” which for the most part is financed from the public purse. The Presidential plane and the pilot and cabin crew which took him to London would earn estacode. The parking fees, which will not be waived by London’s privately-owned airports, will also be settled by the Federal Government of Nigeria, FGN. That calls into question the often-repeated claim to integrity. The ultimate test of honesty is money kept in one’s care; the test of integrity is power. A situation in which any government official spends public funds for private purposes devalues his claim to honesty.

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To use public property, e.g. a jet for private trips without paying for it, just because one has absolute power, reveals deficit of integrity. I sincerely hope that President Buhari will pay to the treasury the cost of hiring our jet to go on that private visit in London. I wish him safe trip in any case. Since journalism is the first draft of history, there will be a record of what happened irrespective of what Buhari does on this matter. I strongly believe the President and his advisers have got him into an ethical/economic dilemma on this issue. Wisdom is needed.

That is only a prelude to the first part of this two-part series of essays designed to alert my fellow citizens to the fact that while Buhari was in London, the Central Bank of Nigeria, CBN, was inadvertently passing a “death sentence” on the Nigerian economy. That was not how the CBN put it. But, Mr. Godwin Emefiele would be risking his job if he reveals bluntly and publicly what he and his colleagues at the topmost bank already know. Thank God, there is no Emefiele at UniJankara; we tell you the barefaced truth. What our fellow citizens do with what we tell them is their own business. But, remember this: we have never been found wrong in our predictions. We have taken on professors, ministers, chief economic advisers, etc. on very crucial matters – vision (actually illusion) 2020, banking consolidation, annual budgets, power projects, capital market, etc.- and we have been proved to be right every time. This one will not be an exception. I weep for Nigeria.

FG records N3.05tn fiscal deficit in eight months — PUNCH, November10, 2019. p 11.

Most Nigerians being economic illiterates, including most columnists, might have read the report by Ifeanyi Onuba and quickly turned the page. To them it would have meant nothing. That is understandable. If a variable in a complex equation on how to reach the moon is quoted, I also would have turned the page. It would mean nothing to me. But, as an economist, I can recognise economic disaster when it is rendered in just one sentence. This is one of them. I rushed to verify if the report was true. No need to be caught spreading false news and giving the apologists for government a minor error to use to discredit the entire article and its predictions and warnings.

First, what the CBN has reported merely confirms the position taken on this page about the 2019 budget. Permit me to start with comments made before the budget was presented to the National Assembly. The article was written in the second week of last year. Below are the first three paragraphs.

“Good day Uncle Dele. This is the first week of December. The 2019 Budget is yet to get to the NASS. They would soon proceed on Christmas holidays. It’s not even known when it would be presented! 2019 is election year. Most of them would be involved. Who are the policy makers of this administration? What is in their brains? Saw dust? When and how did we offend them? Is this still being caused by GEJ and PDP? Who did we offend in this country, Uncle?”

That lamentation of a totally frustrated Nigerian arrived just as I was getting ready to throw in the towel on writing about the Buhari administration and the absolute neglect of all the measures that would make Nigeria a great economic power and reverse the trend towards deeper poverty and deprivation for our people. Make no mistake about it, the average Nigerian would continue to get poorer as long as we have Buhari and his economic advisers in government.

The message summarised so well many of my thoughts and those of leading economists worldwide about Nigeria that it has to be quoted verbatim. Nothing needs to be added to the charges against the Buhari officials which is steadily but surely destroying Nigeria’s economy. Four more years of these people and we will certainly become the world’s worst basket case and a failed nation.

As we are entering the last six weeks of the year and we read the “fiscal obituary” posted like the handwriting on the wall, every honest Nigerian should ask if the executive and legislative branches of government have been patriotic and honest with Nigerians. The President presented a budget that was totally unrealistic and the National Assembly, NASS, a collection of Nigerians presumed to love their compatriots , debated the package and approved it. Eight months into the year, Nigerians are now being told that the budget was a waste of everybody’s time. In fact, it is worse than that. The results of implementation of a budget which was worthless ab initio have now set the country back several years. Several catastrophes will befall us consequentially.

With the deficit at N3tn in eight months, simple projection will suggest that by year end the deficit will amount to N4.5tn. In plain language, the FG would have spent N4.5tn more than the revenue it was able to collect. Even a dunce knows that a country cannot continue to spend more than it earns, anymore than an individual or organisation without getting into financial problems. To cover up for the irresponsibility of its revenue collecting agencies and officers, the Federal Government had adopted “Borrow-and-spend” fiscal policy. And, it has been reckless.

More frightening about this government is the penchant for its officials to live in a world of fantasy. They deliberately ignore facts that are available to them for planning and budgeting whenever those facts are unfavourable. By the same period last year, it was clear that the Federal Government was recording an unfavourable variance in its revenue collection, so alarming as to preclude any possibility of achieving the revenue target for 2018. Recently, the Minister of Finance announced that only 55 per cent of the 2018 revenue was eventually collected. The result was not much different for 2016 and 2017. A competent and serious government would have asked a very basic question before putting together the moribund 2019 budget. Why are we failing so disastrously in generating the revenue we need each year? Nobody in this government apparently has asked that question, to my knowledge. And now the NASS is again debating the 2020 budget which is nothing more than a cooking pot full of illusions. As in 2016, 2017, 2018 and now 2019, the revenue estimate will never be achieved – for obvious reasons…..

To be continued. 

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