By TIMEYIN EJOOR
There have been debates in recent times on the true state of the nation’s finances. While some economic experts say the nation is broke as a result of government profligacy and the several distortions in the economy, others, particularly government officials, say there is no such thing.

They believe what we have presently is insufficient funds available to government to carry out its statutory duties. The debate reached a crescendo last December when President Goodluck Jonathan in a media interview restated the fact that Nigeria is as buoyant as ever.

He said the decision to increase the price of petroleum products (they prefer to call it deregulation) is to make more money available to government to provide infrastructure. He therefore reiterated that those, particularly political opponents, who say the country is broke were nothing but mischief makers.

It is difficult to fathom reason why government does not want to admit it is broke. The truth is that the nation’s economy in real terms is in recession, not just broke. All social indicators show that all is not well with the economy, and most of the ills are self-inflicted.

Figures being thrown at us in the 2012 budget and CBN analysis of monetary operations are to say the least ambiguous. They say the economy is expected to grow by about eight per cent in 2012 while inflation is in double digits and unemployment a frightening figure of 24 per cent of the population, one of the highest in the world.

In simple terms it means that a quarter of the working population made up adults between the ages of 18 and 60 years are out of job. In real terms, the figure could be in the range of about 30-40 million Nigerians being jobless. Herein is one reason for our current social malaise, if you need one.

The CBN further announced recently that it would keep lending rate at 12 per cent which translates into continued high cost of funds. Simple economics dictates that in a regime of high lending rates, investment takes a dip. Simply put, it means cost of doing business remains high.

It therefore means many industries; already battling with several socio-economic travails, may produce below capacity. This is further compounded by the high inflationary trend occasioned by the recent hike in the cost of petrol by fifty per cent.

I am wondering where the expected growth is coming from and indeed where the seven per cent growth recorded in the last financial year came from. I am talking of real growth, not that in the minds and books of government.

I don’t know if the government is comfortable with the all-time low productivity in the manufacturing sector. Many have in fact closed shop because of the unfavourable operating environment, particularly as a result of government’s policy inconsistencies.

The foreign exchange regime is a typical example. Even though the CBN has tried to put a cap on the rates, it is almost impossible for any business to speculate on same in the course of the financial year. This makes nonsense of planning.

Where is the expected growth when a group of Nigerians up to the total population of Ghana is not contributing to growth?

Where is the expected growth when over ninety eight per cent of GDP is still from crude oil? The Minister of Finance and coordinating minister of the economy, Mrs. Ngozi Okojo-Iweala said last week that the ‘government will provide about 74,000 jobs in 2012 from the SURE scheme.

Is this all the government can do to address this major economic problem? I am not a little disappointed in that kind of figure, particularly coming from someone of her pedigree. I think she is getting ‘sucked’ by the Nigerian factor.

I expect a more holistic approach to the issue from the former World Bank boss. In fact, the government should not brag that it is providing jobs as what currently obtains is merely giving monetary support to a few jobless individuals to set up businesses that are not monitored for performance.

What government should be doing is providing the enabling environment for small businesses.
These are the growth drivers of many economies which have witnessed some real growth in recent times. Their aggregate employment figure is what can be targeted over a period of time.

The enabling environment is for government to protect these industries from unfair competition; particularly from imports, provide low-interest funds and infrastructure needed to reduce production costs. A situation where businesses provide basic things like water, power, and roads for their operations is a hindrance to growth.

The current trade liberalisation policy of government introduced some years ago needs some adjustment. The way it is currently being implemented has sent many cottage and midsize businesses into oblivion. Despite the huge sums invested to improve infrastructure necessary to sustain cottage industries, little or nothing has been achieved.

Electricity is still as epileptic as it was ten years ago, if not worse. I have often said that until government reviews the inflow of electric generators from abroad, the cartel which brings in same will never make regular power supply a reality in Nigeria.

Maybe we must agree with the president that the federal government is not broke. Indeed a nation that earns no less than 100 million dollars daily from crude oil sales cannot be broke. What currently obtains is the inability to allocate funds proportionally and dispassionately.

Recurrent government expenditure remains a whopping 85 per cent of annual budget, leaving only 15 per cent for capital spending. So, how then does the government expect to stimulate the economy?

How do you explain a situation where the government in its wisdom decided to make provision in the 2012 budget for the purchase of two brand new aircraft for the Presidency at a cost of about N24 billion? Didn’t the National Assembly approve same for the Obasanjo administration a few years ago?

Aircraft is not an automobile that you change every four years. It is wrong for every new president to embark on a new fleet even if truly Nigeria is not broke. Unfortunately, our taste for luxury is inversely proportional to our capacity for productivity.