By Adisa Adeleye

Many optimists who are just chewing before digesting the beautiful economic blueprint (adorned in its elegant presentation with unassailable statistical figures) by the Finance Manager and Minister for Economic Co-ordination (what a romantic name!), Dr. Ngozi Okonjo-Iweala in her answer to the 50 Questions raised by members of the House of Representatives might be a bit confused on another story about the danger facing the economy.

As usual, the outspoken Finance Minister has warned about the danger faced by the economy with the depletion in the Excess Crude Oil Account (ECA).

The Excess Crude oil Account, a supposedly illegal entity, was set up by former President Obasanjo (Dr. (Mrs.) Ngozi Okonjo-Iweala was his Minister of Finance) to provide against future uncertainty in world crude oil prices.  The difference between the actual sales price of a barrel of crude oil and the budget bench-mark price is captured in this Account.

The idea of saving a bit for the ‘rainy day‘ from total proceeds of crude oil sale was considered a wise economic step, though not seen as such by State Governors who insisted and still insisting that all items of revenue must first go into central pool as recognised by the Constitution.

It looks as if the Excess Crude oil Account has come to stay and from it, States are normally funded during periods of falling of oil revenue.

If as it has been reported that Crude oil Excess Account has been depleted from $8.86 billion to $2.5 billion within a short time (without any reduction in oil revenue as a result of change in World price of Crude oil), then, there is justification for concern.

The greater concern is the outburst of State Governors anytime there is a short-fall in the monthly allocation from the pool which always gives the impression that the economy is sick.

As much as Excess Crude oil Account is desirable, it does not make good economic sense to me that savings from oil receipts should be ‘ware-housed‘ for future consumption by States.

Since Crude oil is a wasting asset, any excess money realized now should be used for infrastructural developments today and make tomorrow better.  The culture of savings which is regarded as a virtue in developed economies could be a vice in developing nations with dilapidated infrastructures and shortage of capital.

The lamentations of the Finance Minister should not be on the depletion of crude oil excess revenue (which is meant to be shared to satisfy the gluttonous stomachs of the States) but on the shortage of investment capital for infrastructural developments.

In a veiled reference to the deepening poverty in Nigeria in spite of ‘economic growth‘ of over 6.5 per cent in 2013, Dr. Okonjo-Iweala remarked that, ‘In Nigeria, we are growing fast, but that growth has come with increasing inequality and lack of inclusion of certain segments of the people‘.  In fact, to me, Nigeria has become a divided country; a country of glittering wealth and one of abject poverty.  It is not a surprise that many Nigerians out of frustration, desperation and idleness have found fulfillments in insurgency, armed robberies, kidnappings, assassinations, ritual killings and political thuggeries.

The glory of the Nigerian economy which is manifested in its robust and majestic growth (on paper) is beclouded by paucity of ideas on equitable distribution of income and employment generation, under positive leadership.

A good government of any nation is armed with both fiscal and monetary policies to make living pleasurable and life abundant for the people.  A judicious combination of both should ensure prosperity and political stability of the nation.  Where economic policy is weak and ineffective, corruption and political instability will certainly prevail.

The task before the present Federal Government, according to many analysts, is simple.  The economy appears strong (on paper) but its direction and management need firmer grip.  It is useless to talk about macro-economic stability in an atmosphere of mass unemployment.  A tolerable rise in prices could be accepted for economic growth which goes with increase in employment.  When a tolerable level of employment is reached, rise in wages could follow rise in productivity.

The gospel truth is that if the economy is pushed up to a fairly level of full capacity, a satisfactory growth rate is expected.  A dormant economy may not respond positively to a tight monetary policy being forced on the country by the Central Bank Governor and the Committee of ‘Classical‘ economists in a modern day business environment.  As noted in the Central Bank‘s Report, ‘The quantitative easing of measures by the US Federal Reserves had helped to restore momentum to the US economy and also contributed to the improvement of Euro-zone economy?  What is the economic justification for a tight monetary policy for a country like Nigeria with a heavy pool of idle but dangerous hands?

APC‘S TALL ORDER

The seemingly innocuous order of APC leadership to its ‘Honorable members‘, to block Executive action, including the 2014 Budget in the Parliament looks ‘dishonorable‘ to honorable citizens who have votes.  It looks like giving the ruling party (noted for lack-luster performance) an opportunity not to perform.  Any fresh idea from the APC on how to rule Nigeria better than what we are seeing now?

For example, what is the answer of APC to the statements by the Finance Minister that the growth of the economy is restricted to a certain class and not general?

Nigerians would also like to know any alternative policy to a tight monetary policy presently being pursued by the Central Bank which is affecting industrial growth and employment when what may be necessary is a cheap money policy, efficiently managed.  We should by now be treated to the difference between government and the opposition in economic orientation before 2015.  It may be necessary to know the APC‘s policy on macro-economic stability with full employment.