John omachonu
“In recognition of the importance of critical infrastructure in economic development and the quest of this Administration to leave a lasting legacy, we have implemented high-impact projects across the length and breadth of the Country that meet the yearnings and aspirations of Nigerians.”
The above was part of the speech delivered by President Muhammadu Buhari at the Ministerial Performance Review Retreat in Abuja on October 17, 2022.
Buhari had told his audience in the preceding paragraphs that an exercise like the retreat would ensure that ‘we maintain the right trajectory before the end of May, 2023 in order to achieve the promises we made to the Nigerian people, at the inception of this Administration.’
In what has been regarded as part of his scorecard, the president in self appraisal further said, “I am glad to note that, over the past three years, ministries have continued to navigate the challenging times to ensure the implementation of Policies, Programmes and Projects in the Ministerial Mandates signed by Ministers and Permanent Secretaries in 2019.
The implementation of the laudable policy thrust of this Administration is periodically tracked, reviewed and analysed by the Central Delivery Coordination Unit through quarterly performance reports of the 29 Ministries including the Office of the Head of the Civil Service of the Federation.
Through the innovative delivery initiative put in place by this Government in 2019, I have continued to receive weekly updates from the Secretary to the Government of the Federation, prepared by CDCU on the implementation of the Ministerial Mandates. So far, the reports show that we are making remarkable progress and on track to reach most of the deliverables in the Ministerial Mandates against the benchmarked targets for 2023.
The objective is to ensure that we complete and deliver on our flagship projects and programmes, promote sustainable economic growth and development, as well as improve the living standard of our people.”
President Buhari has, by his statement, demonstrated to Nigerians and the world that he did not make rhetorical statements at the retreat but that it was based on collective actions of the various coordinating units in building high impact infrastructures that, according to him, have left Nigerians better for their votes.
Metrobusinessnews.com (MBN) spoke with some citizens and the general consensus is that building infrastructure alone does not go near satisfying the yearnings and aspirations of the citizens.
While credit must be given to this administration for some strides made in infrastructural development, it has not translated into foods on their tables.
To an average Nigerians, not until prices of food items come down, value of Naira is appreciated enough to feel reasonableness in terms of purchasing power, unemployed youth is gainfully employed, they can sleep with their eyes closed and as well being able to do inter and intra state movements, then, life would still remain in the Hobessian state of nature.
Hobbes argued that the state of nature is a miserable state of war in which none of our important human ends are reliably realizable.
The philosopher further postulated that happily, human nature also provides resources to escape this miserable condition.
This is what Nigerians are agitating and concluding that the roads, rails, bridges, among others alone do not improve their standards of living.
Hobbes’s description of the state of nature proposes that what human beings want above all is to preserve their lives and their goods, and what they fear above all is violence at the hands of others. This desire to preserve ourselves against the threat of violent death is the core of Hobbesian psychology.
In situations where some farmers cannot go to their farms for fear of violence by mostly, non state actors, would equally make provision of infrastructure meaningless.
Besides the lack of Synergy between the organs of government that frustrated its developmental efforts in some cases, even as alluded to by vice president Yemi Osinbajo, the ravaging floods that have displaced and destroyed thousands of people and properties as well as over six hundred lives lost so far and, particularly, the Russia-Ukraine war which has become an albatross to us rather than a blessing are part of challenges bedeviling this administration .
On the economy, Buhari had this to say, “we have witnessed seven consecutive quarters of growth, after negative growth rates recorded in the 2nd and 3rd Quarters of 2020. The GDP grew by 3.54% (year-on-year) in real terms in the 2nd Quarter of 2022. This growth rate represents a sustained positive economic performance, especially for the Non-Oil GDP which fell by 4.77% in Q2 2022 against Oil GDP that grew by -11.77%.
Most Sectors of the economy recorded positive growth which reflect the effective implementation of the economic sustainability measures introduced by this Administration.”
Again, the argument by most Nigerians is that, this does not hold water because growth without development is meaningless.
Bismarck Rewane, Chief executive officer, Financial Derivatives Company, in the current edition of FDC Bi-monthly Business and Economic Bulletin, October 18,2022 agreed that the recent flooding in Nigeria’s top 13 food-producing states may have pushed food inflation higher as supply shortages ensue despite the harvest season.
The general increase in commodity prices climbed to 20.77% in September, according to the nation’s statistics Bureau Agency (NBS).
“The major culprits remain the flooding as well as exchange rate pass through effect (N743/$ at parallel market), money supply saturation (N49.3trn), and high logistics costs (diesel price up again to N820/litre).
The combination with other structural factors affecting Nigeria’s food production will definitely lead to an economic crisis.
In response, consumers could resort to panic buying ahead of the festive season.”
He further alluded to the fact that federal government coffers are running thin.
“And unlike what we are witnessing, increasing our external and internal borrowing shouldn’t always be the answer to fix our ever rising fiscal deficit that is now N11trn according to the 2023 proposed budget. A possible solution to address this revenue problem is to improve tax collection.
Already, Nigeria’s tax-to-GDP ratio is critically low (6%-8%) far below the 15% tax-to-GDP ratio recommended by the World Bank and IMF for developing economies. A bright spot for the FG is VAT that raked in over N1.53trn for the FG in 2020,” Rewane said.
In less than five months, Nigerians will head to the ballot box to decide the new fate of the country.
But, according to Rewane, “Before then, it’s imperative to repeatedly take a microscopic look at the country’s economic state and remind policymakers of the hard choices to be made for a better future.
Of the many decisions, taming inflation, reducing debt, restoring investor confidence and reducing naira volatility are top priority.”
At the same event, Osinbajo eulogised Buhari for great achievements in the areas of infrastructure, social investment, digital economy, among others.
In retrospection however, Osinbajo acknowledged some issues that have been agitating the minds of some analysts, which according to them, may have contributed to less satisfactory achievements, at least, based on the campaign promises of this government.
Vice president, in what analysts regard as a no-holds-barred and forthrightedness said:
“Permit me to mention three challenges that we must confront going forward.
The first is the synergy between fiscal and monetary policy. The failure of that synergy has led to unnecessary drawbacks in our economic performance and planning.
What imports are eligible for foreign exchange must agree with the fiscal ambitions for manufacturing and industry.
It cannot be the province of monetary policy alone or the province of fiscal policy alone.
“The second is our exchange rate management, and this continues to be an issue.
The exchange rate of the naira to convertible currencies continues to face significant downward pressures because demand substantially outstrips supply. That is just the reality.
On one hand, we have tried demand management and rationing, which has not really worked because fixing the price while the parallel market reveals a massive arbitrage merely creates the opportunity for massive rents.
It will also compound the backlog of remittances for foreign businesses that want to repatriate their legitimate earnings.
The discussion that we must now have and going forward is how best to manage the situation by finding a mechanism for increasing supply and moderating demand which will be transparent and will boost confidence.
I think that a more market-driven approach will be best, some price discovery within the context of a managed float is certainly required.
Some efforts at controlled price discovery that had been made in the past include the Foreign Exchange Market (FEM), Interbank Foreign Exchange Market (IFEM), various iterations of the Dutch Auction System (DAS), Wholesale Dutch Auction System (W-DAS), Retail Dutch Auction System (R-DAS).
While they may not have been perfect, it would appear as if the rules were clear and there was relative stability.
When people know how they can access foreign exchange competitively, this will boost confidence and inward flows will increase.
“My third issue is that we must focus on value addition and productivity in our economy. This happily is well articulated in our Medium Term Economic Plan 2021-2025.
We must in doing so, loosen the generalised restrictions on trade.
Blanket import restrictions are a dampener on economic activity because a lot of items that might be needed in the manufacturing process might be affected with a consequent negative impact on value addition in the economy.
Importation itself is not the problem, it is what you import and what you do with it.
It is the value added that matters. This is how jobs and wealth are created.
Many countries of the world that manufacture are huge importers, and they import far more than Nigeria.
Let us take the example of garment manufacturing. Bangladesh the world’s leading garment manufacturer does not produce most of the cotton it uses. It only grows 2% of its annual cotton requirement.
In 2019 Bangladesh imported $11.8 billion dollars worth of textiles and apparel while it exported $37.94 billion dollars worth of garments in the same year. It is clear that there is nothing wrong with importation if you are going to add value and will export. I think that we should focus on doing that.
“Finally, a valuable lesson that we must draw from our efforts over the life of this administration is that coherence and coordination are essential for effective policy implementation.
It is important for government policies to be coherent otherwise different parts of the government could end up adopting diametrically opposed policies.
I think that one of the very important steps that Mr. President has taken is the establishment of the Delivery Unit in the Presidency.
I believe we have done well with regard to using planning as a form of promoting coherence in policy-making and implementation.
This is reflected by the adoption of the Economic Recovery and Growth Plan, the Economic Sustainability Plan in response to COVID-19, the National Development Plan 2021-2025, and ongoing work on Nigeria Agenda 2050.
The broad consultative processes involved in drawing up these plan documents help improve understanding of government intentions and direction even by public servants but certainly also by the private sector and the general populace. Planning also means that there is a process by which incompatible policies are re-aligned and re-positioned.
“Closely related to coherence is coordination.
It is important to coordinate the implementation of government policy very closely. Apart from the benefits of several viewpoints being taken into account, the coordination of economic activity enables key economic managers to know how to help their colleagues achieve common objectives.
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The truth is that working in silos or going it alone can have deleterious effects on policy implementation.”
It is obvious that Nigeria has enough crisis on its hands, not minding conflicting signals from some major government actors like the finance ministry on one hand and between it and CBN on the other hand.
Recently, the Debt Management Office was dragged into it and in the ‘spirit of comradeship’, decided to defend Zainab Ahmed, finance, budget and national planning minister with regards to her recent interview with Bloomberg where she allegedly said Nigeria was considering restructuring its debt and extending the repayment period of its credit obligations, and appointed consultants to advise the government as it faces a rising debt-service burden.
Few hours after the said interview, its negative impact on Nigeria’s Eurobond was felt as the holders became agitated, over the said decision to restructure her debts, because of the negative consequences on their holdings.
Again, the scenario does not augur well for a country like Nigeria, where the government with less than five months to go, would stir the International markets with all manner of information that may not be necessary at the time.
