" /> Managing a distressed economy and the hard choice before President Buhari (iii) | Hallmarknews
Published On: Mon, Oct 26th, 2015

Managing a distressed economy and the hard choice before President Buhari (iii)

Danger signals ahead

 

By CHRIS UCHE  |

Again Nigeria is treading a well beaten path in spite of all the expectations of change in the air. Sorry to be cynical and to spoil the fun of many people but from available evidence, this change may be a mirage and hope postponed. What can you say about the desperation to make former governor Rotimi Amaechi a minister, appointment of 91 standing committees in the House of Reps, Customs CG’s reversal of the rice policy and likely somersault in the auto policy? It is all confusing; and this is still morning, yet there are enough indications to predict the evening.
Our leaders are very predictable, so notoriously predictable in our predictability that anybody who has been around for any length of time in the country can fairly determine what will happen in public policy. This perhaps explains why virtually everybody in the country is an expert of some sort on public policy, because it does not take any serious intellectual rigour, deep insight and perspicacity to envisage and extrapolate government behaviour and public policy directions and outcomes.
A characteristic challenge of managing the economy in the past 30 years has been policy inconsistency and often the chasm between policy enunciation and actual implementation. Since my school days in the 1980s this was the issue; now close to retirement, this is still the issue. This is damning and close to what Charismatic Christians would call a stronghold; more so for a government that was elected on change platform.
Take our annual budgets for instance. Usually presented with so much gusto and beautiful appellations, such budget of change, budget of transformation, budget of consolidation etc at all levels of government, the outcomes are habitually disappointing. Some of our policies are the best crafted and developed and comparable to any other elsewhere, but they are often prepared to impress the gullible and not for any practical purposes  and without consideration to the political will of leadership and the capacity and altruism of the civil service.
Mention them – the National Development plans, Green Revolution, Home grown Structural Adjustment Programme, Vision 2010, Vision 20, 2020 etc. It is the same old story. In fact development scientists believe that the Second National Development Plan is one of the greatest policy documents to be prepared by any nation and could have transformed the country in the Singaporean fashion but it came to naught.
Issues arising from the ministerial screening and some government pronouncements provide sufficient cause for alarm. Some of the nominees such as Chief Audu Ogbe, Mr. Babatunde Fashola, Dr Ibe Kachukwu, and Mrs. Kemi Adeosun spoke eloquently and convincingly about a new economy that is capable of creating jobs, encourage local industry and manufacturing, focus on agriculture and food security, reduce recurrent expenditure, and interest rates, shore up the value of the naira and restrict importation of petroleum products, remove subsidy to attract investment in refineries etc. These are economic best practice in today’s global economy.
Now, contrast these statements with Col. Hameed Ali’s unbanning of rice import because of falling Customs’ revenue and the anticipated reduction in auto import levy which imposition has brought several car companies to begin local assembling. The 75 percent hike in car import charges is intended to revive the sector that could generate thousands of jobs, but the government would prefer to have money to spend for political appeal – the short term trumping the long term.
Last week, this column had argued that the only way to save this economy is to ignore the immediate short term pressing challenges and focus on the more fundamental long term problems with the potential to transform the economy on a sustainable basis. This is how we concluded:
“Managing a distressed economy requires paradigm shift and strategic long term approach. For an immediate and short term response, Interest rate should be crashed to allow business, particularly SMEs, borrow and invest to create jobs; inflation and exchange rates as long term element should be de-emphasised in the short term and subjected to market forces of demand and supply; import should be restricted through high tariffs to boost domestic production; quantitative easing is necessary to expand economic activity and revive production; subsidy should be removed to free resources for capital projects, and recurrent expenditure should be curtailed to raise capital expenditure”.
How can we produce local rice and change the habit of Nigerians from lusting after imported rice if we don’t limit its importation? How would the country attract investment into the down-stream to produce products if we continue to provide subsidies, which fixes price below market level? For the Vice President, Prof. Yemi Osinbajo to insist on keeping the refineries and subsidies is to put politics above economics and the outcome will be disastrous; that is the lesson of history.
It is politicization of economic policies that has ruined this economy, and APC, which was elected to change our bad and inglorious past, does not see the imperative for change in economic policy, apparently because it conflicts with its party manifesto. Nigeria is like a patient in coma; the first thing to do is revive it before determining the ailment. The manifesto is a political document that did recognize the challenges in the economy but cleverly contrived to win votes. However, it has to adapt to the extant economic exigencies or it will fail. Any law that does not bend will break.
The only way to save President Buhari’s government is to continue with the existing economic policies, fine- tuning and reviewing them – where necessary – rather than reversing to ensure stability, continuity and consolidation. This will promote investors’ confidence and give the nation a long term planning advantage. Reversing means starting afresh – all over again – and it takes time to build. This leadership can at best be in power for eight years, which is not enough to transform things especially from the scratch.
The great challenge before President Buhari we said previously is how to marry and reconcile economic fundamentals with political expediency, party ideology and economic necessity, and pressure to win the next election and the demand of building a national legacy that will stand the test of time. This is what differentiates great leaders from the straws of history.
Great leaders, such as Abraham Lincoln, Mahatma Gandhi, Nelson Mandela and De Clarke etc focus on posterity and have their memories embedded on the sands of time. Without building on the gains of the former government buoyed by the President image of integrity and firmness, the nation would have lost another 16 years to policy experiment. This will be a great loss to the nation and the betrayal of those who trusted in this government.

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