MY CURRENT THOUGHTS ON NIGERIA – WE BADLY NEED TO CHANGE PARADIGM.
Nigeria is drifting and there seems to be a scarcity of wisdom, not just in the corridors of power, but everywhere. We seem to be great at recycling our leaders in an attempt to leverage experience in resolving a current challenge. It happened in 1999 and it repeated itself in 2015. But, the missing link has really not been “experience”, it has all along been “vision”. I reckon that for us to go into the future, “vision” must replace “experience”. In trying to find answers to the current challenge, we must look beyond the immediate. We really need to ask ourselves: “what really do we want Nigeria to be like in 30 – 50 years from now?”
MY CONVERSATION ON ZERO-BASED BUDGETING, THE 2016 BUDGET ERRORS AND THE CURRENT STATE OUR ECONOMY...
At the start of the debate on “Budget Padding” and all the phony figures that were emanating from the proposed 2016 budget, a foreign friend asked me some curious questions: “I thought your new government initially spoke about zero-based budgeting as done in China, I do not think that what was delivered was zero-based budgeting as there would have been no room for these levels of error if only the government had stuck with what it initially pronounced”. I tried to defend the government but my defence was feeble as my friend immediately countered by saying: what zero-based budgeting means is budgeting in which all expenses must be justified for each new period. Zero-based budgeting, therefore, starts from a "zero base" and every proposed expenditure – be it OP-EX or CAPEX - is analyzed for its needs and costs. So where did all the errors come from?” I was dazed. Before I could recover, my friend again asked another interesting question: ‘Did the current government weigh the challenge of falling Oil prices and the huge level rot in the system before aspiring for power?” That question was immediately followed by another one: “Beyond the quest to fight corruption, does the current government have a broad plan for the revival of the economy and the entrenchment of a system that works?” Both sounded like rhetorical questions to me because I could not proffer a clear answer.
SO, WHERE DID WE GO WRONG?
At the start of the current foreign exchange imbroglio, the government allowed the CBN governor a free reign as he experimented with currency controls – banning and unbanning items fit for access to the dollar at the official rate, yet no fiscal policy direction was unveiled to address imbalance within the economy. So, rather than put together a crack team to look at the issues more robustly, government played the ostrich.
WE PLAYED THE OSTRICH - USING MONETARY INTERVENTION TO ADDRESS AN ISSUE WHICH NEEDED A COMBINATION OF FISCAL AND MONETARY MEASURES
The government allowed the CBN Governor a free reign as it experimented with currency controls at a very delicate time, rather than put together a crack team to look at the issues more robustly. We got a downgrade on the JP Morgan Bond Index, it was fine. Foreign Investors started to flee our Bourse – it was fine. We started to lose foreign direct investment flows – it was fine. Government persisted in its ways and now, there is a huge gap between the official rate of the dollar and the black-market rate, with speculators having a field day in the middle – I hope we still do not perceive this as fine? Because, at this rate, if we do not start to do the right things, we might be heading for a recession.
NO DOUBT, PRESIDENT BUHARI MEANS WELL – BUT BEYOND GOOD INTENTIONS, WE NEED A LEADERSHIP THAT CAN LEAD THE WAY OUT OF OBSOLETE PARADIGMS
The problem is not good intentions. The real problem is that we are so used to doing nothing but corruptly courting the income coming from Crude Oil, with no push for a change in paradigm. We have designed all manner of Development / Rolling Plans – from Vision 2010 to NEEDS, to Vision 2020 – but, we have NOT action-ed any.
TRUTH IS, RIGHT ACTIONS ARE BETTER THAN GOOD INTENTIONS.
I still believe in good intentions, but I am longing more for right actions, right now, because Nigeria badly requires a leader that is an innovator and a change-maker, who is endowed, skilled and emotionally engaged. While right actions usually flow from good intentions – good intentions remain the starting point; we must take it further, because, in solving the current challenge, there is a need for revolutionary change and not incremental change.
POST-SCRIPT: MY SUGGESTION
While I accept that there really are no quick fixes for the position we found ourselves following the fall of Crude Oil prices in the global market, but our government did not help matters at all. Truth is, we have no one to blame but ourselves. Our love for everything foreign and our reliance on a wasting asset has led us on this path. Now what is desirable are innovative solutions rather than a hard-line position. Nigeria cannot be an island unto itself. We need the world, just as the world needs us. Devaluing by 20% when our dominant export had lost over 80% of it's value,and meandering on the corridor of a hard-line exchange control, seem to me like playing the Ostrich. What we should have done was to begin to address key fundamentals like interest rates, a possible quantitative easing with rate hikes on letters of credits for imports and subsidies for target sectors like Agriculture and Manufacturing, while reaching out for foreign investment.
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