Economy: Osinbajo, Oyegun, Please, Stop Wailing

RingTrue with Yemi Adebowale; yemi.adebowale@thisdaylive.com; 07013940521

I doubt if the leadership of the ruling All Progressives Congress, APC, knows that it will be judged by what the federal government is able to do for the traumatised masses of this country and not what their predecessors failed to do. Rather than settling down to do something, they persistently come up with all sorts of preposterous excuses. The other day, it was the party’s National Chairman, John Odigie-Oyegun saying that the APC did not know, while it was campaigning, that the economy of Nigeria was in an extremely very bad state.

Odigie-Oyegun, at a reception in Abuja to mark his 77th birthday said: “When we were campaigning – it is necessary to continue to hammer on this point – we were not in government; we knew things were very bad but we did not know they were as bad as we eventually found them. Secondly, and that is very important, nobody ever expected the prices of crude to collapse in the way they have done.” It was the turn of Vice-President Yemi Osinbajo on Monday in Abuja when he declared that the APC-led federal government met an economy that was already in a meltdown. Osinbajo stressed that the country did not adequately exploit the oil boom era by investing massively in infrastructure and diversifying the economy.

Garba Shehu, one of President Buhari’s numerous media aides was also quoted recently saying: “Buhari’s critics have already forgotten the ruinous years of the People’s Democratic Party, PDP. When they ask the question, ‘is this the change we voted for’? The critics forget how far we have come from the scam-tainted years of the PDP rule.”

Back to Odigie-Oyegun, his party knew that the economy was “very bad”, but did not know that it was extremely very bad. So, what has the APC-led government done in the last 15 months to tackle the “very bad” aspect of the economy that it was aware of, prior to assuming office? To what extent has the economy been diversified as being chanted since assumption of office? I challenge the party to point to a single tangible achievement of this administration in critical sectors like security, education, health, road, economy, power, housing or fuel, in the last 15 months. My problem with the APC government is that rather than settling down to work, it devotes time and resources to propaganda. Instead of telling Nigerians what they are doing (that is if they have any) they persistently spend quality time telling Nigerians what their predecessors did not do.

I find it startling that a government that inherited an economy with persistent GDP growth is now describing what it inherited as “very bad”. We all really need to critically examine this inherited “very bad” economy. It is a fact that during the Jonathan administration, virtually all economic indices were on the positive side. Industrial capacity utilisation rose to 49% between 2012 and 2014, as confirmed by the Manufacturers Association of Nigeria. This was because the economic policy was friendly to industrialists. Inflation rate never went beyond single digit while unemployment rate was low. The Naira/USD rate never went beyond N220/$ at the parallel market. Then, Nigeria was the destination of first choice for foreign investors coming to Africa. GDP growth hovered around 7%per annum, the highest in sub-Saharan Africa. According to a World Bank data, the Foreign Direct Investment in just the first six months of 2014 stood at $9.7 billion.

Over $27 billion FDI flowed into Nigeria under five years of Jonathan; the largest in sub-Saharan Africa. The moribund automotive industry was revived. Vehicles are currently being assembled in Nigeria after over 30 years comatose. The GSM companies, a product of the “very bad economy” inherited, created thousands of jobs, paid trillions of Naira in taxes and contributed significantly to our GDP. Government Integrated Financial Management Information System (GIFMIS) and the Integrated Personnel Payroll Information System (IPPIS), introduced by APC’s predecessors helped to reduce overheads and personnel cost. The icing on the cake was that our economy became the largest in Africa, with about $30 billion left in the external reserves for the Buhari administration. So, how did the APC government inherit a “very bad economy”? The task ahead is to put our economy back on the path of sustainable growth with job prospects for Nigerian youths instead of all these propaganda.

The APC leadership must face the reality that our nation’s economy is in a mess today, because of the warped economic policies of the Buhari administration. A good example here is the implementation of the Treasury Single Account, TSA. What the TSA sets out to achieve is good. Unfortunately, it has done more harm than good to our economy due to slapdash implementation. In just one fell swoop, trillions of Naira was moved from money deposit banks to the Central Bank of Nigeria (CBN) without any consultation with stakeholders.

This greatly contributed to the current economic crisis and the gale of retrenchments in the banks. Good cash that should be used to reflate our depressed economy is locked in the vault of the CBN, while Ministries, Departments and Agencies are gasping for breath. Then, members of this government go around telling the unacquainted that they have over N3 trillion saved in the TSA. This is outlandish. Revenue and expenditures of ministries, departments and agencies of the federal government can still be effectively and efficiently monitored to reduce corruption, without padlocking their treasuries.

Nigerians are being deceived to think that padlocking the money is progress. They tell those who don’t understand the technicalities of the TSA that the nation now has such a huge amount of money in the TSA. Money remitted into the TSA is not operating profits of the MDAs and should not be locked up. The MDAs are expected to use their money in the TSA to fund their operations. Many even take grants from the government to augment this revenue. Of course, with strict monitoring, some of them will end up with surplus at the end of the financial year. It is only such surplus that should be transferred to the federation account. This is what can be regarded as operating profit, to be shared by all tiers of government.

Ordinarily, the TSA is never steady, as money goes in and out of it for the daily operations of the MDAs. But what this administration did for many months was to completely deny the MDAs access to the TSA. The money in the TSA is rising while the economy suffers. For example, because of the restrictions, the Nigerian Ports Authority and the Federal Airport Authority of Nigeria are struggling to maintain their facilities. The federal government-owned higher institutions are also badly affected as the schools struggle to function properly. This is why university teachers have been clamouring for the removal of schools from the TSA

This policy that was adopted ostensibly to ensure transparency and avoid misapplication of public funds, now constitutes a clog in the wheel of progress of MDAs. Just imagine the multiplier effect of about N3 trillion on the economy if the MDAs are operating maximally with their money. This talk about so much money in the TSA is bogus and must stop. It is just like a man whose family is struggling to get a meal a day, but goes about bragging that he has millions of Naira in the bank. There is an urgent need to judiciously free the trillions in the TSA to reflate our economy.

Again, to rescue the economy from recession, this administration must practically demonstrate the basic principles and imperatives of prudent spending. For example, I can’t understand how a president that is persistently complaining about paucity of funds will grant waivers to pilgrims to buy USD at subsidised rate of N197/$. This action alone will cost this country an estimated N16 billion. Why is this government still maintaining 10 aircraft in the Presidential Fleet amid dearth of funds? Why is our president operating with four media aides amid shortage of funds? Why is our president maintaining a retinue of special assistants and senior special assistants amid financial crisis?
How can we be talking about scantiness of funds and the president is directing the NNPC to plunge millions of USD into a search for oil in the Chad basin and Benue trough? How can Buhari indulge in this amid dwindling revenue? This is strange. Our president must halt this plan. In this age, oil exploration is private-sector-driven.

This government must get serious and spend more on social and physical infrastructure and the settlement of the huge domestic debt. The N2.2 trillion that accrued to the federal government within its first 12 months is good money to start with. It must learn to complement its monetary policies with appropriate fiscal policies such as the abrogation of arbitrary tax waivers/exemptions and improved tax collection with emphasis on widening the tax net. It must also constructively engage the real sector.

For example, manufacturers have for over a year, been calling on the Buhari administration to re-introduce Export Expansion Grant (EEG) to salvage the sector. Under Buhari’s predecessor, the EEG was used to reduce Nigeria’s dependence on oil both as a source of income and a foreign exchange earner. Recipients of the export grant held an instrument called Negotiable Duty Credit Certificate (NDCC) which they used in the payment of import and excise duties. This gave manufacturing a big boost. The suspension of this scheme is negatively affecting manufacturers. Also, outstanding Negotiable Duty Credit Certificates are no longer honoured by government agencies.

“We have made it clear to the government to re-introduce EGG and pay the outstanding NDCC to save many companies that are folding up. Some have folded up already. If nothing is done fast, many companies are still going to fold up; we are hoping that this government will soon do something positive regarding the NDCC,” said MAN President, Frank Jacobs.

Clearly, this economy must be reflated urgently to create jobs. The suffering in our land is becoming unbearable. Just as a former Prelate of the Methodist Church of Nigeria, Sunday Ola Makinde stated recently, except stringent measures are taken, the country may explode because of the current biting economic hardship. He declared: “We are sitting on a keg of gun powder. The day it will explode, it will consume us. So many graduates are not employed. Unemployed people are the people behind the militancy in the Niger Delta region.”

Justice Okon Abang Really Messed Up
Thrice, I have gone through the judgment of the Court of Appeal reversing the sack of Governor Okezie Ikpeazu. The points raised by the appeal judges against Justice Okon Abang of the Federal High Court, Abuja who sacked Ikpeazu were really thought-provoking. The judges came down heavily on Justice Abang: “Justice Abang went beyond his remit as a judge, was biased and turned the law upside down. He erred in law and occasioned a miscarriage of justice against the governor when he refused to give fair hearing. The judge pre-judged the matter when he touched on the substantive issues at the preliminary stage without hearing the appellant. He committed grave violence against one of the pillars of justice relating to fair hearing. Justice Abang raped democracy in his order that INEC should issue a certificate of return to Samson Ogah when there was no evidence of forgery or criminality against the appellant.”
Okon Abang clearly acted like an interested party. This man has no business remaining on the bench a day longer. He is a disgrace to the judiciary.