Iweala’s Economic Recipe: Not Austerity But Panicky Measures for Nigeria
December 10, 2014
By Rotimi Fasan
Nigerian Vanguard
THERE’S palpable panic if not fear in the land. For those who know, Nigeria is heading for an economic precipice that should get all of us truly worried and looking beyond the false hope being hawked around by the Goodluck Jonathan government. The price of crude oil, Nigeria’s one and only economic mainstay, is crashing with the rapidity of a pack of cards.
From over $100pb oil price has in the last few weeks tumbled down to just below $80pb. The 2014 budget is already in trouble, based as it was on $77.5pb. But the chief economic officer of the Adminstration, Nigeria’s own Job’s comforter, Ngozi Okonjo-Iweala, has been hawking her brand of cold comfort in the wake of the unceremonious crashing of the Naira following dwindling oil prices.
Mrs. Iweala’s recipe for the immediate revival of our comatose economy is the introduction of a number of so-called austerity measures that could see us swimming through the shark-infested ocean of economic survival. Top on the minister’s list of austerity measures is reduction in overseas training, imposition of tax on luxury items like yachts, private jets and alcohol.
The very list of items slated for special focus in the measures proposed by Iweala should tell any right thinking person the source of our economic troubles. It must be noted, however, that there is nothing particularly new in Iweala’s list of austerity measures. Some, if not all of these items, have been perennially fingered among sources of wastage in our economy. Another thing the list should tell us all, is that the problem with Nigeria is often, even when not exclusively, that of leadership.
Who are the Nigerians who own private jets? Are they the ordinary people who waste long, painful, hours waiting for rundown vehicles at bus stops? How many Nigerians can afford to fly private jets, even at public expense, except the wealthy? It is no longer appealing for rich Nigerians and their cronies in public office to go around in specially-ordered automobiles- the types that we can’t dream of producing- that only the very rich can afford abroad. Their preference these days is for private jets over which tariffs are obviously not paid.
It is also these Nigerians in public office and others in businesses sustained by public funds that can afford the kind of exotic alcohol that the new austerity tax regime are meant to deal with. Ordinary people, out to forget their sorrow-induced pain- pain caused by the country’s irresponsible leadership, are more at home with their paraga, burukutu, opa-eyin, alomo and other health-destroying brews that an otherwise forward-looking leadership elite could have helped improve to world standard in over five decades of independence. But no, they must go for specially-branded imports!
The long and short of my point is that the Jonathan government’s austerity measures are headed for nowhere and will not do much to stem the wild tide of our economic woes. They are as vacuous as the stale promises of the government to bring to account the maniacal killers masquerading as insurgents in different parts of the north-east.
The only practical purpose of the proposed measures to put the economy back on an even keel is to stem the obvious panic within government circle, panic that has been trickling down to the states and local authorities in the form of dwindling allocation from the centre. Many states across the country are unable to pay and owe workers and contractors.
Those who paid or are likely to pay have elections or pending but immediate electoral issues to settle. For these, they require the people’s support. All is far from well with this government but those licking up the oil of our national sustenance, feeding fat from it, would want us all to believe otherwise. The crash in oil prices is, however, giving the lie to such propositions. It is telling us of the dire situation that lies ahead with more sellers like Ghana and Chad entering the market while traditional buyers like America are self-producing far more than they would need. This is happening where other countries around the world are, in fact, turning to other forms of energy.
Nigeria has for many years relied on oil. And the huge revenue from this has been stolen outright by our present leaders and others from the past who are still being awarded national honours for the pillaging of the treasury.
The sectors of the economy that should be encouraged to grow have been sidelined in our drive for the easy money that comes from oil which we only produce in crude form since its first discovery in 1958. The agricultural sector, our former mainstay, is now comatose, and there is clear infrastructural deficit in our mode of development. All government is interested in is spending all that comes from our sole source of revenue. Not even savings from the past are spared. Otherwise, government would be more transparent in accounting for the whereabouts of the $67 billion left in its coffers in 2007.
One wonders how much hope from fear and panic President Jonathan and Mrs. Iweala propose to give Nigerians by cutting off a mere $5 from every $77.5 or thereabout expected from sale of a barrel of crude. How much succour can this provide by way of maintaining our projected budgetary spending for 2014? Doyin Okupe, the loudspeaker of Aso Villa, has told Nigerians that his principal’s government is the best in the history of this country even when much of the achievement that he attributed to the government reside in the imagination of biased supporters like him. They make it difficult for the president to appreciate the enormity of the issues confronting this country. If the Obasanjo administration with all its many failures could, at the point of departure, save $67 billion for the incoming administrations, if it could leave this much even when a barrel of oil was between $20 and $60 between 1999 and 2007, how can this government explain the depletion of those funds in addition to what came in from the sale of crude oil at about $100pb in the last few years?
The answer is in the high level of corruption in government. The problem that Nigeria faces today as a consequence of the crash in oil prices is one of corruption. Had we done the right things before now, plugging all the holes through which Nigeria’s wealth is both stolen and wasted, we would be far better off than we are right now that our purse is lean. But rather than plug these holes, the country’s leadership has opened them up for more and better plundering of the economy and our president, rather unfortunately, does not give a damn about corruption.
- See more at: http://www.vanguardngr.com/2014/12/iwealas-economic-recipe-austerity-panicky-measures/#sthash.Y1Pz3ReD.dpuf
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| Nigerian Finance Minister Dr. Ngozi Okonjo-Iweala. |
By Rotimi Fasan
Nigerian Vanguard
THERE’S palpable panic if not fear in the land. For those who know, Nigeria is heading for an economic precipice that should get all of us truly worried and looking beyond the false hope being hawked around by the Goodluck Jonathan government. The price of crude oil, Nigeria’s one and only economic mainstay, is crashing with the rapidity of a pack of cards.
From over $100pb oil price has in the last few weeks tumbled down to just below $80pb. The 2014 budget is already in trouble, based as it was on $77.5pb. But the chief economic officer of the Adminstration, Nigeria’s own Job’s comforter, Ngozi Okonjo-Iweala, has been hawking her brand of cold comfort in the wake of the unceremonious crashing of the Naira following dwindling oil prices.
Mrs. Iweala’s recipe for the immediate revival of our comatose economy is the introduction of a number of so-called austerity measures that could see us swimming through the shark-infested ocean of economic survival. Top on the minister’s list of austerity measures is reduction in overseas training, imposition of tax on luxury items like yachts, private jets and alcohol.
The very list of items slated for special focus in the measures proposed by Iweala should tell any right thinking person the source of our economic troubles. It must be noted, however, that there is nothing particularly new in Iweala’s list of austerity measures. Some, if not all of these items, have been perennially fingered among sources of wastage in our economy. Another thing the list should tell us all, is that the problem with Nigeria is often, even when not exclusively, that of leadership.
Who are the Nigerians who own private jets? Are they the ordinary people who waste long, painful, hours waiting for rundown vehicles at bus stops? How many Nigerians can afford to fly private jets, even at public expense, except the wealthy? It is no longer appealing for rich Nigerians and their cronies in public office to go around in specially-ordered automobiles- the types that we can’t dream of producing- that only the very rich can afford abroad. Their preference these days is for private jets over which tariffs are obviously not paid.
It is also these Nigerians in public office and others in businesses sustained by public funds that can afford the kind of exotic alcohol that the new austerity tax regime are meant to deal with. Ordinary people, out to forget their sorrow-induced pain- pain caused by the country’s irresponsible leadership, are more at home with their paraga, burukutu, opa-eyin, alomo and other health-destroying brews that an otherwise forward-looking leadership elite could have helped improve to world standard in over five decades of independence. But no, they must go for specially-branded imports!
The long and short of my point is that the Jonathan government’s austerity measures are headed for nowhere and will not do much to stem the wild tide of our economic woes. They are as vacuous as the stale promises of the government to bring to account the maniacal killers masquerading as insurgents in different parts of the north-east.
The only practical purpose of the proposed measures to put the economy back on an even keel is to stem the obvious panic within government circle, panic that has been trickling down to the states and local authorities in the form of dwindling allocation from the centre. Many states across the country are unable to pay and owe workers and contractors.
Those who paid or are likely to pay have elections or pending but immediate electoral issues to settle. For these, they require the people’s support. All is far from well with this government but those licking up the oil of our national sustenance, feeding fat from it, would want us all to believe otherwise. The crash in oil prices is, however, giving the lie to such propositions. It is telling us of the dire situation that lies ahead with more sellers like Ghana and Chad entering the market while traditional buyers like America are self-producing far more than they would need. This is happening where other countries around the world are, in fact, turning to other forms of energy.
Nigeria has for many years relied on oil. And the huge revenue from this has been stolen outright by our present leaders and others from the past who are still being awarded national honours for the pillaging of the treasury.
The sectors of the economy that should be encouraged to grow have been sidelined in our drive for the easy money that comes from oil which we only produce in crude form since its first discovery in 1958. The agricultural sector, our former mainstay, is now comatose, and there is clear infrastructural deficit in our mode of development. All government is interested in is spending all that comes from our sole source of revenue. Not even savings from the past are spared. Otherwise, government would be more transparent in accounting for the whereabouts of the $67 billion left in its coffers in 2007.
One wonders how much hope from fear and panic President Jonathan and Mrs. Iweala propose to give Nigerians by cutting off a mere $5 from every $77.5 or thereabout expected from sale of a barrel of crude. How much succour can this provide by way of maintaining our projected budgetary spending for 2014? Doyin Okupe, the loudspeaker of Aso Villa, has told Nigerians that his principal’s government is the best in the history of this country even when much of the achievement that he attributed to the government reside in the imagination of biased supporters like him. They make it difficult for the president to appreciate the enormity of the issues confronting this country. If the Obasanjo administration with all its many failures could, at the point of departure, save $67 billion for the incoming administrations, if it could leave this much even when a barrel of oil was between $20 and $60 between 1999 and 2007, how can this government explain the depletion of those funds in addition to what came in from the sale of crude oil at about $100pb in the last few years?
The answer is in the high level of corruption in government. The problem that Nigeria faces today as a consequence of the crash in oil prices is one of corruption. Had we done the right things before now, plugging all the holes through which Nigeria’s wealth is both stolen and wasted, we would be far better off than we are right now that our purse is lean. But rather than plug these holes, the country’s leadership has opened them up for more and better plundering of the economy and our president, rather unfortunately, does not give a damn about corruption.
- See more at: http://www.vanguardngr.com/2014/12/iwealas-economic-recipe-austerity-panicky-measures/#sthash.Y1Pz3ReD.dpuf
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