Wor­ry­ing! Sham­bolic per­for­mance of fis­cal au­thor­i­ties on econ­omy

Business a.m. - - FRONT PAGE - MOSES OBAJEMU

AMIDST THE FIS­CAL CRI SES FAC­ING the coun­try and threat­en­ing its abil­ity to meet its fi­nan­cial obli­ga­tions, eco­nomic and man­age­ment ex­perts and an­a­lysts have de­cried the fis­cal au­thor­i­ties’ help­less­ness and be­low par con­tri­bu­tion to the eco­nomic re-en­gi­neer­ing of the coun­try in the last three and a half years.

The ex­perts worry about the coun­try’s un­abated fis­cal crises such as the suf­fo­cat­ing debt hang­ing over the coun­try, con­tract­ing rev­enue sources, vo­latil­ity in the for­eign ex­change re­ceipt of the coun­try owing to its mono-cul­tural eco­nomic struc­ture, among oth­ers.

Ac­cord­ing to the an­a­lysts, ef­fi­cient and ef­fec­tive fis­cal op­er­a­tions would cre­ate em­ploy­ment, re­move dys­func­tions from the econ­omy, pro­mote eco­nomic growth and gen­er­ally lead to eco­nomic de­vel­op­ment.

In­deed, in the last three and a half years, the fis­cal au­thor­i­ties have all but aban­doned the man­age­ment of the econ­omy to the mon­e­tary au­thor­i­ties, choos­ing in­stead to en­gage in high stake pol­i­tics, with an am­ple amount of time spent trad­ing blames and call­ing out a gov­ern­ment it took power from nearly a full term ago. Many say the fis­cal au­thor­i­ties have failed to pro­vide lead­er­ship in eco­nomic man­age­ment and have, in­stead, cho­sen to act like traders with­out ideas need­ing money to de­liver on their man­date but lack­ing the ca­pac­ity to come up with fresh ways of reengi­neer­ing the econ­omy.

The Cen­tral Bank of Nige­ria, the banker of last re­sort with re­spon­si­bil­ity for mon­e­tary pol­icy, has found it­self at the com­mand­ing height of di­rect­ing the econ­omy, leav­ing its banker of last re­sort role to take on in­ter­ven­tion­ist re­spon­si­bil­i­ties since 2015 to keep the ship of the Nige­rian econ­omy steady. It has found it­self in­ter­ven­ing in ev­ery area of the econ­omy for which the fis­cal au­thor­i­ties have demon­strated grave in­ep­ti­tude, with many say­ing if the CBN had not been strong for

Nige­ria, the eco­nomic ship of state would have long tanked. be­yond re­demp­tion.

An econ­o­mist and re­spected colum­nist, Dele Sobowale blamed Pres­i­dent Mo­ham­madu Buhari for his fail­ure to as­sem­ble ex­perts in fis­cal mat­ters as mem­bers of the Eco­nomic Man­age­ment Team.

“One of the most im­por­tant de­ci­sions in man­age­ment in the pri­vate and pub­lic sec­tors had al­ways been the se­lec­tion of peo­ple put in charge of the port­fo­lios which de­ter­mine the fates of peo­ple. Buhari has failed woe­fully there.

“In the mod­ern age, ev­ery Pres­i­dent or Prime Min­is­ter knows that se­cu­rity and a vi­brant econ­omy are two top pri­or­i­ties of gov­ern­ment. For those po­si­tions, they must search for and ap­point the very best peo­ple they can find – not based on loy­alty but on com­pe­tence and in­tegrity. Buhari ap­pointed no Chief Eco­nomic Ad­viser,” he said.

In­no­cent Ok­wu­osa, a se­nior lec­turer at the Univer­sity of Hert­ford­shire in the United King­dom, and a mem­ber of the gov­ern­ing coun­cil of the In­sti­tute of Char­tered Ac­coun­tants of Nige­ria (ICAN) ex­pressed un­ease about the scant at­ten­tion de­voted to the econ­omy un­der this dis­pen­sa­tion, and ob­served that oil com­mands more at­ten­tion from the gov­ern­ment than any other is­sue es­pe­cially as it shapes ev­ery plan that it puts for­ward.

He de­scribed as wor­ry­ing the gov­ern­ment’s ob­ses­sion with oil when the world was al­ready mov­ing away and fo­cus­ing on other things and drew at­ten­tion to a fed­eral bud­get deficit of N1.8 tril­lion, won­der­ing what is go­ing on in the coun­try.

“In the de­vel­oped world, em­pha­sis is mov­ing to­wards knowl­edge­based econ­omy. Hu­man cap­i­tal be­comes the great­est as­sets that drive the econ­omy. What can we say is gov­ern­ment’s ef­fort in hu­man cap­i­tal de­vel­op­ment?

“If de­vel­oped coun­tries are go­ing for cars with­out fuel, why do we still fo­cus on oil? 87 mil­lion Nige­ri­ans in poverty.

If gov­ern­ment had done what they ought to do, we would not be talk­ing about oi,l” Ok­wu­osa, a fi­nan­cial re­port­ing stan­dards and cor­po­rate gover­nance ex­pert told

busi­ness a.m.

Charles Iy­ore, a man­age­ment ex­pert, also told busi­ness a.m. that the fis­cal au­thor­i­ties in the coun­try are only good at reel­ing out fig­ures which don’t match with re­al­ity. He said the fis­cal au­thor­i­ties do not seem to have a di­rec­tion.

Iy­ore said the coun­try should have re­gional fo­cus and in­dus­trial nodes in its de­vel­op­ment plans so that re­gions can grow con­cen­trat­ing on what they can do best.

“In the United States, there is re­gional fo­cus on de­vel­op­ment which helps. Here in Nige­ria, there are no nodes or in­dus­trial hubs. There is no in­dus­try driven pol­icy for de­vel­op­ment,” Iy­ore lamented.

Ac­cord­ing to him, the fis­cal au­thor­i­ties should work hard to en­sure that work­ers’ salaries are paid as at and when due to help the econ­omy as un­paid work­ers would not be able to buy while in­dus­tries would not be able to pro­duce.

Some of the ex­perts fault the bud­get­ing sys­tem which is also a re­flec­tion of the ef­fi­ciency of the fis­cal in­sti­tu­tions in the coun­try. Muda Yusuf, the di­rec­tor gen­eral of the La­gos Cham­ber of Com­merce and In­dus­try (LCCI) said that the bud­get was too small to make an im­pact on the econ­omy.

“The 2019 bud­get to GDP is just about 5 per­cent and this is an econ­omy of $450 bil­lion or N113 tril­lion and we have a bud­get slightly above N8 tril­lion.

Such bud­get is im­ma­te­rial. It can’t make any dif­fer­ence,” he said.

He said there was a need to grow the bud­get and this can be done by broad­en­ing the tax base by tar­get­ing high net worth in­di­vid­u­als and also at­tract more in­vest­ment into the econ­omy.

“Bud­get to GDP of other ad­vanced economies like South Africa, for in­stance, is more than 30 per­cent to GDP ra­tio,” he said.

On the struc­ture of ex­pen­di­ture, Yusuf said: “If you look at the re­cur­rent ex­pen­di­ture to debt ser­vice, debt ser­vice is still very high at N2.14 tril­lion while re­cur­rent ex­pen­di­ture is N4.04 tril­lion. This is N6.18 tril­lion, al­most equal to the to­tal rev­enue of N6.97 tril­lion the Fed­eral Gov­ern­ment is ex­pect­ing in the year.”

Oluse­gun Osoba (right), APC leader and for­mer gover­nor of Ogun State, pre­sent­ing a copy of his book to Pres­i­dent Mo­ham­madu Buhari, after the for­mal pre­sen­ta­tion and rais­ing of the hands of Dapo Abio­dun, APC gov­er­nor­ship can­di­date in Ogun State, as its only can­di­date in the state, at the Pres­i­den­tial Villa, Abuja at the week­end.

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.