Muhammadu Buhari, President, Federal Republic of Nigeria |
It is proposed to tackle
issues of out-of-school children and drop in enrolment figures in parts of the
country including the Northeast as well as to stimulate inclusive economic
growth and strengthen good governance.
Surprisingly, leaving
untouched the known root cause of the country’s rising numbers of people living
in extreme poverty and the long-drawn-out stunting of the economy like its
predecessors, the Buhari administration would have the public pin hopes for the
reversal of the economic situation on the relatively minuscule alms of $460
million per year. That expectation of economic miracle is false; it will plunge
the people deeper into hardship.
Experience shows that such
assistance is tied and hardly comes in a financial form. The intended sum,
which is partly a grant and partly a loan, will end up in, firstly, procuring
American goods (which will not be the cheapest available to Nigeria); secondly,
deploying American economic hit men disguised as experts with the sole mission
of goading the National Planning Commission to adopt policies that compromise
the national interest; and thirdly, paying out dollar stipends (this is a
veritable bait) to NPC personnel who will be made to undergo training programme
in order to be groomed as local or accomplice economic hit men.
It should be noted that the
Vice President, Prof. Yemi Osinbajo,
who signed the assistance agreement the other day did not specify any field of
expertise that Nigeria lacks and which the USAID assistance will bridge.
And Prof. Osinbajo should
quickly disabuse himself on the impression that “the assistance is a
demonstration that the US wants our country to be a much better place”. History
is a factual teacher. The US was part of the Paris/London Clubs of creditor
nations from whose real and contrived debt Nigeria exited in 2006.
In addition to collecting
$12 billion as final debt extinguishment, both clubs extracted a policy support
instrument from Nigeria, by which they commissioned the IMF to institute formally
dissipation of the improperly withheld Federation Account oil proceeds by means
of the wholesale Dutch auction system and bureau de change thereby ensuring the
systemic weakening of the national currency and economy.
Despite the humongous oil
earnings since then, the CBN 2013 Annual Report indicates that in 2012, (in
that year the price of the benchmark Brent crude oil averaged $112/barrel), the
proportion of the population living in extreme poverty or living on $1.25 or
less a day rose to 72 per cent.
With the latest
classification of those living on $1.90 or less a day as living in extreme
poverty, the poverty incidence will be significantly higher. Furthermore, on
the verge of softening oil prices, the U.S., which was the largest importer of
Nigeria’s crude oil, completely halted imports of Nigerian oil in July 2014
thereby compounding the country’s budgetary woes.
It should be mentioned that
the U.S. not only predicted Nigeria’s dismemberment in 2015 but also nudged its
occurrence by refusing to sell us arms to help fight insurgency in the
Northeast. Do the above instance signify “the U.S. wants our country to be a
much better place”?
As for the genuine import
requirement for any listed activities in the assistance agreement, these could
be better procured from the cheapest sources anywhere in the world because
Nigeria does not suffer any foreign exchange constraint. Remittances from
Nigerians in the diaspora alone currently stand at some $20 billion annually,
more than 43 times the annual tranche of the planned less than altruistic USAID
assistance. And contrary to the rules governing international agreements,
neither the Federal Executive Council (which had not been constituted at the
time the agreement was signed) nor the National Assembly is party to the USAID
Assistance agreement even by way of consultation. Therefore, the apparently
rushed assistance agreement should be abandoned as stillborn.
On the other hand, the
Buhari administration should take to heart the telling position of the European
Union that Nigeria is a rich country that does not require foreign aid or
assistance for development. Proper management of the country’s ample resources
will dissolve the seemingly unyielding problems.
Why does Buhari prefer
foreign alms with strings attached to signaling the take-off of proper
management of the Nigerian economy?
Quite candidly, the bane of
the economy is unintended excessive fiscal deficits incurred across the tiers
of government as a result of the CBN’s withholding of Federation Account dollar
allocations and substitution in their place of freshly printed purported naira
equivalent (which is not the case).
Intuitively, merely ending
the harmful effects of the excessive fiscal deficits (which the CBN agreed in
August 2007 to implement) by properly converting the Federation Account dollar
proceeds to non-inflationary naira revenue for government expenditure will
produce a spurt of economic growth like growing farm crops rid of a suffocating
blanket of weeds.
Besides, inflation and
lending rates will drop to internationally comparable levels while the naira
will assume a stable and realistic value. The tight monetary policy stance will
be no more. The era of accumulating costly but non-investable national domestic
debt will end. Banks would no longer survive solely like leeches on the public
sector.
The existing more than N70
trillion (it will expand with time) idle bank lending capacity will begin to be
deployed into investment in the various sectors of the economy. That is the
road to sustainable and inclusive growth and accelerated reduction in the ranks
of those living in extreme poverty.
And the country will earn
more foreign exchange (sans inflows from foreign portfolio investors) than it
needs for development at a rapid pace. Therefore, Buhari should free himself
from the vested interests feeding corruptly on the existing nationally
injurious fiscal and monetary policy framework and let Nigerians in their vast
numbers begin the journey to economic prosperity now. (guardian)
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