Chief Lawson A. Omokhodion, former Managing Director/CEO of Liberty Bank Plc reflects on the nation’s economy concluding that the federal ministers have many questions to answer…
The drums of the 2015 Presidential elections have been sounding since December 2014. By March 28th the people would speak. While PDP’s President Jonathan is running on its records of the past five years, the APC candidate General Muhammadu Buhari is running on his promises to the electorate.
Anyhow, a new government would be sworn-in on May 2. Watchers of the Nigerian economy are wondering what is going on particularly when all senior federal government officials have relocated to their states of origin for politics. But what will the Finance Minister and Co-ordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala tell the world about the economic successes of President Jonathan? That the economy suddenly fell apart, one year after rebasing the GDP?
Why the federal executive council weekly meetings only approve projects that are never funded? Too many questions to answer, but it must resist the temptation of being carried away by the digitally re-mastered pictorial depiction of phenomenal achievements by a federal government that is now so adept at propaganda and deception.
What will Okonjo-Iweala tell herself that has made fuel importation such a key result area of the economy she manages? The last time I saw her on TV she was explaining payments to fuel importers and why there would be no fuel scarcity.
In fact in the past six months the government has paid well over $6billion (six billion dollars) for fuel importation. Okonjo-Iweala must feel so ashamed that as an economist, her government cannot take advantage of the nation’s natural resource endowment in crude oil to grow the economy.
Over three and half years after the 2012 fuel subsidy crisis, Ngozi’s federal economy has no new petroleum refinery in sight and the existing ones continue to operate at 18% of capacity.
At the last count, Nigeria’s OPEC quota of 2.3 million barrels per day is undermined by both oil theft of 400,000 barrels per day and inability to generate sales. Yet the 480,000 daily barrels of crude oil that could have been refined locally are replaced by imported fuel. Ngozi and the federal government place their hope on the fact that the Aliko Dangote’s refinery will be ready in 2017 as if Dangote is both the embodiment of Nigeria’s private and public sectors.
What will Ngozi tell her World Bank colleagues that has made Nigeria so terribly dependent on imports on every aspect of its life? Import of furniture items? Import of kerosene stoves?Has Ngozi read the lessons of the structural adjustment programme of 1986 and the goal to make Nigeria less import dependent? As a world bank trained economist why no long-term development planning strategy that guides the economy Okonjo-Iweala is co-ordinating? Will this economy continue to move from disaster to disaster once again as from May 29, 2015?
Does this economy know how much it loses to OECD countries on annual foreign educational pursuits by students and medical tourism by the rich? Nigerians annually troop to the UK, Canada, USA, Switzerland, Dubai and others for quality university education. It costs a minimum of six million naira annually for undergraduate tuition and board in the UK.
There are over 5000 Nigerian students in UK universities. Some students go to Benin republic and Ghana to receive university education in both good and inferior institutions. Students do go to India for university education, a country that was nowhere in the 1970s.
In Nigerian one of its about 150 universities is rated amongst the first 1000 universities in the world. A country where both federal and state government owned universities cannot boast of proper toilet facilities for its hostel students. In Nigeria’s public universities, the inadequacy of both halls of residence, classrooms and lecture theatres negate the existence of these institutions.
In the past 5 years the federal government alone has set up over 20 universities without even a study to ascertain the type of education and skills needed by the national economy. Yet these universities must produce good quality graduates for the economy and pronounce them fit both in learning and character.
Why will a federal government not achieve excellence in academics and infrastructure in 10 selected universities in 5 years? In 16 years? If there are 10 world-class universities in Nigeria, most of the students who fly to the UK, Canada and USA for university education will remain at home to school and conserve the nation’s scarce foreign exchange. Does Ngozi know that as Co-ordinating Minister for the Economy she must be concerned? Does Ngozi know that job creation in this economy is her number one priority? A country where nine out of every 10 graduates are unemployed confirms that the economic policies have failed.
Job creation is beyond ventures like Sure-P; You-win; graduate internship programme for 20,000 youths, or agropreneur programmes for 5000 youths in an environment where well over 25 million youths are daily searching for jobs. The Nigerian youths are debased and dehumanised by joblessness.
What is the desirable annual unemployment rate that Ngozi and her colleagues target? How come federal government institutions like PRODA and FIIRO cannot be reorganized, funded, and engineered to breakthroughs in the Nigerian manufacturing world to create jobs, products and services? Why must national initiatives in local raw materials conversion programmes of yesteryears wither away?
The multi-billion dollar cost of medical tourism in Europe, America and India is another drain pipe on the nation’s resources. How can a finance minister watch helplessly as billions of dollars are moved by patients seeking medical treatment abroad?
Yet a strategic analysis of the environment would have pushed the federal government to singly or in partnership remodel a few existing teaching hospitals into world class hospitals making provisions for a no strike contract. Basic health challenges that nurses and assistants handle in Europe and America lead to instant death in Nigeria. Infant and Children and maternal mortality remain common place.
Killer high blood pressure, heart attack and stroke and hospitals have no CT Scans, no MRI, no dialysis machines, no defibrillator, no reagents, no cancer treatment machines and yet there is a federal government. Equipment are not available and trained doctors have all left in frustration leaving behind only the sympathetic ones ready to help us through the domestic medical rot.
By the time the Central Bank of Nigeria releases foreign exchange for fuel importation, approve foreign exchange for payment of foreign school fees, and basic travel allowance and disburses funds and business travel allowance for sick Nigerians going abroad for medical treatment, little wonder that the nation’s foreign reserves can hardly hold its ground. With the international oil market gone soft the outlook for the local foreign exchange market is now dismal and horrendous.
The government must blame itself for allowing the exchange rate to break through the psychological threshold of N200/$ and now trading at N200/$ open market and N198/$ CBN. An economy where such a massive devaluation of its currency has taken place and yet the interest rate on loans and advances is an average of 27% pa is not serious about economic survival. Will Ngozi say that the fundamentals of the Nigerian economy as they stand today do credit to President Jonathan’s government?
Since the second tier foreign exchange market of1986 the present experience has been the most traumatic. When businesses borrow they must pay back otherwise they come in conflict with the banks. Repeated bank loses on such transactions does not augur well for the economy.
When banks collapse it is on account of the debilitating effects of bad loans on their shareholders’ funds. The small and medium sized businesses in the country cannot survive on an interest rate of 27%pa. The large scale industries cannot survive for much longer on both an interest rate of 27%pa and an exchange rate of either N198/$ or N220/$.
The outlook is that the Nigerian economy is on a free fall. The daily stock market price losses and decline in market capitalisation indicate that the economy is in turmoil but neither Okonjo-Iweala nor her colleagues know what to do.
It is instructive how the country has been allowed to go to the dogs in such a short time. Senior federal government officials tell lies so freely.
The Agriculture Minister Dr Adesina has extolled cassava bread but tried as I have there is no one loaf of cassava bread in sight. So where is Cassava bread? Similarly, the Agriculture Minister told the nation that several rice mills have been commissioned and notably in Abakaliki. And yet all my efforts to buy a bag of Adesina rice have failed.
Whenever I see Professor Nebo, the Power Minister on national TV, I feel very sorry for him. The reason is that he has tried every known trick in the books to convince Nigerians that 4,000 megawatts is a good buy for the well over $35billion poured into electricity supply and generation by the government in the past 15 years.
When Professor Nebo is not bemoaning gas pipe lines vandalization, he is crying over transmission lines. Yet no report is heard of gas explosion as a result of pipeline vandalization.
If indeed a gas pipeline is vandalized the resultant fire outburst will be catastrophic. Recently, the Central Bank of Nigeria offered a soft loan of N213 billion to the gencos and discos that bought the assets of the power holding company of Nigeria.
This massive loan is being disbursed through commercial banks. If past experience is anything to go by, this loan will go the way the aviation and textile intervention funds went.
Meanwhile, Professor Nebo is confused as he knows there is no public electricity in the country. Too many fundamental questions need to be answered by federal ministers.
Tons of presidential goodwill wasted. Fuel subsidies’ frauds unresolved? The docile EFCC and ICPC have made embezzlement of public funds such an easy past time. Why is impunity our guiding principle? The next President must apply a new strategy. We must change how things run in this country.