By Tonnie Iredia
The immediate implication of a chasm which public information management in Nigeria has successfully created between the government and the people is that the country now has two major debating groups. The first group is made up of those who adversely criticize whatever President Muhammadu Buhari does or fails to do, while the second group consists of those who see no wrong whatsoever in the activities of Buhari’s government.
The two groups have something in common which is that most Nigerians do not understand either of them. Perhaps because both groups are unaware of this situation, they have continued to seize every opportunity to eloquently disagree with one another on every subject so as to convince us that they have good points either way.
So, when Edo state governor Godwin Obaseki last week painted a frightening picture but which looks like a true story of the precarious Nigerian economy, the resultant huge war of words between the pro and anti-Buhari crusaders especially the non-state actors could not have surprised any analyst who has followed street debates in the country.
As if to sensitize people on the state of the nation’s economy, Obaseki had raised an alarm that our finances have gone so low that last month,government had to print more money for states to share to meet their obligations. This was unacceptable to some people who decided to react to the allegation. First, was an unsigned statement that government was unaware of any printing of money as alleged.
One comedian immediately tweeted that “the man didn’t say you were aware, he said you printed.”The second reaction described the governor’s alarm as a lie while the third educated us on the correct terminology for what happened – lending, not printing. Painfully, what should be of concern to us has been buried by the controversy. The fact that what was shared was a form of loan seems to establish that there was not enough to share.
Whether the extra that was borrowed was printed or conjured by a magician cannot controvert the fact that Nigeria is hugely broke. If such truth must be told to put our status in correct perspective, then Obaseki’s alarm can hardly be wished away especially if his entire statement and not just theexcerpt on printing is read in full.
Indeed, there are vital parts of the statement that have been ignored. For the benefit of those who may not have read Obaseki’s statement, here is a crucial aspect that ought not to be downplayedor discountenanced. According to the governor, “everywhere else, governments rely on the people to produce taxes and that is what they use to run the local government, state and the federation. But with the way we run Nigeria, the country can go to sleep. At the end of the month, we just go to Abuja, collect money and we come back to spend.
We are in trouble, huge financial trouble. The current price of crude oil is only a mirage. The major oil companies who are the ones producing are no longer investing much in oil. Shell is pulling out of Nigeria and Chevron is now one of the world’s largest investors in alternative fuel, so in another year or so, where will we find this money that we go to share in Abuja?”
This quotation is no doubt a veritable wake-up call for us all to rise to the occasion and change our spending habit. This is more so when the governor also clearly stated that it would be unfair for Nigerians to expect one man – Buhari, to be left alone to face the enormous problems. In other words, the governor’s statement created no room for claims and counter claims amongst politicians or supporters.
It is also important to make the point that this is not the first time some of us are getting confused about the internal sources of Nigeria’s colossal loans. Last month, Mele Kyari, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) announced that his corporation could no longer bear the huge subsidy payments of over N120 billion monthly subsidy for Premium Motor Spirit (PMS).
The NNPC according to Kyari has been absorbing the cost differential between the actual and selling cost of the product by recording it in its financial books. Not many understood the statement. From which of its books does NNPC get such huge sums every month? If NNPC had been paying all its funds into the Federation Account as legally expected what magic does the Corporation employ to accommodate massive subsidy payments; is it by merely writing the amounts in its books?
Indeed, during the peak of the Covid 19 pandemic, there were certain expenses which Nigeria was too broke to accommodate and which both the NNPC and the Central Bank of Nigeria (CBN), graciously accepted to co-settle. Do these two bodies have their own supply of funds? Answers to a question such as this may illuminate the state of Nigeria’s finances
Is Nigeria really in financial trouble, if so, to what extent? The latest answer to this question was given a few days ago by Finance Minister Zainab Ahmed who said “the nation’s debt profile was still within sustainable limit.” The statement was quite comforting on its face value but the situation on ground appears to counter it because if we still have capacity to borrow more, why not go ahead and resolve the numerous issues waiting to be settled?
From basic economics we can imagine that our current inflation rate reflects a decline in the purchasing power of our naira which is itself not available to many. Only last week, the National Bureau of Statistics released her consumer price index (CPI) for March 2021. In
the report,inflation was said to have risen to 18 percent in March representing 0.82 percent when compared to 17 percent recorded in February. Similarly, food inflation rose by 5.0 percent to 23 percent in March from 22 percent in February. The report is worth worrying about especially as the scarce funds available are swallowed by personnel costs across the nation. How do we develop?
The body language of the CBN governor, Godwin Emefiele at the press conference where he was requested to react to Obaseki’s comment, showed he was visibly upset that his sacrifices do not appear appreciated. Of course no responsible CBN can watch her nation in trouble without intervening. Again, no one doubts that our CBN has never been this stressed in history.
Governor Emefiele must take solace in the fact that he has been able to withstand the vagaries of the economic weather of Nigeria in the last couple of troublesome years. To say that Nigeria is super broke is not an indictment but telling the truth about our situation for general enlightenment. One of the advantages of educating people on the true status of our economy is that it can have an effect on the increasing demands by different striking Nigerian workers on all kinds of expectations. What displeases Nigerians is not the disclosure of the true state of their nation’s economy but the transparent inequity where at this critical stage, some people still enjoy wardrobe, newspaper or other forms of annoying comfort while others are dying.
Vanguard News Nigeria
The post Nigeria’s Economy: What is the truth? appeared first on Vanguard News.