MAKING COMMON SENSE BY BEN MURRAY-BRUCE
Nigeria is a nation sleep walking into economic disaster and the sad thing is that nobody seems to be aware of it. Not the government in power, not the opposition and not the fourth estate of the realm.
Are we aware that the preeminent ratings agency in the world, Moody’s, cut Nigeria’s long-term foreign-currency bond from BA3 to B1? Not stopping there, Moody’s ruled that Nigerian efforts to broaden non-oil revenue have been unsuccessful.
Not that this was not alarming enough, but my own personal alarms bells rang the very next day after the Moody’s ratings when some sycophantic group released a press statement praising President Muhamadu Buhari for increasing Nigeria’s non oil revenue!
Are we even paying attention to what is happening right before our very eyes?
Even before this latest Moody’s downgrade, there had been an unprecedented capital flight out of Nigeria which reduced us from being the number one recipient of foreign direct investment in Africa according to UNCTAD in 2014 to not featuring among the top ten in 2017.
This type of ignorance is not bliss. It is wishful thinking that may collapse our economy Venezuela style of not nipped in the flower (we have passed the stage of nipping it in the bud).
The 2018 budget is the most vulnerable budget we have ever had with a whopping one-quarter of the budget devoted to debt servicing. What this should tell a reasonable man is that we have borrowed too much to the extent that we are spending more money servicing (not repaying) debts than we are spending on infrastructure. This is beyond alarming.
Nigeria now has $64.2 billion in local and foreign debts as of June 30, per the latest numbers from the Debt Office. Our debt to GDP ratio is now so high that even the World Bank is alarmed, yet we are carrying on as if all is well with parties here and owambe there.
What many Nigerians do not know is that as at the month of November 2017, we have not yet even finished funding the 2017 budget necessitating the finance minister to roll over over 50% of the 2017 capital expenditure budget into 2018.
In simple layman’s terms, we are robbing 2018 to pay 2017.
It is this type of behavior that has seen Moody’s downgrade us and we are not even bothered!
With Moody’s downgrading us partly because we have not been able to measure up to our non oil revenues, it beats my imagination why a nation that has not been able to meet her non oil revenue targets for the first two quarters of 2017 will make such an over ambitious 2018 non oil revenue target of ₦4 trillion.
Moody’s downgraded us in large measure because we have not been able to meet our own revenue target. Being that that is the case shouldn’t we have learnt from that and practiced the prudent financial practice of underpromising so we can have a greater chance of over delivering?
With all due respect, the 2018 budget is far from being a budget of “consolidation”. It is more realistically termed a budget of over active imagination divorced from reality.
What then happens when, as is likely, we do not meet the 2018 non-oil revenue target? Are we not going to be further downgraded?
Was it not last year that we announced to the world that we are ‘floating’ the Naira? If indeed we are floating the Naira, then why are we predicating an exchange rate of ₦305 to a dollar when the official interbank rate is somewhere around ₦365?
What type of mixed signals are we sending to the world? Are we not giving room for profiteering whereby some people “can sit in my garden and make billions through forex market without sweat” as the Emir of Kano, Alhaji Muhammad Sanusi warned on the 24th of August 2016?
Who in his right mind will come and invest in such an environment? We must begin to tell ourselves some home truths.
If we are going to float the naira then let us float it and have only ONE rate for everybody be they government, opposition, manufacturers or importers.
We cannot be practicing Zimbabwe economics and expect Singapore style results.
We cannot be deceptive in our communications to the Nigerian people and bamboozle then with the upside down logic that Nigeria is saving money by borrowing.
Give me a break. One-quarter of our budget is already going to servicing debts. One-quarter!
Look, the time has come for us to declare an emergency in our finances and implement genuine austerity measures, not the fake one we declared where everyone in government (myself inclusive) is still taking home jumbo pay packets.
We must stop the silly practice of giving special foreign exchange rates to pilgrims to the Holy Land when even genuine manufacturers and job creators do not have access to foreign exchange.
We must stop the irresponsible habit food importation which kills our local agricultural industry.
We must stop the practice of sending civil servants overseas for unnecessary courses. If they must go for a course let them go to the Lagos Business School.
The current leadership of Nigeria does not have a single youth in the federal cabinet. Maybe that is why the federal government feels comfortable taking loans that they won’t repay in their lifetime.
Their kids are largely overseas and in stable democracies with buoyant economies. But let us spare a thought for the masses of our people.
But I have kids. My constituents also have kids and they sent me to the National Assembly to plant trees that will give their children shade not to cut down the already existing trees and use them for firewood.
The United Nations has projected that by February 2018, Nigeria will have more people in poverty than India. How can a nation of 180 million people have more poor people than a nation of 1.3 billion people?
It is because we are too complacent a people. We are paying our politicians much more than India pays her politicians and we are borrowing to do so while India is producing to pay theirs.
The federal government must wake up from its sleep walking and realize that all is not well with our economy and broaden its search fir solutions beyond membership of the All Progressive Congress.
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