ECONOMIC AGENDA: Between Theory and reality

Shamsudeen Usman, Finance Minister

While an economic theory is acknowledged and accepted in intellectual discourse, economic realities are of great concern and more pronounced amongst ordinary citizens. The talk of hyperinflation, per capita income, macro-stability, GDP and exchange rates and all others, which sound like jargons to illiterates, do not make sense to market women, traders and local people. It is when they are translated into developing the economy to become industrialized, less dependent on importation and to generate of employment opportunities and affordable cost of living that the impact could be felt positively.

Recent developments have shown that it is theoretic and ironic the monetization policy, which was intended to reduce wastage of public funds, but has different applications for classes of Nigerians in the public service. While hundreds of millions of Naira are allegedly spent for mere renovations of accommodations for a few political office holders, majority of the civil servants who were allocated government houses have been groaning in agony as mortgage finances have left them with little or no salary at all to provide the next meals and pay bills for medication and education of their wards. In fact most of the civil servants have innocently and indirectly mortgaged their future through indebtedness to the shylock banks that have no sympathy for their plights.

Amazingly, it was at the tail end of Obasanjo’s tenure that the 8-year administration realized that staffs of parastatals and agencies have been receiving higher salaries than those of their parent ministries. The then administration, after a weekly FEC meeting of May 16, 2007, through the then Minister of Information, Mr. Frank Nweke (Jnr) announced its decision to ameliorate the unwholesome disparity. That theoretical statement meant that the then administration was going to make the salaries of civil servants in ministries of petroleum, finance and communication etc similar to that of NNPC, CBN, NCC and other lucrative agencies respectively.

In almost 100 days of the present administration, President Musa Yar’ Adua has used every opportunity to hammer on the economy. In the last three months, the self-proclaimed servant-leader has, nevertheless, demonstrated the political qualities of some past leaders. His reconciliatory stance through Ekwueme Committee and a Government of National Unity has the characteristic of General Yakubu Gowon’s posture during the Nigeria civil war; the exemplary anti-corruption crusade of publicly declaring his assets, reminds one of a similar declaration and forfeiture of assets by General Murtala Rahmat Muhammad. His dark-horse kind of emergence as a symbol of a democratic President is akin to the under-rated Shehu Shagari’s candidacy when he beat the political juggernauts of the time. Though yet to publicly exhibit his radical traits which would be synonymous with highly principled Gen. Muhammad Buhari during his tenure; his recruitment of the best materials for his team is typical of IBB’s era even though the later discarded his appointees after serving the purpose. His golden silence and action decisively are classic of the dark-goggled maximum ruler, General Sani Abacha who spoke only when it was very necessary. His seeming less keenness and ambition for the Presidency is reminiscent of General Abulsalam’s desire to leave the stage honorably within a time-frame; and his reformist-agenda has the outlooks of the economic programmes of his immediate predecessor, Chief Olusegun Obasanjo.

The Seven point agenda of the new administration may actually address the basic economic needs and requirements of the citizens, especially critical action on power and energy, food security, wealth creation, transport sector, land reform, education and security.

Despite the skepticism, the present administration is winning the souls of ordinary Nigerians through populist measures. Some of the measures were influenced by public agitations like the reversal of the Value-Added Tax from 10% to 5%, the reduction of fuel price from N75 to N70; the revocation of the sale of Kaduna and Port Harcourt refineries; the deferment of issuance of waivers and exemptions from the payment of taxes and other tariffs, the suspension of ‘right-sizing’ of civil servants _ a euphemism for job cuts; suspension of illegal deductions from the federation account and the release of Allocation of over N10 billion belonging to local government councils of Lagos State, which the former President Obasanjo had ordered frozen even against the apex court’s ruling.
The correction of the past-shortcomings, a welcome development, is not an achievement, but a positive progression which can be concretized through efficient utilization of human capital and available resources to impact positively on the economy.

The Minister of finance, Dr. Shamsudeen Usman recently unveiled an “Economic Roadmap” of the administration during his inaugural press conference. He disclosed that the administration will take the President’s 7-point Agenda and turn it into a specific, measurable, actionable and time bound programme, which will be sold to all the key stakeholders in the Nigerian Project. Quite impressive: economic development is about statistics where it easier to gauge the level of progress and development within a span of time. Nevertheless, the statement, like an academic exercise, should be vigorously pursued so that it would not sound like another beautiful hypothesis.

Dr. Usman said the new administration intends to accelerate the economic transformation by sustaining the macroeconomic stability, based on the framework of key economic reform values: upholding the constitution and the rule of law; respect for due process and integrity, accountability and transparency in the public service and private sectors. I think so far the government is on course by even involving hardliners and oppositions into critical working groups like the Electoral Reform Panel.

The government is also setting a new direction towards true fiscal federalism by encouraging the States to initiate and pass their own Fiscal Responsibility laws and set up their debt management offices. These would be supported through a central and standard IT platform for effective and timely linkage with all the relevant agencies, especially to update tiers of government on accurate figures of disbursements and loan deductions from their statutory allocations.

There is also a proposed process of annual federal budget, there would be a greater participation and buy-in by the key stakeholders, especially the National Assembly, the States, Local Governments and the public to reduce arrogant posture of the past when unilateral decisions of FG was automatically binding on other tiers. If this process is strictly adhered to, it would address the acrimonious agitations by other stakeholders over benchmarking and sharing of the excess crude revenue.

To enhance revenue collection the Ministry of finance plans a central agency for collection, through the radar of FIRS. The minister of finance disclosed that the government is currently reviewing the VAT to be in line with ECOWAS protocols and for an overall, simpler tax structure for Nigeria. The Nigeria Customs Service too is being reinvigorated to reduce the average clearing period from two weeks to two days to lower malpractices at our ports.

To sustain the capital market, the government is developing stronger mechanisms to check insider dealings and other forms of market abuse, like the alleged stories of hanky-panky practices during the recapitalization of banking and insurance industries.

On relationship with multilaterals, the minister is a bit vague, but his statement sounds instructive when he disclosed that an “IMF delegation is currently in the country on the fourth and final evaluation of the country’s implementation of its own reform programme, under the Policy Support Instrument (PSI). It is envisaged that the fourth review of the PSI will go fairly well.” He nevertheless added that the present administration is working with other countries to ensure that developing and African countries have greater voice, voting power and role to play in the affairs of the IMF as Nigeria plans to enter into a more constructive engagements with other development partners, such as the World Bank, African Development Bank, Afreximbank, Islamic Development Bank, etc, in order to pursue projects on behalf of the Federal and State governments geared towards poverty elimination, improving literacy, reducing child mortality and other similar socio-economic objectives.

With the public pronouncement of the 7point agenda and the unveiling of New Roadmap to Economic Reforms, the time is now ripe for actions for the true dividends of democracy to be felt.

Some of the realities that need to be considered for positive impact, from old rhetoric and pretext, are the need to give workers living and realistic wages not necessarily like the jumbo salaries of political office holders. The government should also look at the plight of workers who mortgage their salaries for houses by converting it to owner-occupier-projects. At least the new administration recently has modified its policy on official vehicles for its cabinet members. This modification can be extended as to provide affordable houses for workers and other Nigerians.

Information they say is power. The economic team should ensure that Nigerians, not only tiers of government, are promptly updated with accurate figures of disbursements from Federation and Consolidated Accounts to all levels of government and ministries. Similarly publication and dissemination of a comprehensive tariff document would be very timely for the benefit of importers and other participants. These actions, if implemented, would further boost the drive for openness and transparency in governance.

The establishment of an efficient, computerized system of taxpayers’ registration, should be in such a way that it would be easier to pay and receive clearance or other certifications online to reduce the antics of middlemen and corrupt officials who hide under the pretext of physical verifications to extort the public.

As the system is involved in political alliance and reconciliation, the new administration should reconcile the agencies responsible for our revenues. Sometimes we are portrayed as most corrupt and unserious nation because of different figures on singular economic matters that come from its organs. The recent dichotomy over the issue of oil revenue and monetary policies should not have raised the unnecessary brouhaha if there is an effective internal mechanism, with sincerity of purpose, to investigate, re-evaluate and coordinate the divergent analyses. If reconciliations would require interventions of anti-corruption bulldogs, so be it. Amicable resolutions of differences could definitely save the nation from needless embarrassment.

This article was originally published in Economic Confidential September, Daily Sun September 3, Leadership September 3, Punch September 3-4, Businessday September 3-4, New Nigerian September 4-5, Vanguard September 6-7, Weekly Trust September 8, Thisday September 17 and Sun Online September 25, 2007


About the author

Yushau Shuaib