“It is at a time like this that real, true, genuine leaders rise from the rubbles of disaster and position their country on a new road to success,” said one economic analyst to business a.m. as we worked on this story.
Not a few analysts think that Covid-19, the pandemic that has swept the world and created panic in many a world leader with stockpiles of arsenal of war and aggression, presents a golden opportunity to Nigerian leaders to sheath all swords and misgivings and pull brains together from across the country to chart a new trajectory for Nigeria during this difficult time and when it is all over.
But they also think that, as usual, the moment is not being seized and that it would slip through their hands and Nigeria will be back to business as usual if and once the country pulls through this.
Tope Fasua, an economist captures the core of this position: “This Covid-19 offers us an opportunity to throw away the box in which we have imprisoned our minds for too long as a people, as encapsulated in our economics. South Africa budgeted $130 billion this year for her 60 million people. Over $2100 per person. Angola is close. Algeria, Egypt, Morocco, Tunisia, etc. Why will we say this hopeless N10 trillion or less than $30 billion is a push off the cliff? Do we think that Nigerians don’t deserve anything good? Why have all the indices come up short for us. No light. No water. Stinking environment. No public housing. Nothing! No health systems. Who do we think will invest in them for us and our people?” he asked angrily.
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Nigeria’s economy was already in a crisis, even before Covid-19 came to town. For more than four years, many analysts say, the fiscal authorities have been absent. Even when there appears to be an intention to do some good, they say managers have at best been shallow in the handling of programmes that the desired impact on citizens has never really been felt.
“Sound economic management is about creativity and ingenuity. These are hardly found in books,” one analyst told business a.m. to underscore what he believes is the utter lack of depth in the handling of the Nigerian economy.
This concern is further buttressed by the view of another analyst, who says, “Innovations and creativity are required from our managers of the fiscal system. The current monetary intervention, as proactive and helpful as it seems, is a short-term solution that will stimulate deeper crisis in the absence of expanding or growth in revenue”
He suggests that a total fiscal overhaul is needed, noting that, “monetary policy bullets are only but a few.”
Nigeria’s monetary authorities, led by the apex financial institution, Central Bank of Nigeria, have had to extend themselves since 2015 when the current government came into office, carrying the can for a government that seem not keen to get out of its pocket square.
That inability to be able to get itself out of its pocket square is demonstrated in what some financial analysts told business a.m. is keeping citizens in perpetual déjà vu, an economic condition that they feel all too familiar with and will not change any time soon.
“When you are faced with economic challenges and you care for your people very much, if you have no solutions, you call in people with genuine intention, to help you out. Where Nigeria has gotten to, there’s really no need for anybody assuming wisdom that they don’t have and getting us all into deeper trouble,” a university teacher tried to explain.
And Nigeria is, indeed, in trouble. “With continuous falling oil prices, the budget had lost its promissory capacity. It’s a dead document. The cut brought a realistic objective to it. Nigerian fiscal environment is quite weak in many aspects of economic sustainability. That’s what is being revealed in this Covid-19 era,” said Tony Monye, an economist.
Another analyst, assessing Nigeria’s situation, said: “Rising budget deficit with declining revenue spells fiscal crisis if not managed efficiently.” It is this stark reality staring at the country that makes some say Covid-19 present a golden opportunity for the burying of hatchets and pooling of strengths in a very bi-partisan coalition to ride this storm out. After all, this government and its leadership, most of whom are geriatrics, is on its second term and has nothing to lose in being bi-partisan.
Charles Iyore, who has been in the world of finance and investment banking for decades, has a particularly deep take when he spoke to business a.m.
“For as long we remain with retail frightened perspectives of development, unable to conceive wholesale and bold ideas to spread prosperity, for so long will we remain needy and everything insufficient. Only those who dare win. We haven’t had a daring leader since Chief Obafemi Awolowo. We have better opportunities now, than were available in the ‘50s and ‘60s, but do we have the courage or vision? How do we shift from military command and control, to ordered and controlled constructional thought processes?” He asked rhetorically.
Before Covid-19 came to town, Nigeria was feverishly pushing to increase its external loan stock. Many analysts were not convinced it was the way to go.
“Nigeria’s debt has always been there. Even when oil price was over $70 per barrel, the government still borrowed, and capital budgets were hardly implemented. Yes, the 2020 budget seems dead now, but government needs to provide the needed stimulus for the economy at this time. consumer spending has fallen, investment is down, import and exports are equally down. This is what is happening the world over. The only part of the equation most countries resort to now is the G (government). No country now, regardless of her fiscal situation, is cutting government spending (correct me if I’m wrong). Nigeria is not the only country reeling from falling revenue in the face of this crisis, but countries are salvaging their economies now with government fiscal stimulus,” said an analyst who just wants to be called Solar.
Tope Fasua, a much sought-after analyst, is a strong advocate for trying something new and radical, what he calls thinking out of the box.
“We could reorder the spending in the budget away from non-value adding items and all those ego boosting things, into the critical sectors. Thus far Nigeria is slow in bringing up a fiscal emergency plan. The only near tangible we have is from the monetary policy guys through loans to some industries, chiefly pharmaceuticals. That is for us to stay alive first since the chemist shelves as we call them will soon be bare. The fiscal sector’s response is to cut budget by N1.5 trillion. In economics this is called a procyclical policy as it deepens the problem not solve it. We needn’t have rushed to cut the budget but to reprioritise what we want to spend on. For now, food security, water projects, health, education, the environment. Then we consider the fact that globalisation is temporarily broken so it’s a time to try and catch up by being productive. The more we produce for ourselves the more competitive we are in international markets when globalisation resumes,” Fasua, who was a presidential candidate in the 2019 elections suggested.
In pushing for a middle ground, Uche Uwaleke, a professor of capital markets, said that mistakes have been made, even though some will add that they are still being made. He thinks that when Covid-19 is over lessons would have been learnt.
“Well mistakes have been made in the past and I think the pandemic, when over, will leave us with some lessons one of which is the need to adequately fund the health sector. Also, we now know that the issue of having multiple streams of income through diversification should be taken more seriously. For me, this is not time for any blame game or to point accusing fingers. We should all join hands to fight the disease. The comforting news is that the fiscal and monetary authorities have taken the lead. I believe our government at all levels will be better at the end of the day and the country will emerge stronger,” Uwaleke told business a.m.