Amidst the fiscal crises facing the country and threatening its ability to meet its financial obligations, economic and management experts and analysts have decried the fiscal authorities’ helplessness and below par contribution to the economic re-engineering of the country in the last three and a half years.
The experts worry about the country’s unabated fiscal crises such as the suffocating debt hanging over the country, contracting revenue sources, volatility in the foreign exchange receipt of the country owing to its mono-cultural economic structure, among others.
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According to the analysts, efficient and effective fiscal operations would create employment, remove dysfunctions from the economy, promote economic growth and generally lead to economic development.
Indeed, in the last three and a half years, the fiscal authorities have all but abandoned the management of the economy to the monetary authorities, choosing instead to engage in high stake politics, with an ample amount of time spent trading blames and calling out a government it took power from nearly a full term ago. Many say the fiscal authorities have failed to provide leadership in economic management and have, instead, chosen to act like traders without ideas needing money to deliver on their mandate but lacking the capacity to come up with fresh ways of re-engineering the economy.
The Central Bank of Nigeria, the banker of last resort with responsibility for monetary policy, has found itself at the commanding height of directing the economy, leaving its banker of last resort role to take on interventionist responsibilities since 2015 to keep the ship of the Nigerian economy steady. It has found itself intervening in every area of the economy for which the fiscal authorities have demonstrated grave ineptitude, with many saying if the CBN had not been strong for Nigeria, the economic ship of state would have long tanked.beyond redemption.
An economist and respected columnist, Dele Sobowale blamed President Mohammadu Buhari for his failure to assemble experts in fiscal matters as members of the Economic Management Team.
“One of the most important decisions in management in the private and public sectors had always been the selection of people put in charge of the portfolios which determine the fates of people. Buhari has failed woefully there.
“In the modern age, every President or Prime Minister knows that security and a vibrant economy are two top priorities of government. For those positions, they must search for and appoint the very best people they can find – not based on loyalty but on competence and integrity. Buhari appointed no Chief Economic Adviser,” he said.
Innocent Okwuosa, a senior lecturer at the University of Hertfordshire in the United Kingdom, and a member of the governing council of the Institute of Chartered Accountants of Nigeria (ICAN) expressed unease about the scant attention devoted to the economy under this dispensation, and observed that oil commands more attention from the government than any other issue especially as it shapes every plan that it puts forward.
He described as worrying the government’s obsession with oil when the world was already moving away and focusing on other things and drew attention to a federal budget deficit of N1.8 trillion, wondering what is going on in the country.
“In the developed world, emphasis is moving towards knowledge-based economy. Human capital becomes the greatest assets that drive the economy. What can we say is government’s effort in human capital development?
“If developed countries are going for cars without fuel, why do we still focus on oil? 87 million Nigerians in poverty.
If government had done what they ought to do, we would not be talking about oi,l” Okwuosa, a financial reporting standards and corporate governance expert told business a.m.
Charles Iyore, a management expert, also told business a.m. that the fiscal authorities in the country are only good at reeling out figures which don’t match with reality. He said the fiscal authorities do not seem to have a direction.
Iyore said the country should have regional focus and industrial nodes in its development plans so that regions can grow concentrating on what they can do best.
“In the United States, there is regional focus on development which helps. Here in Nigeria, there are no nodes or industrial hubs. There is no industry driven policy for development,” Iyore lamented.
According to him, the fiscal authorities should work hard to ensure that workers’ salaries are paid as at and when due to help the economy as unpaid workers would not be able to buy while industries would not be able to produce.
Some of the experts fault the budgeting system which is also a reflection of the efficiency of the fiscal institutions in the country. Muda Yusuf, the director general of the Lagos Chamber of Commerce and Industry (LCCI) said that the budget was too small to make an impact on the economy.
“The 2019 budget to GDP is just about 5 percent and this is an economy of $450 billion or N113 trillion and we have a budget slightly above N8 trillion.
Such budget is immaterial. It can’t make any difference,” he said.
He said there was a need to grow the budget and this can be done by broadening the tax base by targeting high net worth individuals and also attract more investment into the economy.
“Budget to GDP of other advanced economies like South Africa, for instance, is more than 30 percent to GDP ratio,” he said.
On the structure of expenditure, Yusuf said: “If you look at the recurrent expenditure to debt service, debt service is still very high at N2.14 trillion while recurrent expenditure is N4.04 trillion. This is N6.18 trillion, almost equal to the total revenue of N6.97 trillion the Federal Government is expecting in the year.”