To the legion that has been unrelenting in their clamour for a coherent economic policy, the federal government, it appears, seems finally set to give them something to chew upon. A newly-developed Economic Recovery Growth Plan designed to take the country out of recession, says Vice President Yemi Osinbajo at a Business Interaction Group on Nigeria attended by foreign investors in Davos, Switzerland last week, is in the offing.
While the details of the plan will have to wait till its launch date in February, of interest is that the Vice President, perhaps following in the tradition of his boss – President Muhammadu Buhari, seems to prefer a so-called high profile international forum to let Nigerians into its plans to address what is essentially a structural domestic economic challenge. Again, while I have no problem with the high-octane affair and the photo-op that Davos presented to our officials, it seems easy to discern an effort which, in playing up to the tradition of a leadership obsessed with Foreign Direct Investment (FDI) and its hordes of portfolio investors, typically lapses into the usual cant at a time the world has learnt to see and treat us as a joke!
So what is the problem with the Economic Recovery Growth Plan (EGRP)? First is the fact that the plan is coming 20 months late. Never mind the implicit admission of lack of a holistic working plan by the Buhari administration, its coming at this time would appear to have finally validated the claim of the administration’s critics that it lacked a blueprint to tackle the challenges facing the economy.
Second is the content of the plan. Admittedly, we can only speculate at this stage. Nonetheless, it is interesting to hear Vice President Osinbajo speak of the administration’s modest efforts at redirecting the national budget in favour of capital spend. As against previous years when capital estimates hovered around 16 percent, the administration has quite admirably been able to push capital expenditure (capex) to 30 percent – if you call that an achievement in a country with unprecedented infrastructural gap. Imagine that under the 30-year roadmap infrastructure development plan – the Integrated Infrastructure Master Plan (NIIMP), it is said that Nigeria would require at least $2 trillion (N398.1 trillion) over the course of the next three decades. Again, the vice-president spoke of federal government’s plans to utilise the nation’s pension funds to finance infrastructure in the country, the Social Investment Programme under which N500bn has again been proposed for this year in addition to last year’s. These planned infrastructure spend, will no doubt, go a long way to reflate the economy and also in unlock the nation’s socio-economic potentials.
But then, what we need now are bold and if you may – radical thinking out of the current morass. Not the old, worn ideas for an economy in trauma.
In other words, while the above measures may prove helpful somewhat, they may just end up as placebos for the simple reason of the many plagues being inflicted on the economy by a cartel of disparate, unpatriotic actors whose business consists essentially in manipulating everything from its institutions to the national currency for their selfish reasons.
Elsewhere, I have written about predatory behaviours of financial sector operatives. What else is there to say of the usurious class known to reap where they have not sown? What about their spectacular preference for questionable financial derivatives that are no more than Ponzi schemes and other unconscionable activities that render them as laws unto themselves?
Today, I wish to take on their allies – the players in the forex market – for the obvious reason of being such a pain in the nation’s ass! Of course you know the story: the naira, our currency, is currently worth a little more than tissue paper! On Friday, a unit of the greenback reportedly sold for N490! That is supposed to be the market-determined rate being pushed by agents of foreign capitals in our midst!
Of course, I understand that the scarcity of forex occasioned by the dip in global oil prices at a time of uncurbed demand would translate to the pressure on the naira. At a time everything – from fuel, consumables spares and raw materials – are imported, this would ordinarily seem inevitable. What we do know however is that the current run on the national currency is sustained by a cartel of rogue players in the official segment of the forex market in alliance with the shadowy players in the parallel market. The problem is that while their destructive activities on the economy have long been established, very little is being done by the federal government to take them on.
I ask: what will it take to wrest the country from the firm grip of these manipulators? Is any thinking going on in this regard?
Now to the perennially weeping club – the nation’s club of manufacturers. While I do not mean to be uncharitable, I have often wondered if truly the country has a manufacturing class to boast of. As it appears, what we have is a bunch of players permanently hung on forex. Never mind that some of the so-called established manufacturing companies have operated here for decades, the truth is that they do not earn, talk less of covering their forex needs from their operations. Imagine for instance, that to produce margarine, we are still being told that the companies would require forex to bring in palm oil from Malaysia! None, it appears, have found sense in backward integration nor shown willingness to explore its assumed benefits. Of course, so long as oil flowed, there will be enough forex to go round! Now, it seems the party is over!
I once raised the issue of a petrochemical complex which I considered as central to a future industrial strategy. Again, has anyone in government yet figured its place in the industrial mix?
Talk about our industrial policies needing a rethink. Would Osinbajo’s ERGP fix the lacuna?
The greatest culprit of course is the prodigal federal government that spends 40 percent of its entire forex (something it cannot afford) to import fuel that it can refine locally. And now we are told by Vice President Osinbajo that we have to wait for Dangote to bail us out in 2019! For now, we can forget about pushing more aggressively for more refineries to come on board; fixing the ailing ones to augment the supply situation or even the much-hyped colocation of refineries. Who says better attention to those issues would not guarantee speedier recovery? Why are we so unblest? THE NATION