₦airaland Forum

Buhari’s Team must therefore, hit the ground running and readily jettison Jonathan’s 2015 budget proposal, so that a fresh Appropriation bill can be presented to the National Assembly before July 2015. We may also consider 29th May to May 28th as fiscal year to align with our established Election Time Table and thereby prevent politically induced budget truncation on the advent of a new Leadership halfway into the year.

By Henry Boyo

Expectedly, goodwill messages have deservedly, poured in from far and wide to congratulate the clear victor of the 2015 elections and President Elect, Mohammed Buhari, may not be unduly disturbed that President Jonathan’s inspirational and totally unexpected early acceptance of defeat, ironically, favorably raised the incumbent’s rating as a statesman beyond the pedestrian perception induced by his performance in governance.
Presidfent-elect, Buhari

Indeed, despite the complimentary economic growth rates gleefully presented by Ngozi Okonjo Iweala, sadly, more Nigerians joined the already bloated poverty ranks. Indeed, the horrid level of insecurity, apparently instigated by ethnic and religious divide, may infact find their true origin in the pervading level of poverty nationwide.

Consequently, expectations are high that Buhari will provide an antidote to poverty and corruption; clearly, our poverty cannot be blamed on an inhospitable climate or a shortage of natural resources.

Infact, citizens from nations with considerably less natural endowments may be excused for decrying what they consider to be an inexplicable inequity by Providence. In reality, our inability to galvanise our resources to the greater benefit of the critical mass is actually caused by the application of fiscal and monetary strategies that are antagonistic to consumer demand, and job creation.

Consequently, if Buhari must succeed, he would need to quickly reverse the ratio between capital and recurrent expenditure, such that well over 60% of total annual revenue projections would be dedicated to the enhancement of social infrastructure and human capacity in place of the prevailing humonguos salaries and allowances of public servants.

Clearly, Buhari would need to also reduce the duplication of functions by various MDAS as per the recommendations in the Oronsanye report, but government must be careful to minimise the inflow of new entrants into a jobless market. Similarly, the new administration should be wary of increasing the current debt to GDP ratio, as this is a sure road to another oppressive debt burden.

A situation where a relatively stable nation like Nigeria with its immense reserves and resources borrows at Shylock rates of over 15% is totally unacceptable for what are clearly risk free soverign debts. Furthermore, Buhari must immediately interrogate why our foreign reserves earn minimal interest, while we inexplicably go cap in hand to borrow externally at over 7% interest rate.

Incidentally, the yet to be assented 2015 budget, accommodates about 20% deficit; consequently, government will borrow over N1Trillion Naira and pay between N100- N150bn as interest charges to fund part of its recurrent (consumables and salaries etc.) budget. It is ironical that such huge government borrowings will exist simultaneously with the unyielding ‘obstructive’ Naira surplus deliberately created by the CBN.

Buhari’s Team must therefore, hit the ground running and readily jettison Jonathan’s 2015 budget proposal, so that a fresh Appropriation bill can be presented to the National Assembly before July 2015. We may also consider 29th May to May 28th as fiscal year to align with our established Election Time Table and thereby prevent politically induced budget truncation on the advent of a new Leadership halfway into the year.

Furthermore, in view of the abysmal performance in the power sector, Buhari should take a closer look at how Nigerians were left with over N400bn debt after the privatization of the distribution Network of the former PHCN. It is equally curious that almost 2 years thereafter, government continues to breastfeed the Discos with selective interest waivers, which have not guaranteed low tariffs or improved performance.

In view of cost implications, the new dispensation should advisedly fast track the adoption of gas for generating power, as gas is considerably cheaper at below $3/cubit mitre and remains a much cleaner form of energy; besides our gas reserves are multiple times in excess of crude oil reserves.

Furthermore, Buhari will equally need to shine his eyes in the area of monetary policy and strategy. As a first step, his Administration should put a stop to the looting of public funds with the obnoxious Treasury Bills Scam. An arrangement where banks are positioned to make over N600bn in 2015 as interest on government loans, which are not applied to any productive or socially enhancing purpose, is clearly obscene.

In successful economies, Monetary authorities mop up or reduce any burdensome surplus cash in the system by borrowing at minimal rates below 2%. When government borrows at 10% and above for what are essentially risk free sovereign debts, banks expectedly become reluctant to lend to other borrowers, thus crowding out the real sector from the cheaper investible funds which could spur enterprise and industrial production and create more jobs.

Mangoes flood Zuba Fruit Market in Abuja on Friday (13/4/12). There Is Need to Preserve Our Seasonal Fruits. NAN Photo

The President Elect should not be hoodwinked by CBN’s usual propaganda that inflation, interest and exchange rates cannot remain harmonious; clearly, in several successful countries, the respective Central Bank monetary policy rate consistently remains below 3% rather the oppressive 13% currently adopted by CBN.

Furthermore, inflation rates above 3% are also anathema to social welfare and therefore decried in more successful economies; regrettably, we shamelessly celebrate inflation rates which are nearer 10%, despite the reality that all static incomes would lose over 50% of purchasing value every 5 years in such event.

The income contraction caused by inflation is responsible for the apparent increasing poverty observed amongst pensioners and retirees as unjust reward for service to their fatherland. Additionally, high inflation rates also constrain consumer demand, which normally drives investment and industrial expansion decisions, to create those jobs, which reduce the unemployment rate.

Buhari is clearly aware that Naira devaluation only facilitates deepening poverty as clearly evident as the Naira steadily fell from its exalted exchange rate of a stronger Naira to a dollar; conversely, a stronger Naira will lift more Nigerians from poverty. Similarly, Buhari should interrogate why the Naira exchange rate steadily depreciated even when our reserves exceeded $60b.

Incidentally, weaker Naira rates will, irrespective of crude oil price level, also instigate higher fuel prices domestically and make the abolition of fuel subsidy very unpopular. On the other hand, stronger Naira rates will reduce fuel prices domestically, and ultimately eliminate subsidies, to make the imposition of a sales tax on fuel possible; furthermore, a stronger Naira will also make fuel smuggling unprofitable and unattractive and ensure uncontested deregulation of the downstream sector by civil societies.

Clearly, the excruciating burden of ever surplus Naira, also feeds the pool that facilitates corruption and is also responsible for abnormally high inflation and interest rates and is equally responsible for unyielding Naira depreciation. A disciplined investigation will surely reveal that systemic surplus Naira is primarily caused by CBN’s creation of fresh Naira values for monthly distributable dollar revenue.

SAVE THE NAIRA, SAVE NIGERIA!!
- See more at: http://www.vanguardngr.com/2015/04/buhari-and-the-economy-which-way-forward/#sthash.qnvs06YK.dpuf

If you are elected president when the country is in great economic deficit, how will you turn things around and secure the economy?

I think that for the navy, air force and the army it is their fundamental constitutional responsibility to secure the country with whatever we have. I believe this country is still strong to make sure that we secure these areas as quickly as we can and re-establish confidence in ourselves, in the world and in our business partners. The capacity to do it rapidly, I am afraid, one has to know the total intelligence, one has to know where we are exactly before you can make a determined move to correct the situation. Really, it is a question of putting whatever we have available in terms of fighting capability to first secure that area, to earn the confidence of investors for them to quickly come back, because they can even organise soft loans for us to stabilise our budget deficits so that we move forward.

There are speculations that looting of public treasury is ongoing in the land. What do you intend to do to check this problem?

I will like to work within the system because we believe in it. I have just told you about three governors and the battle they have with law enforcement agents in their states. We discussed and I advised them to try and document these things so that they can be taken before the court and we will make sure that we register the cooperation of the court so that people who work against the law are prosecuted, especially those who have lost their immunity because this is the best way to stabilize the system.

People must not benefit from being lawless. You can’t be in a position by virtue of the Constitution, subvert the Constitution and continue to enjoy the privileges offered by the Constitution. I don’t think that will be acceptable by the APC. So, whether you are in the opposition or government, you have to behave yourself. I think that is the way we can make progress.

TheGoodJoe:

I am having a big problem getting your point.

The reason why there was a massive jump in funds spent on Subsidies of petroleum products under GEJ is not because of Population. It was because of the corruption in the NNPC.

Stem out the corruption in NNPC and we will have no problem with the Subsidies.

The problem is not the Subsidy but the corrupt individuals giving a free hand to run the country down.

There is no hatred and blame game here. GEJ did nothing to curb the corruption in the NNPC.

Curvinus:
Pls who owns Nigeria's oil wells? Govt or private investors? Does the government pay subsidy to itself or investors in the oil sector? What is really happening? Why would the govt only be interested in oil and not other sectors like agriculture?

If the govt is handing over the power sector to private people, what are its plans regarding oil? Why do we have the NNPC and not a government backed agric commodity hub?

Why aren't we taxing every taxable individual?

Why should a landlord take N1.5m as rent per annum in the FCT and not pay a dime as tax? Why are the mai shai, the mai suya's and the likes not being taxed?

Finally, how did GEJ get the alleged N2 trillion he spent on his re-election campaign? We better start making these things public if we wish to move forward.

Gbawe:
Yes because you want nothing to change and will never acknowledge anything positive that is a step in the right direction. Buhari has to lead by example, and encourage cost cutting and the reduction of bloated governance, if Nigeria is to overcome the conundrum of high recurrent spending that will continue to see stagnate like a Dog chasing its own tail on the same spot and never moving forward. That is an excerpt from an Article. Read the full article to see how an intelligent Nigerian, genuinely interested in the progress of Nigeria, views things. "Illiterate" Buhari is already showing he fully understands what Emmanuel Nwachucku, a London-based business consultant, is saying below. Wish him failure all you want and come here in cynicism daily to announce that "nothing changes still" but you will live to see the progress of Nigeria. Insha Allah.

philips70:
As a growing boy you need to get your priorities right. Fucking supposed high class ladies do not make one a superstar and so deserves higher respect than restrained guys. They could even be avenues for setbacks. And by the way the lady in question wrote in the post

"Me and my baby bro @iambangalee at the #worldbank event in Washington DC #action2015 end poverty"