Nigeria's Prodigal Government: A Road to Economic Recovery?

The number of hungry people in Nigeria has jumped by 100 million in the past two years, aggravated by high food and fuel prices and the global economic slowdown. More than 90 million people are now chronically hungry; under-five children almost malnourished in this country, the highest level in 40 years, adding calorie intake has remained stagnant or fallen in this country despite rising per capita incomes. Three quarters of the Nigeria’s population, survive on less than $2 a day. We are on the verge of economic crisis; shedding millions of jobs since the financial crisis hit, especially in the Niger Delta crisis escalate with solid minerals export declining due to global slow-down.

High prices have forced the poorest families, who spend the bulk of their income on food inside my home-country; Nigeria, to cut back on other essentials such as health and education and borrow money at high interest, .That makes the poor more vulnerable to future shocks and dents their prospects of lifting themselves out of poverty, especially neglected groups such as women and children. The potential loss of capacity and productivity amongst a generation of children and young adults … should be of major concern to us who are dependent on an able energetic and young population to fuel economic growth and future prosperity.

We are in the midst of a recession! When you had growth rates of eight, nine and in some cases 15, 16 percent, we made no progress on malnutrition, on hunger, on including women and children in the society. How are we going to do it now?” yet greed for wealth, the quest for superiority and the unchecked power to crush opponents still put up as the fundamental reasons why successive rulers in Nigeria seek leadership . These reasons are not exhaustive.

Nigeria has sunk deeper into poverty and political and economic uncertainty under this democracy. A “Nigeria4betterrule” contributor attributes it to intensified rivalry with ex-military leaders and the regime because of mismanaged economy. When Yar’Adua took power, he pledged to reform corrupt institutions, build a “true democracy” and revamp the mismanaged economy. But, it has failed to convince investors that Nigerians a good risk, partly because he came by Obasanjo’s rival indictment. It says hopes that things would turn around have vanished and now people are beginning to feel it is just not going to happen. The number of Nigerians seeking US tourist visas has nearly doubled, most of the requests are turned down as the real aim of the “tourists” is to get jobs in the US.

One can arguably ask, is this government pushing the country towards collapse?; the unsuccessful fiscal policies of the present rulers, deteriorating law and order situation, the Niger Delta incessant bomb blasts, water shortages, shattered agricultural sector, soaring prices, devaluation of the Naira and imposition of the general sales tax and agricultural tax are nothing but a conspiracy against the stability of Nigeria.

Nigeria’s economy is in such a bad shape that foreigners come and check our accounts; they give us a list of points which they want us to implement. We as beggars are not in a position to refuse … then the loan is released to us. Nigeria has no choice and even raised the oil prices since it was one of the conditions the IMF lenders made. Nigeria’s budget deficit this year ran into billion of Naira and its tax base is limited to 2 million tax payers, most of whom even “under-file” their returns. if Nigerians leaders do not mend their ways, the country would move towards the fate of Somalia and Afghanistan, the two devastated countries where people lived without roofs.

Many heads of Nigeria’s government are given the status of ‘petit gods’ and almost worshiped by the people. This makes them feel very exhorted and hesitant to leave power because they believe that they will never receive that kind of exhortation when they leave. Because of poverty and unemployment on the country, the people are incapacitated to do anything substantial once this despot is already in power and has made every plan to continue to perpetuate himself till death (either by another coup, war or natural death). Even though this is the case, I believe that the people are beginning to get more chance at doing something if things go out hand. With the removal of one the world’s most brutal despots of our times, and the use of “people power” in the former Yugoslavia to bring down Slobodan Miljkovic, the stage is now set for people to get more involve in the destiny of Nigeria.

The Nigerian people should know that they could make or break this country based on whom they elect in future. Proactive involvement will reduce the chance of electing someone who is greedy for wealth, power drunk or want to prove superior to others. Elections are serious matters and it is a time when the people can really exert their control over who becomes their leader whether the regime like it or not. People do make mistakes and it is okay if and only if they realize that they made one and vowed never to repeat it. As I walk through the streets of Port Harcourt, I hear a lot of people complaining about electing former Governor Peter Odili. They believe that it was a mistake (whether it is true or not is not my call) and they have promised never to do it again – this is one of the best democracies ever (even though election 2011 brought it into question) but responsible citizens still make mistakes. I am sure that the complacency, reluctance or inability of the citizenry to do the right thing is not the major reason why Nigerian leaders fail even though it may contribute in a minute way. Sani Abacha used his five years in power to loot about $2.2billion. The longer a Nigerian leader stays in office, the greater the chances of such a leader contracting that dreadful ‘disease’ called Kleptomania.

But we recovered $1.9 billion from the late Sani Abacha out of which $750 million was a voluntary surrender by the family, while $570 million was recovered from Switzerland.$380 million was recovered from Jersey and $150 million which was the Ajaokuta Steel plant debt was recovered from UK, where were they drown? Ill-conceived and mismanaged from the very beginning, the Nigerian governance method was the mob’s version of the sub-prime loans, giving huge bonus pay-outs every day to a privileged few. By cruel irony, some of the many families now facing foreclosure on their homes are also paying the price for this government lavishes when their children come home drugged – or don’t come home at all. The billions spent monthly on the wrong kind of ‘drunk kind of vision’ including IBB’S Austerity measure, Abachas 2010,and even this time are beggaring Nigerian exchequer just as surely as the Afghan war and long years of military overstretch beggared the Soviet economy in the 1980s.

Nigeria’s government should boldly extend its earlier economic reforms. Nigeria was one of the most mismanaged and inward-looking economies in the world–and looked set to stay that way. Despite decades of failure, this country’s bureaucrats, comfortable in their sinecures and pseudo-Marxist ideology, were in no hurry to change, and faced little pressure to do so. Only a fool, therefore, would have predicted that by March 2011 the government would have substantially liberalized foreign trade and the domestic economy. That the Naira would by then be fully convertible (the clearest open-for-business sign that any once-closed economy can display) was simply out .Nigeria had an underdeveloped but self-sustaining economy with very little borrowing from the ordinary citizens. Something went wrong in early millennia. In the name of liberalization, Nigeria imported all the bad stuff from western economy. The freely available credit, ballooning budget deficit, trade deficit accompanied imported outsourced jobs.

The western world is eager to use Nigerian brains but wants to pay only five cents for dollar worth of job. Nigeria

‘s local Governments opened the doors thinking several Bill Gates will make them rich over night. In the process Nigeria bought billions of dollars from the Americans and hardware is useless anyway by this time. Buildings and cities have been built with overcapacity looming everywhere. Young kids have been told to learn only computers because western world are going to sell oil from Iraq, make a lot of money and bring truckload of jobs into Nigeria. If western world economy is ok, there is no problem.

Nigeria, the world’s eighth-largest oil exporter, suffers from rampant government corruption and mismanagement, which has led to gross violations of the right to basic health care and education. Despite Nigeria’s tremendous wealth, its abject poverty ranks among the worst in the world. Public funds that could have been spent on improving the lives of ordinary citizens have instead been squandered and stolen by members of Nigeria’s political elite.

Corruption also lays at the heart of Nigeria’s most pressing human rights problems. Many politicians have used stolen government revenues to sponsor political violence in order to rig elections marked by violence and fraud. Nigeria’s compromised police force has consistently turned a blind eye to these and other abuses by well-connected politicians. Following the appointment of Farida Waziri as the new EFCC chair in May, the commission sacked at least 12 of its top investigators. Several were later reassigned to the states whose governors they had investigated. In February 2008, a senior EFCC official was attacked by armed thugs. In August, the former head of the unit investigating Ibori was arrested and held without charge for several weeks. Judicial personnel and other political observers interviewed by Human Rights Watch said certain actions by the attorney general have undermined anti-corruption efforts both in Nigeria and in the United Kingdom, including intervening on behalf of Ibori in a British court case involving Ibori’s alleged embezzlement and money laundering of US$35 million of Delta State funds.

Constitution never said our government should enact laws and enforce policy decisions that would force us to create confusion, it appears that Anyone can push the monetary inflation button and interest rates will fall and the politicians will jump for joy. The main reason why these oil companies (both local and international) will not build refinery is simply the fact that they depend on short term profits and not long-term investment that will tie down their capital. This explains why the financial sector of world capitalism overtook the industrial sector (in US, manufacturing share of GDP fell from 25% to 12% while financial share increased from 12% to 20.5% from 1973-2008), which led to the current global economic crisis that has foreclosed any tangible investment especially in the third world. Nigeria’s case is worsened by the terrible state of the nation’s infrastructures which has made investment in the country costly. Nigerian capitalists are parasitic, who like their Russian counterparts, only mushroomed on the decays of mismanaged national economy. They are the beneficiary of government’s hand out of public resources to private hands – privatization of public corporations/oil wells, commercialization of social services, official corruption cum nepotism, etc. They only care about how to sustain this arrangement.

Be that as it may, this regime’s migration clearly symbolized its desire to cut itself off from the people. The developments of the past two weeks suggest it was a canny move. The Niger Delta unrest did not, however, stem from cumulative unease over the political gridlock and long-term mismanagement of the economy. Just as the mass protests in June 1993 were preceded by a incarceration of a won mandate , in some cases, it wiped out the hard-earned savings of a sizeable proportion of the population, this time around the motivating factor was a sharp rise in fuel prices.

Somewhat surprisingly for a country that cannot, because of mismanaged economy, obtain loans from the World Bank or the International Monetary Fund, Nigeria decided in mid-August to partially follow the advice of the two institutions by reducing fuel subsidies. The cost of petrol and diesel doubled overnight, while that of compressed gas — which is used to operate buses as well as domestic cooking appliances — increased five-fold. This not only meant that many Nigerians faced the prospect of spending up to 70 per cent of their income on transport, it also entailed a flow-on effect on the prices of more or less all goods, and that too in an economic milieu where inflation was already running at 40 per cent.

Reports have it that Nigerian gas is being wasted away by flaring whereas a cubic sold can keep a citizen soaring .since the advent of gas flaring an estimated one billion cubic feet of gas has simply disappeared into air. . It defies reason and understanding as to how such colossal wastages are taking place year after year without the least bit of concern and urgency in tackling the situation. The wastages of gas in Nigeria have been going on for years. No amount of corruption by individuals could match this mammoth wastage of resources through negligence and inefficiency. It needs no emphasis that gas is the only natural resource we have which is fueling much of global industries, power generation, a considerable portion of our transports and the entire need of households in major cities. There is a global energy crunch due to massive rise in fossil fuel prices and Yar’Adua Government has raised prices of all fuels including gas in order to keep up with prices in international markets and to reduce losses to government-controlled enterprises dealing in fuels and energies. All of this is massively affecting our entire economy, besides making peoples’ lives miserable due to frequent power outages and rise in prices of all essential commodities initiated by large rises in fuel prices. It is now apparent that we are running short of gas not because the consumers are wasting gas but because the Government and its concerned agencies are negligent in looking after our resources.

Written by
L.Chinedu Arizona-Ogwu
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