Tackling Nigeria’s Economic Challenges

Economic crisis is
indeed the instance of the convergence of the masses’ demand for economic incorporation and the elite’s demand for political incorporation. At such times when the economic surplus is shrinking and the struggle to revive it is intensifying, the hegemonic elite of faction becomes more exclusionary to limit or curb the excesses.
In response to the depth, persistence and intractability of Nigeria’s economic crisis, which has become an issue of deep concern, the Federal Government is looking for an alternative to tackle the challenges. But the problem with the Nigerian government  has been that rather than come out with a long-term solution to the economic challenges, the government resorts to Structural Adjustment Programmes (SAP).
This was practiced by the military government under the present President Muhammadu Buhari in the 1980s, which varieties were draconian and tended to intensify poverty in the short-run and exacerbated social and political tensions.
Many African countries, including Ghana, Ivory Coast, Sierra Leone, Mali, Senegal, Niger, Nigeria, Cameroon, Benin etc., in the 1980s witnessed covariance of economic crisis which resulted in a surge of demands for political and economic incorporation. This was a watershed in Africa’s  quest for democratization. In Nigeria, the economy grounded to a halt at that time and the fiscal crisis of the country became so deep.
Nigeria’s deep economic down turn was compounded by a political crisis which was remarkable for the unprecedented intensity  of the demands for incorporation. The country was forced to face the unpleasant experience of the International Monetary Fund (IMF), which put it in dire state and could not cope with IMF’s characteristic shylock conditionalities attached to its credit facilities. The recipe of the IMF has consistently tended to end up impoverishing more Nigerians than ever before.
When Ivory Coast witnessed a downturn in economy and worsening  fiscal crisis between 1986 and 1989, the IMF and the World Bank stepped in with a recovery programme which led to widespread unrest, strikes and demonstrations by a wide variety of groups, including students, taxi drivers, port workers and even the police and the army. There was so much tension that the programme was quickly suspended, though the crisis had already set the country on a course of political change.
It is against this backdrop that the Nigerian Trade Union  Congress (TUC) in reaction to the recent visit of the Managing Director of IMF, Ms Christine Lagarde to Nigeria advised the Federal Government to beware of the IMF. A statement signed by the President, TUC, Comrade Bobbol Bala Kaigama and the Secretary General, Musa Lawal said the caution was informed by the bitter experience of the past with the financial body.
According  to the congress, “for the umpteenth time, we wonder aloud: Can’t we solve our challenges as a nation without foreign intervention? Must the Bretton Wood institutions be the ones to always determine and tell us when our economy is doing well and when to devalue the naira? Why must they suggest to us how our economy can be fixed, whereas their recipe has consistently tended to end up impoverishing Nigerians.
Nigeria’s economic crises began in the early 1980s with a combination of external shocks and internal mismanagement. But with the external shocks, the crisis could have been avoided if the huge fortunes the country realized from petroleum was better utilized. Far from avoiding the economic crisis, Nigeria experienced a singularly severe version of it when every attempt to manage the crisis failed. The country had no alternative than to turn to the Bretton Woods institutions in 1986, which even compounded the problem. By that time, Nigerians became totally  disillusioned with military rule and angry that they had to put up with a very harsh adjustment programme which was made necessary by the management of their rulers. The feelings of Nigerians ran so high that General Ibrahim Babangida, the successive military ruler, quickly announced a programme of transition to civil rule, which turned out to be a tactical attempt to buy time and reduce popular anger instead of the intended transition to a democratic polity.
Frankly, the outburst of the TUC is quite in the right direction viewing the fact that Nigeria by now ought to be looking inwards and adopting international best practices to address the huge economic challenges facing it. With the abundant natural resources at its disposal, the country does not need to depend on external borrowing to grow its economy. It is unfortunate that Nigerian leaders lack fiscal discipline which has been the bane of the country’s economic growth.
Although the IMF through its Managing Director, Ms Christine Lagarde had said that given the focus of the President Buhari’s administration, Nigeria does not need any lending assistance from the fund, the visit should not indirectly be used to lure the Federal Government into borrowing. Buhari, according to a statement by the PDP, had indicated intention to borrow N2 trillion, describing it as a height of recklessness and deceit from a government that thrives on propaganda.
Ms Lagarde while speaking to journalists in Abuja after her team’s meeting with Buhari, explained that what Nigeria requires is going forward to sustained fiscal discipline and flexibility in the implementation of key monetary policies that would grow the economy. She said that the IMF would be willing to assist the Federal Government in plugging revenue leakages, tracing stolen funds and restructuring its tax system, pointing out that Nigeria has all the potentials to overcome the current economic challenges of falling commodity prices without resorting to the IMF for financial support.
President Buhari said his administration will enforce greater fiscal discipline, probity and accountability in all revenue generating agencies of the Federal Government, adding that government would take deliberate steps to enfore regulations that would stop financial leakages in generating more revenue to mitigate the effect of dwindling oil prices on the Nigerian economy. “We are working very hard and with the budget as our way forward, we will do our best to ensure that our country survives the current economic downturn”, Buhari said.
It is indeed surprising that the Nigerian government has been finding it difficult to improve on the country’s economy. The country has other natural resources apart from oil and has the potential to produce good and quality rice and other local products for domestic and export needs. Other countries such as India, China, Malaysia, South Africa, Indonesia and others are all doing well today because they looked inward to all their potentials.
Nigeria has grown to a level that it does not need to wait for any organization or country to dabble and meddle in its fiscal and monetary challenges. Doing this amounts to selling our government or country, which will further impact negatively on the country and the people. While it is not wrong to engage in genuine mutually beneficial partnership with the IMF or any other body, it must be cautioned that the Nigerian government should beware of any agenda or policy inimical to the economic and other interests of the Nigerian masses. Policies that do not work for the good of the country should not be embraced.
It is understandable that debt servicing constitutes a serious burden to our budget. Fiscal and monetary policies must work in tandem so as to impact positively on the country and the economy.
For the N6.08 trillion 2016 budget to stimulate economic growth, it must be backed up with the right monetary policy and it is pertinent to point out that so long as Nigeria continues to depend on oil exports for the bulk of its revenue, the value of the naira will continue to affect the price of oil, so there is the obvious need to diversify the economy. One of the ways out is to create the enabling environment for the productive sector to thrive.
The agricultural sector must be developed for us to be able to produce goods and have agro-based industry as well as have enough to feed and to export. There is also the need to harmonise the fiscal policy and the monetary policy before the value of the naira can be determined. It is crystal clear that Nigeria is in a deteriorating financial condition, so it needs fiscal and monetary policies to actually stabilize the situation for us to have a recovery.

Shedie Okpara

President Muhammadu Buhari