Nigerian governors have not stopped to amuse me. They are so empty in thought and imagination that whenever it pleases them, they speak tongue-in-cheek. They double-speak and dance naked to please their mentors or to get political advantage. Development in the country in recent weeks has shown how shameless these small men in agbada can be. They throw up figures they know are not correct to distract public attention from them.
When the oil boom was in vogue, governors fought with every arsenal in their kitty to stop the plan to save for the rainy day. Some had whimsically told Nigerians in 2010 that the rains are falling on them already, why talk about saving.
It was like a crime committed by the then Minister of Finance in her first outing in Nigeria when she came up with the idea of a buffer for the nation to fall back on when crude oil prices crash. The idea of excess crude account saving was seen then as a taboo and some uninformed governors went to court over the matter.
Today, the same set of public officers in the name of state governors are singing discordant tunes about low level of financial flow from the federation account. The rains, which they said then were falling, are now torrential and governors are scampering for bailout. Many cannot pay salaries because there is no savings anywhere to fall back on. When there was fund in the excess crude account, it was used to augment shortfalls from the federation account.
This, for a long time to come, may not happen. Governors will for some time be looking for financial cover from the Federal Government. Looking at development in the international oil market, state governments may be heading for more difficult times from external shock that has seen the price of crude fall from $110 to about $49 per barrel.
This time, the impact on the nation’s finances may be worse than the impact the 2008 global financial crisis had on it. Oil prices are still tumbling and traditional importers of crude oil are either finding alternatives or are over-supplied. Nigerian economy is facing a very challenging time and this may continue to early 2017. The sovereign wealth fund that would have acted as cushion has not been adequately funded. It has only about $1 billion as seed money and since inception in 2012, nothing has been added. Governors had bickered over the legality of the Nigerian Sovereign Wealth Fund.
Nigeria has over the years come to depend on crude oil export for its revenue that is shared among the three tiers of government. Recently, the Central Bank of Nigeria Monetary Policy Committee raised alarm over the deteriorating national economic growth stating that “The growth and development of the Nigerian economy will continue to be at risk so long as progress is not made in structural reforms.”
Figures released by the National Bureau of Statistics attest to this. The data for the second quarter of 2015 indicated that the economy is going down the slope. In the second quarter of 2015, the nation’s Gross Domestic Product (GDP) grew by 2.35 per cent in real terms. This was lower by 1.61 per cent from growth recorded in the preceding quarter.
It is also lower by 4.19 per cent from growth recorded in the corresponding quarter of 2014. During the quarter, aggregate GDP stood at N22.859 trillion at basic prices. Compared to the second quarter of 2014 value of N21.7348 trillion, nominal GDP was 5.17 per cent higher. Nominal GDP growth was also higher relative to growth recorded in first quarter of 2015 by 0.85 per cent.
A growth rate of 2.4 per cent should give Nigerians cause for concern. Nigerian economy needs to grow faster than its rate of school leavers to be able to cope with the growing unemployment in the country. In real terms, the economy should grow by 10 per cent to give hope to younger generation. As it is now, unemployment will rise further and this is not in the interest of the nation.
In general, the paradox of rising poverty incidence in the face of impressive economic growth in the last few years, further reinforces the call for the implementation of appropriate structural reforms in the key sectors notably agriculture, power and the petroleum sector to stimulate productivity.
What does this imply for the average Nigerian? In a period when oil prices were high, the economy was struggling, what then happens now that oil prices have fallen below the budget benchmark? Many states, local governments and even the Federal Government are finding it difficult to pay salaries not to talk of embarking on developmental projects. Poverty which is staring the nation in the face is worsening. Unfortunately for the nation, Nigeria’s policymakers are not addressing their minds to this trend and development in the country.
Instead, they are politicking and toying with the lives of Nigerians, throwing figures here and there. Equally saddening is the fact that the nation’s leading politicians instead of facing governance, are busy scheming for political appointments and mud- slinging of perceived enemies.
Nigerians are more at home with whoever will put food on their table, ensure their children attend good schools, and provide health care, security of properties and lives. The only way to achieve this is when there are resources to carry out governance. For too long, successive governments have paid lip service to the transformation of the nation’s economy, yet 55 years after independence, the nation’s economy is at risk as a result of the vagaries of the international oil market. When will Nigerians and their leaders learn the hard lesson?
