Advertisements

Dr. Okonjo Iweala, your recipe for economic recovery offers nothing new

by Tola Adenle

Dear Dr. Iweala,

From the various news reports of your “maiden address to journalists”, it is apparent you have nothing new to offer the country to reach economic success.  May be I should re-word that thought, Good Doctor:  you are still the same Dr. Iweala from The World Bank whose  mind-set is that an African government can only survive by borrowing its way to “economic health”.

I’m sure you are by now familiar with the unrelenting “attacks” supposedly on your person by this blogger and, earlier, by this same writer in a weekly column in The Nation on Sunday which have consistently criticized your position on borrowing since your departure from the Obasanjo Administration.

I offer neither apologies nor explanations for those “attacks” as they must appear in these parts even though I generally write from a layperson’s stand with no letters in Economics after my name.  Nevertheless, like you and like just about ALL Nigerians, I do have relations who are greatly affected by the mess made of Nigeria’s economy these last several years, especially since the so-called return to democracy.

As such, even if I do not directly suffer, I know many who do and why they do, and have long concluded since I read your South African proclamation about borrowing which is quite similar to your recent Abuja declaration: that “Nigeria has to reduce borrowing but cannot stop borrowing immediately because it will be a shock to the syste – that you are NOT what exactly the doctor ordered!”  You reportedly also added at Abuja that “with a total debt profile of $39.7 billion, which is 20 per cent of GDP, Nigeria is in very good shape. The debt is extremely low and all are concessional with reasonable interest rate …”.  Incredible!

My Math has never been that good and my calculator does not go beyond eight digits.  What I’m about to say, therefore, may sound pedestrian to an acada woman of great repute:  how much exactly did you make Nigeria pay – pardon me – did you help Nigeria negotiate and pay off under a decade ago, and by the way, what was the total consultancy fee which was reported as over $100,000 lPER DAY?  I do remember the principal was less than $39.7 billion.

If you preached a gospel of cancelling our debts under General Obasanjo, what changed in the few between months you left the Finance Ministerial post AND your it’s-only-an-advice sort of South African declaration that Nigeria “still needs external borrowings”?

Now, to your new template?

“The Federal Government will cut recurrent spending …”: Dr. Jonathan has repeated that close to 39.7 billion times.

As regards the 2012 budget, “Nigerians have to make tough choices…”  The president said exactly the same thing a few weeks before I expected him to order Fashola to get all Lagos school kids line up at the airport to welcome you, the savior of Nigeria’s economy.

 “There has been a lot of debate on fuel subsidies and we have all resolved that (removing it) is a good direction to go on.”  First of all, Doctor, who are the “ALL” because most Nigerians will like to know.   This phantom has stood in the way of Nigeria’s development – if we must believe presidents and proxies dead and alive.  The current president who sees Nigeria’s Economic Czarina and savior in you – already aired the subsidy removal before your trip to Russia prior to Nigerian arrival.

My belief that you have nothing new to offer based on your press conference, finally, is this: “Recurrent spending accounts for 74 per cent of Nigeria’s N4.5 trillion ($29 billion) budget.  she plans to trim spending to ‘a more reasonable figure’ of 70 per cent within four years.” 

All Nigerians will agree with you that 74% is an ‘unacceptably high recurrent expenditure’ of a budget but as a person the whole world tells Nigeria we should be grateful to as the president has announced, a promise of 4% cut is unacceptably low.  I’d expect Nigeria as a Case Study to an MBA class at any acclaimed university should be able to turn up some interesting reports that would show the possibilities of double-digit cuts in that kind of ridiculous recurrent expenditure.

Recently on August 10, I submitted an essay on “federal” government civil servants who, rather than leave when they reach the mandatory retirement age, become “consultants” drawing fat paychecks while still occupying the same seats they had sat on for decades. Gratuity would have been collected and pensions are also on. A reader of this blog had turned in comments alerting me of this new scam at Abuja.

Unproductive use of recurrent expenditure.  Kick them out and see that an immediate stop is put to this racket.

I do not have to teach you your job, Madam, but there are zillions of ways to cut recurrent expenditure without any fall in service delivery – not that much, anyway – if all most of those advisers, assistants, including Aso Rock tailors, make-up artists, etcetera are considerably reduced.  And that’s just for starters.  Your office that now sounds like a Vice Presidency – of sorts – must have quite a few people who will not be missed if they are given the  ‘so longs’!

How about the National Assembly members that get paid many times over for doing the same thing:  salaries and perks; committee allowances and perks, etcetera.  Why would these people get paid for sitting on committees?  These form a heavy burden on “the system”, not the cutting off of “external borrowings”.

74 percent recurrent expenditure is not only “unacceptably high” but must rank as one of the BIGGEST governments in the world.  To aspire to cut that figure by a miserable 4% does not show a commitment to force Jonathan’s government to live to promises he made and continues to make about reducing government expenditure while he builds BIG bureaucracy.  That would be an unacceptably low returns not just  for Nigerians’ high expectations but your education, expertise and experience.

Dr. Iweala, I’ve written several times on why you cannot work for the interest of Nigeria, no matter how patriotic because you cannot serve two masters.  The World Bank where you’ve risen almost to the top sees developmental issues and the routes to them as you see them; pardon, me, take that the other way round.  Most of us do not realize that your employer, The Bank, receives commissions for loans it secures for really wretched countries and profligate ones like Nigeria.  Nigeria’s profligacy led one of your Bank colleagues some years ago to come up with what may sound outrageous:  he suggested – in his personal capacity, he said – that Nigeria should just share the oil revenues among citizens since we receive next to nothing from the immense wealth.

Would The Bank be expected to discourage “external borrowings”?  Of course, not.  The cushy lifestyles of its employees compared to workers with same qualifications in America where it is located is one of the reasons why there has been resentment against your organization in the U.S., especially Washington, D.C. where The Bank is headquartered for many years.

I am one of those who believe there is nothing good that is likely to come of your new tour of duty here.  If the Presidents of the World Bank, the African Development Bank, etcetera are brought in together to run Nigeria’s Finance Ministry, that effort would come to naught if the same profligacy attitude of amassing Big Government, big-time corruption, and seemingly clueless policies are pursued.

Good Doctor, forget phantom “subsidy” because it’s been removed zillions of times.  Cut your own staff and make the list public as a sign of good faith.  Have your boss do the same.  Forget these Debt Traps that you once condemned but are now encouraging.  Suggest to your boss – as Professor Adamolekun, formerly of The Bank did in his “Inauguration Lecture” to publicly declare his assets and those of his wife, Patience Jonathan – AND those of his ministers.  He promised “fresh air” and a “transformational leadership” that would fight corruption but all we are getting are the stench of old time corruption and business-as-usual leadership style.

By the way, Dr. Iweala, that answer-back to wazobiareport.com is an embarrassment that belittles you because it read as if you did not check out the site after one of your go-fers brought “an attack” by one of those who are against your coming – to your notice.

If Jonathan delivered on his campaign promises, your job would be easy and Nigeria would be a great country.

Advertisements
, , , , , ,

Subscribe

Subscribe to our RSS feed and social profiles to receive updates.

No comments yet.

Leave comments

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s