EARLY in the life of the administration of the All Progressives Congress (APC) we had cause to express misgiving, indeed alarm, at the utterances of the governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele. At a time last year we thought and said that the governor’s conduct was pathetic. In, or about, July last year, which was barely two months after President Muhammadu Buhari assumed office, Emefiele claimed that the marginal accretion to the foreign reserves of Nigeria was as a result of the magic wand of the president, his prudent management of our resources, the loopholes he had plugged and his fabled body language. Our CBN governor was obviously struggling to outdo other fawning politicians to ingratiate himself to the new man in power. Some Nigerians were alarmed at that level of groveling by a man who is heading an institution that is supposed to be apolitical and independent. It was about the same time that the now ousted and hunted chairman of the Economic and Financial Crimes Commission (EFCC) Ibrahim Lamode turned every available platform and every opportunity in front of national television to a soapbox of how he would hunt down and exact maximum punishment on all those who were suspected of being corrupt. Apparently Buhari was not impressed by Lamode’s theatrics. Lamode was removed and became himself a hunted man.
I wager that Emefiele, in spite of shenanigans, survived because he has a tenured office and the new government probably wanted to avoid the type of cloud that enveloped the tail end of his [Emefiele’s] predecessor in office. Last weekend Emefiele addressed media chiefs in Lagos on the flickering light he sees at the end of Nigeria’s recession tunnel. He spoke well because he talked up the economy. It does not matter much that his optimism rested on a sinking sand. And then he veered into competing with partisan politicians. “We are already in the valley, the only direction to go (is) up the hill and the government is doing everything possible to ensure that we move up the hill”, he started. “I am optimistic that based on the actions being taken by the monetary and fiscal authorities the fourth quarter results will show evidence that we have started to move out of the recession”. Then Emefiele added: “The worst is over. The Nigerian economy is on the path of recovery and growth. So, please if you are a bystander or sideliner, you are losing, join the train now before it leaves the station”. REALLY! In all my adult life I cannot recall any central bank governor here or elsewhere speak in such pedestrian, motor park, manner. What could make a distinguished former deposit money bank boss speak in such a manner? Even if Emefiele were to be removed today for not demonstrating public ‘loyalty’ to oga at the top, he is not likely to struggle, along with his family, to lead a fairly decent life. We will leave the matter for another day.
It is heartwarming that leading lights of the APC economic management team [EMT] are beginning to learn the language of talking up the economy and rolling back from looking for who to blame. Finance Minister, Mrs Kemi Adeosun is pitching in. The Budget and National Planning Minister, Udoma Udo Udoma is also on the roll. I will not remind him that he told Nigerians that by this month when the budget would have run for three solid months, there would be a public display of the scorecard. It would be deemed unfair to demand for the government’s result sheet at a time of ‘desperate hunger’ in the land (Apologies Senate president Bukola Saraki). But talking up the economy will not endure until the man, our President Muhammadu Buhari, who appears to have made a commitment to speaking ill of Nigeria and Nigerians in the name of calling a spade a spade is fully recruited into the team. He was the man who approved, albeit reluctantly, the floating of the Naira and then turned around a few days later to publicly bemoan the resultant devaluation of the beleaguered national currency. One word from him and this optimism will vanish. Meanwhile, it was an irony to see Buhari in the U.S. lap up the praises lavished on him by President Barack Obama for the courage in floating the Naira.
But in truth Buhari does not need to speak for the hollowness of this economic recovery optimism to evaporate. The evidence before our eyes does not support the claim that we are about to turn the corner, even if majority of suffering Nigerians want to see that. Listening to our economy managers, part of the plan is for government to spend us out of recession. The government claims to have injected N800bn into the economy on capital projects in the short life of the 2016 budget. The claim is not verifiable but even if it is true it is like a drop in the ocean. This is a famished economy that needs gargantuan reflation. And the money is just not there. The collapse in the price of crude oil has ensured that. The CBN has promised a bridge facility ahead of the government accessing an offshore loan but a central bank that is battling inflation can only do so much. While Adeosun would not mind a little more inflation in return for economic growth, Emefiele is more interested in reigning in inflation because of what it means for his own job. Indeed, the CBN monetary policy committee (MPC) announced on Tuesday that it was keeping lending rate at the current 14 per cent. What this means is that the monetary and fiscal authorities are not agreed on what should be the lesser of two evils in the quest to get us out of recession – a little more inflation or growth of the economy. As the key figures in the EMT squabble, they should take to heart the counsel of the Director-General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, who spoke in the wake of the CBN decision on lending rate: “Fixing the problems requires proper strategic responses from the fiscal, monetary and political governance fronts. And these response actions are not necessarily mutually exclusive. Indeed, they should be taken together. The economy surely has profound issues with infrastructure, but high cost of funds is also one of the major problems, which investors are worried about. There is a need at this point to agree on what the national economic objective should be. This is why I agree with the proposition to have a retreat among the key actors in the fiscal, monetary and political governance space to agree on a common direction and strategy to rescue the economy”.
Those who see the end of recession by year-end are suffering from blurred vision. In our next post we will examine other issues that could hamper sustainable recovery including the energy factor, trouble with the banks, citizens cynicism and despair, Baba go slow who also as Baba Ijebu sees spending as avenue to steal, the cost of funds as a veritable disincentive to domestic production, the possibility of creating jobs abroad by massive injection of cash into the domestic economy, the scarcity of foreign exchange, the low price of crude oil and militancy in the Niger Delta, federal government’s mistrust of the private sector, the conspiracy in the planned sale of choice and performing national assets, the scheme to borrow from our children and from our collective future, among others.