By Olisa
Godson Muojama
After the
independence of Nigeria in 1960, Nigeria started with parliamentary system of
government. In this system, there was a Governor-General, who was Head of State
and a Prime-Minister who was Head of Government. In 1963, Nigeria adopted the
Westminster parliamentary system of government, in which power was shared
between the President and the Prime Minister. This system was truncated
following the incursion of the military into Nigeria’s politics in 1966 and the
concomitant suspension of the constitution. The civilian rule that commenced in
1979 adopted the presidential system of government. In this case, there was a
President who was both Head of State and Head of Government. But this
arrangement was again toppled by the military in 1983.
The
return of democracy to Nigeria in 1999 heralded the return of presidential
system of government. However, in what appeared to be a distortion of the
presidential system of government, Goodluck Jonathan has conferred on the
Minister of Finance the position of the Co-ordinating Minister, a position
which most people have stigmatised as that of a Prime Minister and, ipso facto, inconsistent with the
presidential system of government.
The
conferment on the Minister of Finance the position of the co-ordinating
minister of the economy is on the supposition that the Minister of Finance
would be in a better position to manage the economy. However, this idea may not
always be true. It is possible that someone may be an expert in finance
management without being an expert in the management of the national economy.
Finance is just an aspect of the economy. Therefore, anyone capable of managing
the country’s economy should not only study finance, but should understand the general
workings of the economy, most especially macro-economy in a globalised world.
By extension, the person should also understand the laws of motion of global or
world economy.
Evidence,
from the organisation of Nigeria’s economy, shows that the minister of finance
in Nigeria may not have acquired this holistic training in macroeconomic
management. If at all she had attempted such training, it appeared she did not
complete it. The uncoordinated,
disjointed, and disarticulated nature of the Nigerian economy shows that there
is a problem with the ministry of finance, Central Bank and macro-economy of
Nigeria in general, typified in the policy summersault that has characterised
the ministry’s agenda. Examples of this claim abound in history of her
activities in Nigeria:
President
Olusegun Obasanjo hired the current Minister of Finance from the World Bank
during 2003-2007 dispensation. Her arrival was greeted with shouts of Uhuru and
with high sense of acceptability due to the credibility she had, even before
assuming office. This misplaced extempore
credibility derived from the fact that she was educated at Harvard and that she
was working with the Bretton Woods institution. It also derived from the fact
that she is a woman, on the illusive pretention that women are motherly and
more humane than their male counterparts, most especially when it comes to the
issue of welfare. This hypothesis was to fail in Nigeria, upon her arrival. No
sooner had she taken office than it became obvious that her ultimate interest
was not in improving the lots of the Nigerian masses, but in the misguided
experiment of neo-liberalism, the mantra of the Washington Consensus.
For
instance, she started with privatization of public corporations in Nigeria,
which analysts have described not only as a caricature of privatization, but as
a rape on Nigerians. Privatisation is a good economic wisdom if it is properly
handled. For instance, after the collapse of the Eastern Europe in 1989 and the
Soviet Union in 1991, economic reforms followed: a transformation from
centrally planned economy to market economy. Poland alone had 3, 177 state
enterprises in industrial sector to be privatised. This transformation required
comprehensive action on three fronts: macroeconomic stabilisation,
liberalisation of economic activity and privatisation of state-owned
enterprises.
Macroeconomic
stabilization is the overall function of national economy. There are various
measures of stabilizing the macro-economy. It involves Fiscal policy: a
programme provided for a tightening of fiscal policy to restore a balance in
the general government accounts. The goal was to cut subsidies to reduce
expenditures, and eliminate tax reliefs yielding additional revenues. It also
involves credit and monetary policy, which means ceilings on Net Domestic
Assets (NDA) of the banking system were imposed, allowing for national growth.
Liberalisation
of economic activities means the opening up of the market and sectors
previously monopolised by the state to private participation. To achieve this,
there are various measures: Price system in which price controls were removed.
Prices are to be fixed no more by the state, but by the operations of the
market through demand and supply. It also involves Exchange and trade system in
which foreign exchange could be provided without restrictions for most current
transactions, as opposed to the previous system of rationing.
Privatisation
means the transfer of public owned enterprises to private owners. It is
creating anew the basic institutions of a market financial system, including
corporate governance of managers, equity ownership, stock exchanges, and a
variety of financial, intermediaries, such as pension funds, mutual funds, and
investment trusts.
This is
textbook economics, beyond which you find the theory of enlightened self-interest
which is silent in conventional economics textbook and which is obscure to the
Goodluck Jonathan’s economic team. There is no gainsaying the fact that the
Minister of Finance is implementing some strange textbook economics. She
perhaps did not learn the theory of “moral sentiment” propounded by Adam Smith
(the Father of free market economy which she claims to be championing) and
popularised by Amartya Sen, the Indian economist.
For
instance, one of key points in the strategy of privatization is that much of
the privatization should be accomplished through the free distribution of
shares to various groups, including workers, pension funds, and mutual funds,
rather than through the sale of shares in an initial public offering (IPO).
This did not happen in Nigeria due to the religious implementation of the
dictates of textbook economics, and the neo-liberal jargons of the Bretton
Woods institutions. She might not have read the book of her former boss at the
World Bank, Joseph Stiglitz. In his book, Globalisation
and Its Discontent, Stiglitz (2002) notes that privatization should follow
the trend of sequencing and spacing, that is the theory of ‘gradualism’, or ‘two-track
approach’, not the ‘big bang’ approach employed by our honourable Finance
Minister.
Another
illustration to demonstrate the uncoordinated nature of the Nigeria’s economy
is the debt buy-back. In 2006, Nigeria shocked the whole world when the
government paid 12 billion dollars to the Paris Club in exchange for a debt
cancellation estimated 18 billion dollar. There is no country of the world that
is not in debt. American government finances the consumption of its citizens
through debt, as has been demonstrated by Taggart Murphy (2006) in his article
“East Asia’s Dollars”. Therefore debt repayment by the Nigerian government with
the advice of Madam Minister is nonsensical and an antithesis of developmental
economics. It is the greatest disservice one can commit against ones country. Such
money could have been used to provide social security to the citizens of the
country, provide stable electricity, provide quality and sound education for
Nigerian citizens, and provide good roads, good water supply, good sanitation,
good housing scheme and good infrastructure. Under Goodluck Jonathan new debt
procurement has resumed. This is a deliberate ploy to keep Nigeria in perpetual
debt trap and to perpetuate herself in office. According to Aluko and Arowolo
(2010) “Countries entrapped in foreign debt have some perceptible symptoms. Representatives
of the creditor institutions take over strategic financial institutions of the
country such as the central bank and the finance ministry to mention a few.
This is done to monitor and ensure that no resources are misappropriated or
diverted to anything other than servicing the external loans.”
Obasanjo’s
administration ended in 2007, followed by Late President Yar'Adua’s
administration. The death of Yar'Adua threw up Goodluck Jonathan as president
(an incident which he has always touted as part of his achievement as a
president, as he stated in one of his interviews with the CNN). Goodluck
Jonathan not only invited the madam Minister again, but made her the
coordinating Minister of the [uncoordinated] economy. This, many think, is a
second missionary journey that will enable her to complete the destruction
of Nigeria’s economic fabric and the
gang-rape of the Nigerian citizenry using the benefit of purported textbook and
boardroom economics.
As a case
in point, she started out with subsidy removal from petroleum products, the
natural resource derived from Nigeria’s backyard. Her and CBN Governor’s
argument was that subsidies are not placed on consumption, but on production,
another textbook, classroom, and boardroom economics learned by the duo from
their respective classrooms, without exposing themselves to the nitty-gritty
and practical details of development economics as practised in the developed
countries of the world.
It will
be pertinent to remind Madam Minister and Mr President that by American
standards and by its poverty measure over 90% of Nigerian citizens are poor.
For instance, lecturers in Nigerian Universities (for instance) from the cadre
of senior lecturer down the ladder are all poor by American standard! To be
sure, in the United States, the Federal Poverty Level is used by the US
government to define who is poor. The Federal Poverty Level is used to
determine who receives subsidies or aid from the government. See http://useconomy.about.com/od/glossary/g/Federal_Poverty_Level.htm.
“It is based on family’s annual income rather than their total wealth, annual
consumption or their own assessment of well being.” Its origin is owed to
President Johnson’s war against poverty. From this War on Poverty came many of
today's programmes such as food stamps, Medicare and Medicaid. “For 2013, the
Federal poverty guideline is an annual income of $23,550 for a family of four.
For example, a single-person household is considered poor if his or her annual income
is $11,490 or less.” Unfortunately, the annual salary of a lecturer II in Nigerian
Universities is less than $11, 490.
What this
means is that the government of the US is spending money, putting subsidy and
financial aid on consumption by its citizens not on production. Food stamp
enables families in the US to obtain food using their government subsidy and
aid, just as Medicare, Medicade and Obamacare assist the American citizens
to enjoy state of the art medical attention with subsidies from the government.
This is social security which makes it impossible for any American citizen to
fall below a level considered as degrading to the humanity. Unfortunately, in
Nigeria we either have semi-literate leaders or wicked leaders or both. It is
this myopia that the co-ordinating ministry of uncoordinated economy has brought
to bear on ASUU-FGN negotiation.
ASUU has
gone on strike since 1 July 2013 in order to get the government to implement
the agreement it willingly entered into with the Union in 2009 based on
collective bargaining. In 2012, the Government of Goodluck Jonathan signed a
Memorandum of Understanding on how the rot in Nigerian Universities could be
addressed. It agreed to inject 100 billion Naira annually into the education
sector, starting from 2009. Up till date nothing has been remitted and the debt
has now aggregated to 400 billion naira. Again, from the 2009 ASUU-FGN
Agreement, the government should also pay earned allowances to university
workers as a whole, not to ASUU members alone. Up to date nothing has been paid
and the debt has amounted to 92 billion naira.
Remember,
the total amount of the arrears of earned allowances between 2009 and 2013
amount to N92b, which the Minister of Finance interpreted as 15% of the
recurrent expenditure of 2013 budget, without stating what has happened to the
fund allocated for that purpose in the previous budgets of 2009-2012. She insisting
that government had no money and could afford to pay only 5% of the recurrent
expenditure of 2013 budget, which amounts to N30b.
The figure
was not derived from any logical bases, but from unfounded fiscal policy. What
this means is that government has arbitrarily awarded payment to ASUU, without
basing its judgement on any formula derivable from collective bargaining. This is
tantamount to negation and abrogation of the Agreement which government
willingly entered into with the Union in 2009, as well as the Memorandum of
Understanding it also signed with the Union in 2012.
It was at
this point that ASUU declared a nationwide, total and indefinite strike
starting from 01 July 2013. Up till today, Madam Coordinating Minister and Mr
President are still brandishing N30b which emanated from calculation
summersault. Therefore, if ASUU goes back to work because of the award of a
paltry sum of N30b, it means that the essence of the strike has been defeated,
and that we have wasted our time.
From the
foregoing, it is clear that a return to status
quo ante will amount to a waste of precious time and a betrayal of the
spirit of fairplay and collective bargaining; principles we hold so dear in our
union and in our classrooms. There can be no governance as planless and as
unprincipled as we presently have it. We cannot afford to put the future of
generations yet unborn on the line and pretend that we are only being
gentlemanly.
The asset
shoreup of these political office holders holding the country to ransom has
multiplied in their billions since they became office holders and coordinators
of the economy that even they are afraid to openly declare their assets. All we
hear of is that gone are the days when they have no shoes and singlets. It is a
gargantuan irony that it is the same set of individuals who now collaborate
with Bretton Woods stooges to gangrape their own economies and cut off the feet
of the unborn.
We call
on all well meaning Nigerians to stand up and say no to sabotage and slavery,
and save their own people from the shackles of a heartless comprador class
whose mainstay is the conversion of politics to trade and mindless corruption.
The Arab spring is around the corner and we can feel the effect just down the
road from us. Now is the time to stand up to a purposeless class of rulers
whose business is to ruin the future of our children and our children's
children.
For Communications and Information Committee, ASUU-UI .
Edited By Kay Bello.
No comments:
Post a Comment