Pressured by criticisms over the poor management of the economy, President Muhamardu Buhari may re-jig his cabinet in the coming weeks to bring in new persons with fresh ideas, specifically to retool the macro and fiscal economic policies.
The economy is battered and corrupt public officials, with their accomplices in the private sector and some greedy politicians, have been fingered. They allegedly colluded and fleeced the economy, while efforts to tame the inflation scare have been lacklustre, and leaving the citizens at the mercy of poor policies, driven by saboteurs and lethargic government officials.
Currently, arrangements have advanced to engage technocrats whose main focus will be to stop the bleeding, plug the loopholes and recover looted government revenues kept in different banks globally, while the local banks which allegedly hold about 60 per cent of such stolen money will be the first to feel the impact.
The new persons are expected to align with the new focus at the presidency that dwells on three goals of combating insecurity, prevailing on all the agitating ethnic groups to work for a common national goal, and retooling the economy to regain the confidence of the Nigerian populace.
The economy, InsideBusinessNG learnt is the main focus according to a presidency source who reveals that several of the crises that beset the country will cease once the economy looks up.
Although details of the new persons to come in are still sketchy, they are touted as proven technocrats from different fields in the private sector. Their work specifically focuses on the economy and in tandem with the presidency’s desire to achieve the three key goals as the Buhari administration faces a compelling task of rebuilding the economy if it is desirous of leaving a lasting legacy.
Garba Sheu, the Senior Special Assistant on Media to the President has not commented on the clarification sought by InsideBusinessNG on the anticipated cabinet appointments while Femi Adesina replied enquiry with pleasantry.
In the months to come and once the appointments are announced, all the agencies and institutions that are involved in Nigeria’s economic management including the Central Bank of Nigeria (CBN), Ministry of Finance, Budget and National Planning, Federal Inland Revenue Service (FIRS) and others will be ordered back into line for the common goal of saving and rebuilding the tottering economy.
A comparison of the state of the nation between 2015 when the Buhari government came in and the present 2021 is disturbing. The inflation rate which was Nine per cent as of 2015, now stands at 18.12 per cent, food inflation that was 10 per cent then, is now, 22.72 per cent while the unemployment rate which stood at 8.2 per cent in 2015, now stands at 33.3 per cent.
The exchange rate was N165 to $1 in 2015 but has jumped to N501 to $1 while the nation’s public debt has jumped from N12.12 trillion in 2015 to N32.915 trillion in 2021
Government officials confided in InsideBusinessNG that both the CBN and the Finance Ministry will come under greater focus for their roles in retooling the economy and they will have to work together, not minding the disquietness between the two that has led to disharmony in the management of the economy. CBN manages the macro while the Finance is in charge of fiscal. The two, it was alleged, are not always in harmony on policies to move the economy forward.
The banking system will also come under focus owing to the huge volume of stolen funds in its closet which the new appointees will have the mandate to retrieve for reinvestment into the economy.
Abuses such as insider and non-performing loans granted to bank executives, politicians, private sector operators with influences in the banking sector will also be revisited as part of measures to reform the banking system and instil discipline which the CBN is allegedly failing to do.
Banking industry sources alleged that the apex bank had failed in some areas in the management of the industry hence the huge volume of insider abuses and non-performing loans.
They alleged that the apex bank is compromised and that explains its inability to effectively order banks to tighten their risks control measures to prune the huge volume of abuses in the system.
It would be recalled that the huge volumes of insider loans that are non-performing led to the liquidation of several banks in the past. A recent experience is Skye Bank that metamorphosed into Polaris Bank but had to be rescued with huge palliatives from the CBN from going under with depositors’ funds.
CBN sources cited a former deputy governor of the bank who borrowed huge billions of Naira for a family business but which has not been repaid 11 years after as an instance where the apex bank has failed in curtailing non-performing loan and insiders’ abuses.
Another instance is a former governor and, currently a minister in the cabinet of President Buhari’s administration, whom, they alleged also secured huge facility from the CBN some years back, using his company whose directors include the minister, his wife, brother, and son with his house address as the office.
The loan which is still not repaid and non-performing is being used for buying and reselling foreign exchange according to a bank’s documentation. This is said to be part of the reasons why the apex bank cannot effectively manage the Naira and the forex market.
Osita Nwanisobi, the apex bank’s spokesman refused to comment when he was asked about the CBN’s loans to some VIPs in the current administration.
“I want to board a flight and will be happy if I could get your queries written down and send to me” was Osita’s response two weeks ago.
Up till now, however, the CBN spokesman has not replied to the query sent to him on 28th, May 2021, via his phone, and also, a reminder to his email address on Monday 7th June.
This habit to dodge questions is a confirmation that the apex bank is hugely messed up and its officials are always wary of critical media enquiry.
InsideBusinessNG in November 2020 had informed that six technocrats would be joining Buhari’s administration to re-jig the economy in measures to leave behind a legacy by the regime that is currently, lacklustre.
President Buhari is said to have favoured a Super-Minister’s structure that places the technocrats over the existing cabinet members to which all the ministers will report. Regrettably, the Nigerian constitution does not support such structure and plans to harmonise positions have delayed the mini-cabinet re-jig since last year.
Several meetings had been held between last September and now, and the three critical groups in the presidency have all resolved to give the economy some breather by agreeing that new persons with fresh ideas should come in.
InsideBusinessNG learnt that announcement may be made anytime from now so that the administration can begin the efforts to revamp the economy, two years to its exit as further delay could worsen the situation. The resolve for a holistic reform of the economy owes to the fact that concrete steps must be taken this year as electioneering for 2023 general elections will begin from next year during which governance could suffer.
Zainab Ahmed, Minister for Finance, Budget and National Planning assured last year that the economy will get better from the second quarter of 2021. Projections from both the International Monetary Fund (IMF) and the World Bank also seem to be in support of Ahmed’s assurance.
A fortnight ago, the National Bureau of Statistics (NBS) also said the economy grew by 0.5 per cent. while the World Bank latest report released 8th June projected a revised economic growth of 1.8 per cent The Bretton Wood Institution had previously in April projected 1.1 per cent economic growth for 2021.
Soothing as these assurances and the projections were, indices from the market and the current realities in the economy run contrary as prices of consumer items and foods have hit the roof, forcing criticisms of the latest inflation figure by the NBS. The nation’s statistical agency stated that the inflation rate tumbled to 18.12 per cent in April from 18.17 per cent in March
InsideBusinessNG’s check at the markets at both the Northern and Southern parts of the country as of last weekend shows the country is flirting with hunger as prices of items increase on daily basis.
Also, the increasing decline of revenue to the national treasury is creating hardship to the federating units. For instance, N668 billion was shared by the Federal Accounts Allocation Committee (FAAC) among the federal, states and the 774 local government councils as April allocation. This is a drop of N64 billion or almost 10 per cent of the distributable funds for the previous month.
The drop in allocation to the federating units has given projections of increasing labour unrest as the trio of the federal, states and local governments are already finding it difficult to meet their obligations.
Last Friday in Ekiti, the state government had to slash the salaries of its political appointees and other top government officials by 25 per cent between May and July 2021, as well as signing a pact with the organised Labour to keep the unions at bay. This was achieved after a series of meetings on the state of its finance occasioned by the shortfall in the allocations from the Federation Account.
The shortfall imposed an expenditure deficit of N750 million per month on the Ekiti state, leaving its treasury in dire straits.
The consequential adjustment of the new minimum wage approved by the state government for officers on Grade Level 07 to Grade Level 12 would also be put on hold for three months effective from May to July 2021.
The state government also reduced the monthly Running Grants (RGs) to Ministries, Departments and Agencies (MDAs) to reflect the current economic realities. This is in addition to the release of 10 per cent of the Internally Generated Revenue (IGR) being the state responsibility to the state Joint Account Allocation Committee (JAAC).
Ekiti state is not alone in the efforts to cut overheads to stay afloat, Niger state had taken similar measure while Kaduna state is still on the opposing sides with the organised labour on measures to stay afloat