By ODILIM ENWEGBARA.
The 2019 budget has no funding or is yet to be funded. This happened because hundreds of billions of naira had been diverted to the conduct of the most expensive general elections in Nigeria since the return of democracy. It was for the ruling party a “do or die” general elections.
That is why the government can only continue to be fatiguing as it tries to pay salaries. Compounded by the N30,000 minimum wage and the growing difficulty to raise N2.04 trillion for the debt service obligations for the 2019 fiscal year.
Also there is the fuel subsidy scam government has to contend with. This government has accepted that rather than discontinue with this massive fraud called fuel subsidy, it now pays each year the amount Johnathan administration paid during his entire four years in office while keeping fuel pump price half of what it is being paid today under Buhari.
In the meantime, revenue is nowhere to be generated. Especially with the economy still growing sluggishly revenue is far behind in debt in growth. And without oil price rising in the global market along with increase in oil supply, government cannot raise the critically needed money needed to fund its recurrent spending let along its capital obligations.
Worsening the situation is the fact that at 69% debt service to revenue ratio it has become extremely difficult for government to still find willing lenders without having to borrow at cutthroat rates.
In the absence of a minister of finance, the chief banker of Nigeria Godwin Emefiele has besides, churning out cheap naira and handing it to government to spend outside appropriation, Emefiele now doubles as the fiscal policy czar also handing out hundreds of billions of naira to the politically motivated so-called anchor borrowers. As if not enough, the same chief banker of Nigeria, is now also the Controller-General of customs as he now goes after the so-called smugglers.
Nigerian food supply can’t be in its worst situation. Making importation the only option too is further draining our scarce forex.
And there is no worse resultant effect of the herdsmen and bandits taking over farmlands than farmers, now afraid of becoming either killed or kidnapped have since abandoned their farmlands now lying fallow.
Genuine foreign investors have been quietly leaving Nigeria since the discovery that Buhari shows no interest in private sector participation in the economy. But by witnessing the kind of way INEC conducted the 2019 general elections which only reinforced that the country is not yet serious with its democracy, most foreign investors have quietly left the country who in most cases were warned by their governments to stay away from Nigeria’s economy. And to confirm this, Bloomberg recently warned that whoever wants to lose money should just put it in Nigeria.
The human carnage called the 2019 general elections and the accompanying anger, disappointments and mistrusts will require years of reconciliation before a united citizenship is brought back to Nigeria.
As if Nigeria has not had enough negatives, there is also the looming bankruptcy. Given itsĀ potential social and security disruptions, to say that it is frightening is only an understatement. Even if we are seeing the potential tsunami, foreign investors are afraid of getting caught up in this.
It is for these same reasons that domestic investors too are either relocating or simply sitting on the fence waiting to clearly see how the presidential tribunals will go. The fear is, should it end up allowing the status to continue, and should that trigger uprisings, that is going to further drag down the economy.
Thus, allowing Buharinomics — which has shown itself as a feudalist socialist economic system — to continue is to allow the decimation of the private sector in the Nigeria’s economy to continue with such consequences as the poverty capital of the world and the most insecure nation in the world without officially witnessing civil war. No one can expect private investment to thrive.
With no cabinet yet, it means delays in both the implementation of the 2019 budget and in the preparation of the 2020 budget. It is obvious from this scenario that the same way the delayed formation of cabinet at the beginning of his first term in office until October eventually led to the 2016 recession, the first recession ever witnessed in Nigeria, it is how the ongoing delay since May 29 to constitute his cabinet is only a pointer to another recession. That is why if it fails to happen before the end of the last quarter it must came calling as early as the first quarter of 2020.
Enwegbara, a Development Economist, writes from Abuja.
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