Getting Nigeria’s economy back on its feet

Putting back the economy on its feet.

Background: We have heard of public funds going missing without trace. Committees are set up, jaw dropping revelations are made but we hardly ever see the money reappear. Now this has been going on for decades.

Problem: The economy used to be stronger and so it could absorb those immense leakages. But now we have a real situation on our hands. Our reserves are petty. Price of crude oil has slumped. The economy can’t absorb the effects of those leakages anymore, as evidenced by upward change in inflation, unpaid salaries and rising unemployment. We are at a critical point. What do we do?

Options on the table:
Drop fuel subsidy
Slash salaries of government VIPs
Recover stolen monies that have been identified but stashed abroad…

These may make sense. They may have a multiplier effect to lift hundreds of thousands out of dire lack. Backlog of unpaid salaries could be settled.

But…

Are these measures sustainable? And would gains made from subsidy removal not be cancelled out by inflation?

Our policy makers and economic engineers surely have a lot on their hands at this time. And that’s exactly why they are there at a time like this: we trust them with political power to fix the problems and get us lasting solutions.

Here are a few points I would advise these people to consider according to their wisdom and facts in hand. It is hoped that these folks see a bigger picture of what’s happening than the rest of us. So while the electorate may think it’s such a simple thing to fix, these public office holders may be seeing a terrific network of issues to resolve before we get back running and fine. I recognize that. So I gently share my points.

First, let’s make sure it’s impossible for public funds at all government levels to disappear without a trace. The rate at which this thing happens year to year, agency to agency, ministry to ministry, is not only appalling but suspicious as well. I suspect there are back doors and loop holes designed into our public purse that makes it just too easy to loot and many times without a trace. I’m not talking of something the government does for the camera. I’m talking of real work here. This goes beyond a single treasury account. The cash flow path and how these monies are withdrawn and spent need auditing.

There ought to be greater transparency. This is less about declaration of assets, and more about how often financial and project audits are done to make sure the system is running fine. We now see a new form of fund diversion. Money is paid out and we see why and to whom. But on closer look, we see there is no connection between the ‘why’ on paper and the reality the public faces. One such case was uncovered in one of our pension scheme investigations. A project was made to capture biometric data of pensioners for good reason. An estimate was made and approved. A company was signed on to do the job. The money was paid out but the job wasn’t carried out! And people didn’t know about it until for a long time. So we need a structure that tells everyone how the money comes in, how it goes out and what exactly it does after it leaves.

We also need to make it possible and safe for whistle-blowers to expose crafty crimes. We also have to make it possible and safe for the judiciary to attend to these matters. Whistle-blowers tend not to whistle if they feel unreasonably exposed to danger. We haven’t protected whistle-blowers enough. They become victims for trying to correct the system. It has happened again and again to people who try to do their jobs conscientiously. It has happened to a former EFCC boss and a former CBN governor, just to cite two a (well known) examples.

Those people were deemed powerful, yet they were tackled badly. What is the fate of the average Nigerian who is just being patriotic and blows the whistle on corrupt practices? We need whistle-blower security. It would go a long way in tackling corruption and guaranteeing our free markets.

I also suggest that we simplify the bureaucracy around the way the government does business. The complexities encourage shady lobbying, thereby providing an atmosphere for bribery. These complexities also create an environment too large and vague that these businesses can’t be properly monitored. I believe people in position can audit their work processes, detect what is unnecessary and encumbering, and cut them off.

Let’s make local entrepreneurship very, very accessible. This includes, free but monitored entry, access to loans, and implementation of copy right and patent laws. A colleague of mine was talking about how it was almost impossible to access a business loan from micro finance banks. One bank wanted a down payment in cheque of the amount the client was seeking to borrow. I think that’s just an elaborate way of saying ‘no’. Let’s review these micro finance institutions. Credit facilities should be upgraded and available for all. Yes, there are side effects of an elaborate credit economy, but most countries running such systems are doing superb. Let’s learn how it works and how to handle the side effects.

Outcome:
I believe that with greater accountability, transparency and a vibrant credit system in place, our economy would get on to the fast track in a very soon time.

God bless Nigeria.

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About Johnson Boyede

Johnson Boyede, B.Sc in International Relations. He wrote 'Addressing terrorism in Nigeria and possible spill over into West Africa' for his Long Essay. He contributes scholarly writings to an open facebook group, 'League of Diplomats'. He agrees and runs with the opinion of Paul Romer that, "Knowledge is a non-rival nature and only partly excludable... In an open society, knowledge's non-rival nature means that a piece of new information can be used over and over again, by different people, in varying contexts and to make new things...one good piece of knowledge will live several lifetimes, undergo different iterations and be put to ever more unique purposes."
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