Emmanuel Onwubiko: Nigeria tormented by economic parasites

“We need to tell each other our stories. We need to show that everyone — our neighbors, our families, our community leaders — everyone we know is touched by corruption.” — Jennifer Lawrence, actress.

“Without strong watchdog institutions, impunity becomes the very foundation upon which systems of corruption are built. And if impunity is not demolished, all efforts to bring an end to corruption are in vain. “ — Rigoberta Menchú, Nobel Prize laureate.

PRESIDENT Muhammadu Buhari’s administration is signposted by the occupation of most of the ministers and top politicians working for the administration in semantics and debates regarding the origin of the Economic dilemma confronting Nigeria. And so instead of facing their front and implement their blueprints for the expansion of the economy and make Nigeria truly an economic giant in the World bearing in mind our enormous human and material resources that God and nature has endowed Nigeria with, what the government officials have done is to continue to argue like street children about who is to be blamed for our continuous economic decline.

There is this familiar street saying that only a lazy man quarrels with his tools. It can be said too that because the current administration has found it a little bit tough to navigate the economy of Nigeria into a place of pride, strengthen industrialisation, build up national strategic infrastructures and put the necessary measures in place to secure the lives and property of Nigerians in line with the Constitutional Provision that the primary duty of government is to protect lives and property of Nigerians, the government officials have decided to embrace semantic arguments as modus operandi.

And so few years after President Muhammadu Buhari took office, former Minister of Aviation, Osita Chidoka, had to counter the immediate past Minister of Transportation, Rotimi Amaechi, over comments that the money left behind by the administration of ex-president Goodluck Jonathan could not last for three weeks.

Amaechi spoke on Channels Television’s programme titled, ‘Hard Copy’ when he indicated that, “As former chairman of the governors’ forum, I was told by the security in a meeting chaired by the former President, including the former minister of finance, that at every point in time, the government must leave money behind in case Nigeria goes to war that would last for six months. By the time we came, they didn’t leave money behind that could last us for three weeks. And I was speaking at that time as the chairman of the governors’ forum.”

Reacting, Chidoka said, “I read with surprise and disappointment comments made by the Minister of Transportation, Mr Rotimi Amaechi, during an appearance on Channels Television

“The Minister’s comment is rather unfortunate and not supported by facts readily available in the public domain. As a member of the Federal Executive Council that handed over to the current administration, I am disturbed that this urban myth of “empty treasury” is still the subject of conversation by a senior government member.

“Also, I am confused about what the Honourable Minister means when he says, “By the time we came in”, as he was not appointed Minister until six months after the May 29 Handover. Since he was not a Minister on the handover date, it may be pertinent to present him with the facts again.
“On May 29, 2015, President Muhammadu Buhari inherited an economy that, by the testimony of the World Investment Report, prepared by the Geneva-based United Nations Conference on Trade and Development (UNCTAD), was the number one destination for foreign direct investment in Africa.

“In the five years of President Jonathan, Direct Foreign Investment stood at about 35.25 Billion Dollars. You can compare this to the 11.55 Billion Dollars Direct Foreign Investment received from 2016 to 2020.

“The Jonathan administration handed over a $550 billion economy (largest in Africa and 26th globally) and a diversified economy.

On May 29, 2015, President Jonathan left behind an economy with a stable currency, where the Naira exchanged for ₦199 to $1, and Nigeria had a single-digit inflation rate. Today, after 2406 days of the current administration headline inflation rate hovers above 15%.

“Under President Jonathan, the unemployment rate stood at 7.5% (better than European Union) today. According to the National Bureau of Statistics, six and half years after Governor Amaechi’s government came in, unemployment is 33%.

“Before the government came in, Nigeria’s poverty rate was 32% as of May 2015. We need not compare it against 71% today after 78 months of President Buhari’s administration.

“Our External debt as of May 2015 stood at $7.3 billion, the Gini coefficient (degree of inequality) was not different from China’s as of 2015. In 343 weeks and four days of the current administration, our external debt has ballooned to $37.9 billion as of September 2021. It is important to point out that over 48% are bilateral and commercial loans.

“With the facts above, I am sure that the Minister of Transport will rethink his fixation on the past and focus on the clear and present danger of an economy on the path to Argentina – sovereign debt default.

“In the face of declining revenues, available public data revealed that external debt servicing gulped $1.82 billion between January and September 2021; this is 43.9% higher than the $1.27 billion spent in the corresponding period of 2020.

“In the same period of January to September 2021, Domestic debt servicing rose to N1.74 trillion from N1.53 trillion recorded in the same period of 2020.

“These issues should worry the Honourable Minister, coupled with unlocking the asphyxiating gridlock that Apapa port has created in the economy.
“2406 days after, a clear 557 days (1 year five months) more than President Jonathan governed Nigeria; this administration’s economic policies and heightened insecurity have left the country comatose.

“Minister Amaechi and the APC government should stop this perennial blame game and focus on redeeming its tattered image by signing the electoral bill passed by a legislature it controls”.

Around August 3rd 2022, a prominent online medium reported that Nigeria nears economic collapse; external reserves down to $15 billion contrary to CBN’s $36 billion claim. Further it reported that with Nigeria spending N5.9 trillion on imports in the first quarter, irrespective of the preferred exchange rate, reserves of $15 billion would barely cover four months of import.

As Nigeria prepares for general elections next year that promise to be one of the most keenly contested in its history, evidence is emerging that the economy faces a double whammy: an empty treasury and rapid decline, so shouts the report.

Government officials and business leaders knowledgeable about the situation say there have been concerns in Abuja and Lagos after an elected official drew the attention of the Central Bank of Nigeria governor, Godwin Emefiele, to the fact that Nigeria’s external reserves amount to only $15 billion, well below the $36 billion balance on the gross external reserves claimed by the bank.

With the country spending N5.9 trillion on imports in the first quarter of the year, irrespective of the preferred exchange rate, reserves of $15 billion would barely cover four months of import.

Financial analysts claim this would not have mattered much but for recent difficulties in different sectors of the economy, especially the export constraints that have seen the nation’s petroleum monopoly unable to add to the reserves in the last six months.

The NNPC’s inability to remit oil sales receipts to the CBN, despite elevated crude oil prices, is seen as one reason why the naira has nose-dived recently in the parallel market. Even the NNPC and CBN are debating if what is reported is correct or not and so there’s a lot of confusion in the system nd the financial status of this administration has remained opaque abd there is gross lack of transparency and accountability.

Few days back, the media were awash with a story that President Muhammadu Buhari’s government had convened a meeting of governors to brainstorm on strategic approach to revitalize the collapsing economy. A thought that flashed through my subconscious is the amazement that Politicians can be this hypocritical to think that all Nigerians have short memories and therefore wouldn’t remember how the government from top to bottom brought about the ruination of the same economy that they now pretend like they are desirous of finding workable solutions to the mess they unleashed since 7 years ago. In 2018, Nigeria became the poverty capital of the World thus overtaking India which has over a billion population. Nigeria from 2018 became the home of 90 million absolutely poor people.

So if this government that push many into poverty now pretends like they have the magic wand to solve the conundrum, the truth is that it is difficult to imagine the possibility that parasites that ate up a body is capable of recreating what they actually destroyed through their actions and inactions. President Muhammadu Buhari’s administration operated for 7 years with no clearly defined Economic Advisory Council and so it practiced VOODOO ECONOMY for those years and then President Muhammadu Buhari’s administration with less than sixteen months to the end of his tenure, President Muhammadu Buhari then belatedly appointed Dr. Doyin Salami to serve as his first Chief Economic Adviser.

The economic historicity of the administration is that it has witnessed two recessions in less than seven years of its reign with the country taking a bottom position in key economic indices – unemployment and inflation among many others.

The administration has also been consistently knocked for its lacklustre management of the economy and dreary outputs of its policies, though the administration has consistently claimed to have inherited a “dying” economy.

However, all along, the office of the Chief Economic Adviser to the President had remained unoccupied. But two years ago, Salami, 59, a frontline economic scholar, was picked to head a hurriedly-inaugurated Presidential Economic Advisory Council (PEAC), which many said was established without reference to the National Economic Council (NEC) headed by Vice President Yemi Osinbajo.

Speaking on what difference Salami’s new appointment would make, a professor of economics and consultant to the Economic Community of West Africa States (ECOWAS), Ken Ife, said that “he now has executive power unlike in his previous office, which was purely advisory and on a part-time basis.”

Salami, a 1989 doctorate graduate in economics of Queen Mary College, University of London, until his recent appointment, was Managing Director and Head, Markets Practice, at KAINOS Edge Consulting Limited. He was also a member of the Adjunct Faculty at the Lagos Business School (LBS), Pan-Atlantic University, where he recently attained the rank of a senior fellow/associate professor.

According to a statement issued by Special Adviser on Media and Publicity, Femi Adesina, the Chief Economic Adviser to the President (CEAP) is expected to address all issues on the domestic economy and present views on them to the President.

The statement further said that Salami would closely monitor national and international developments, trends and develop appropriate policy responses and make recommendations to the President. He is also expected to pay attention to national economic policies to foster macro-economic stability, promote growth, create jobs and eradicate poverty.
He was a member of the monetary policy committee of the Central Bank of Nigeria (CBN) and the Federal Government’s economic management team.

Apart from leading sessions at Lagos Business School, Salami also consults for multiple organisations, including Department for International Development (DFID), World Bank, United Nations Industrial Development Organisation (UNIDO), and United States Agency for International Development (USAID).

Buhari has now set a record as the first President since the country’s return to democracy in 1999 to have led the country this far without CEAP. Former President Olusegun Obasanjo appointed Philip Asiodu as CEAP on his assumption of office. After Asiodu’s resignation in 2001, Magnus Kpakol replaced him immediately.

Before his death, the late President Umaru Musa Yar’Adua had Tanimu Yakubu Kurfi as Chief Economic Adviser while Dr. Goodluck Jonathan promptly appointed Prof. Precious Garba to occupy the office as soon as he stepped into office in 2010, so recalled the news writer.

BALA Zaka, an energy economist with a hard stance on Buhari’s performance, described the appointment as a vote of no confidence on the performance of NEC but said the decision “is not too late.

“If you have travelled a million miles and suddenly realise you are heading towards a wrong direction, the best decision is to turn to where you are coming from.

“So, it does not matter how many years the President has left. It is good that he makes the decision. If he succeeds in getting to where he started the journey, somebody else can take over from him. The good thing is that the President has confirmed that the National Economic Team was not doing well,” he said.

Zaka said many Nigerians would eventually commend the President for the appointment if it rights the wrongs with the macroeconomic outlook. He noted that if only it prevent the country from falling off the cliff, it was the best decision.

In a contrary view, David Adonri, a financial expert and stockbroker, said the appointment amounted to “crying after the head has been chopped off”.

He described the appointment as extremely irrational, wondering the difference Salami’s coming would make.

“The President had put together some of the best as members of PEAC headed by the same Salami. If he did not listen to the Council, I doubt if he will listen to him in his new capacity. At best, I think the new appointment is window-dressing; he would not have needed this appointment if he listened to them.”

Adonri also pointed out that Salami’s economic thoughts are at variance with the economic philosophy of the President and his team, He wondered how the marriage would work with the appointee holding an opposing view to his boss.

Salami, before his previous appointment as Chair of PAEC, had warned that the border closure, which marked the beginning of the current food price crisis, was not a sustainable strategy, urging the country to pragmatically reduce the cost of production to be internationally competitive.

The media observed that some economists have defined areas that the Federal Government should prioritise to speed up economic growth and development in the new year. Professor of Economics and Public Policy at the University of Uyo, Akwa Ibom, Akpan Ekpo, advised the Federal Government to aggressively implement the national development plan 2021-2025 to speed up economic growth and development in the New Year.

“For 2022, the government should aggressively begin to implement the national development plan 2021-2025; within that context, fix electricity supply and win back the confidence of the Nigerian people.

“If there is power supply for even 18 hours a day, micro and small enterprises would be enhanced and the economy would grow and generate employment. The era of jobless growth should be over.

“Another matter is that of insecurity. Government should do its best to restore peace so as to attract investors; peace would enable farmers to return to their farms,” Ekpo said.

Professor Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR) University of Lagos, urged the Federal Government to address some underlying factors that might impede economic growth and development in the New Year.

“Fiscal sustainability may persist given the persisting public debt burden and revenue challenges, which may be slightly ameliorated by the proposed increased taxation in 2022.

“Poverty may also persist in the economy with the proposed increased taxation and fuel subsidy removal, thus reducing both real and disposable incomes of the average Nigerian.

“Economic growth may be moderate in the region of two per cent driven largely by developments in the oil sector with marginal contributions from the non-oil sector,” he said.

Nwokoma, however, said there would be improvement in commodity prices, particularly crude oil and there would be gradual global recovery from the COVID-19 pandemic and improvements in livelihoods.

He urged the government to address the persistent state of insecurity, saying that its effects on agricultural production were enormous.

The truth of the matter is that President Muhammadu Buhari’s government is parasitic and so has no way of restoring the economy that the officials appointed based on nepotism have destroyed. We will read a report by another respected online medium on what Presidential Taskforce on EFCC discovered and then you will agree with me that the government has unleashed economic parasites on Nigeria. The reputable online medium reports that cases compromised by EFCC under Ibrahim Magu worth N333bn, $2bn, says Salami panel. Yet, President Muhammadu Buhari promoted this inept erstwhile chairman of EFCC from commissioner of Police to Assistant Inspector General of Police and till date he is walking free and still drawing salaries and when he retired as they said he has, he is earning his pensions. There is no accountability in the political lexicon of this government that for the politicians has become CHOP AND CLEAN MOUTH administration.

As noted above, the presidential panel that probed Ibrahim Magu says the cases compromised under the watch of the former acting chairman of the Economic and Financial Crimes Commission (EFCC) were calculated to the tune of N333 billion, $2 billion and £13 million.

In the final report submitted to President Muhammadu Buhari in November 2020, the judicial panel said the running and management of the anti-graft commission during Magu’s tenure was charaterised by impunity and arbitrariness,TheCable can report..

Usman Zakari, an operative of the commission, was said to have bungled 23 cases worth N45 billion, while the commision was accused of violating procurement processes.

The panel headed by Ayo Salami, former president of the court of appeal, was set up to probe the EFCC from May 2015 to May 2020 when Magu was in charge of the agency.

TheCable understands that the report has now been submitted to the office of the secretary to the government of the federation.

A panel to produce the white paper will soon be set up, presidency sources informed TheCable.

When TheCable contacted Wahab Shittu, Magu’s lawyer, to react to the report, he declined to comment, saying he wouldn’t speak on a document he has not seen.

“The EFCC awarded the contract for the new headquarters consultancy services at the rate of N451,318,501 instead of the N399,243,290 approved by the BPP. The commission observes that the EFCC formed the habit of not engaging the use of the default procurement method (open competitive bidding). The EFCC in some cases, extend/renew contracts without obtaining approvals from the relevant/appropriate authorities,” the panel said.

“The submissions made by the EFCC on the status of investigation conducted by the zonal offices exposed some operatives who are notoriosly engaged in brazen compromise of cases. The affected cases were either closed or Kept-in-View (KIV) by the dubious operatives.

“The compromised cases in naira denomination involved the sum of N333,535,364,077. The compromised cases in US dollar denomination are valued at $2,521,011,976. The compromised cases calculated in British pounds denomination are valued at £13,143,570. One of the operatives identified as Usman Zakari dubiously kept-in-view 23 different cases, with offences ranging from money laundering, diversion of funds, obtaining under false pretense, all involving a total sum of N45,262,005,908.”

In the final report, the panel further said some of the EFCC zonal offices are lacking in basic working equipment and vehicles, and that the commission’s working system is archaic. Another economic parasite not particularly affiliated to the current administration but is a frequent feature of most governments since 1999 but has gained notoriety with the President Muhammadu Buhari’s administration is what Professor Ngozi Okonjo Iweala identified in one of her scholarly books on contemporary Nigeria as judgment Debt.

Professor Okonjo Iweala stated thus: “Another scam that burdened the budget and was perpetuated by vested interests deeply lodged in the civil service was something popularly known as judgment debt. It typically arises when a government ministry, department, or agency defaults on a contract and is sued by the contractor or service provider, who often wins the case and receives the original disputed amount owed by government plus interest and a fine.

During my first term as Finance Minister (2003 – 2006), the judgment debt for ministries, departments, and agencies did not exceed about N8 billion ($62.5 million, at the prevailing exchange rate) at any given time. I was therefore surprised to learn at the beginning of 2012 that the accumulated bill for judgment debt totaled N80 billion ($500 million). It was mind boggling and somewhat implausible that agencies had become this reckless in their contract defaults. Something must be going on!

The National Assembly also seemed to believe something was amiss because it repeatedly rejected appropriating within the budget process the large sums needed to deal with this debt. In the 2011-2012 budget, only N10 billion to N12 billion was approved for repayment of judgment debt. This was administered by a committee consisting of the Attorney General’s office and the Finance Ministry. Although this committee handed genuine cases, no one could trace or document how most of that debt was incurred.

But there were plenty of stories involving dozens of people. Some had to do with connivance between contractors, ministry officials, and the courts in an unholy alliance where amounts owed by government, interests, and penalties were inflated and all parties shared in the proceeds after payment. Others had to do with genuine court proceedings that were defended less than vigorously by government lawyers, thereby leading to loss of the case, heavy fines, and again the sharing of the proceeds among the involved parties. Another set of stories had to do with arbitration and out-of-court settlements that were unfavorable for the government.

Such malpractices culminated in the large sums owed and the attendant fiscal burden on the budget. I went to the President with the stories I had heard and my suspicions. I suggested that we discuss the problem in a cabinet meeting, followed by a letter to each ministry, department, and agency underscoring that we would not honor the judgment debt outstanding and thenceforth that any judgment debt incurred would have to be paid by the responsible MDA through its budget. There would no longer be a line item in the federal budget for judgment debt.

The President concurred and gave his strong support to this proposal. Letters were written to the ministries, departments, and agencies, and we waited for protests from those involved in genuine cases. There were some complaints and between 2012 and 2014, judgment debts amounting to N11.6 billion were verified and certified for payment. The balance of N68.4 billion (about $425 million) that would have gone out of the Treasury was thus saved by the Finance Ministry.

This new approach to judgment debt was not welcome in several quarters. The Finance Minister and her team had blocked yet another avenue for fraudulent self-enrichment at the expense of the state.”

Ngozi Okonjo Iweala has indeed identified the economic parasites in the government of Nigeria. Nigerians need to read that quality book on FIGHTING CORRUPTION IS TOUGH of a book by Ngozi Okonjo Iweala who is today the head of World’s Trade Organisation.

What all the above says is that oversight institutions are weak because it would seem that there is a conspiracy of the political class to continue to act as parasites inside government. Nigeria needs to eradicate these parasites by naming and shaming them and by using the instrumentality of the law to sanction offenders and retrieve the loots back to the National treasury. This peculiar war against economic saboteurs and parasites is what the electorate should demand to know from candidates to the office of President how each of them intends to tackle this hydraheaded monster of corruption. Another strategy to eradicate economic parasites in Nigeria is to downsize government at all levels and reduce the costs of governance.


Emmanuel Onwubiko: Nigeria tormented by economic parasites

Source: https://dailypost.ng

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