Okonjo-Iweala: ‘Reforming the unreformable’ (3)

During the last two weeks, this column reviewed Mrs. Ngozi Okonjo-Iweala’s book, aptly titled, ‘’Reforming the Unreformable’’, with the goal of putting it in its true perspective. Beyond her usual self-praise and talking down on Nigeria and Nigerians, there was nothing really concrete as a take home for those desirous of gaining knowledge from books.

With this final part focusing on examining what is really on the ground, it is pertinent to agree with me that rather than coming “home” to fix the economy and fight corruption head-on, Mrs. Okonjo-Iweala, has since her so-called home return, so mismanaged the economy to the extent that it’s now in an irrecoverable state of coma.

About corruption fighting, just see who populates her so-called economic management team and the question that would come to mind should be, Are these barons different from what earned John D. Rockefeller in the late 19th century the appellation as America’s ‘’oil emperor whose occupier-style of business is bolted and barred, hedged round, covered over, shielded before and behind in fully secrecy’’?

That after two years Okonjo-Iweala has yet to show us her comprehensive road map for revamping the national economy — starting with an industrialisation master plan; an infrastructure modernisation and expansion master plan; as well as her new tax overhauling road map and her job creation master plan, only confirms that hers is all about empty noise.

If it is not all about noise, how come she has yet to show us her ambitious revenue generation master plan, including full-scale aggressive sealing off of all the leakages in the country’s revenues, since modern economies are dependent more on internally generated revenues than natural resource-based allocations without multiplier and trickle-down effects?

There is no better time the saying that you can’t offer what you don’t have is prevalent than how Mrs. Okonjo-Iweala has demonstrated the competence and commonsense needed to put our economic on the path of sustainable growth with as high as three million industrial jobs, two million construction and urban renewal jobs, and 1.5 million agriculture and food process jobs.

If the finance minister can’t see the urgent need for our lawmakers to amend the 2007 Fiscal Responsibility Act by deleting Sections 22 (1) and (2) which allow revenue generating agencies of government to divert public revenue they generate each in their trillions enough to meet the government’s bloated recurrent spending, then, certainly, it is worrisome the kind of finance minister she is! What is the compliance lag in federal treasury that is mandated by Section 23 (1) of FRA?

Shouldn’t a more patriotic and well-meaning coordinating minister of the economy be spending a lot of time with the Central Bank of Nigeria to ensure that the monetary policy of the apex bank is a pro-investment, pro-real sector, pro-growth, and pro-jobs one? Or, must our monetary policy be expansionary and growth real sector without devaluing the naira, without pushing policy rates as low as favourable to the country’s real sector expectations?

Why the opposition against devaluing the naira when the US Federal Reserve Chairman continues to devalue the dollar every month since 2010 using the so-called quantitative easing to inject printed dollars into the system, buying bonds and using forward guidance to keep public expectation high as why future inflation will not be halted?

If as a Washington neoliberal, she is not comfortable with exiting the World Trade Organisation, why not impose high tariff walls enough to cancel the advantage foreign dumpers have over local manufacturers who have to contend with high cost of doing business caused by infrastructure deficit and high interest rate regime? What about the over N600bn waivers rampantly being granted to political cronies under her watch? Isn’t that distorting the level-playing field in a way to undermine the very competitive environment which grows real sector economy? Why is this happening under her very eyes while she seems to be looking the other way?

If rich governments around the world in their efforts to save their economies from shylock lenders insist on external borrowing at most competitive international debt instruments as the London Interbank Offer Rates or the US Treasury Bonds rates could offer, why should a poor country like Nigeria prefer borrowing at cut-throat rates? In other words, why is Okonjo-Iweala pursuing domestic borrowing rather than borrowing from external sources which are cheaper to the extent of reducing from our current 17 per cent cut-throat interest rates to as low as three per cent, which would have amounted to saving government and the country hundreds of billions of naira she is giving away to local banks who now do nothing else than just lend to government and by so doing declare year-in-year-out over 100 per cent profit in such a stagnant economy?

Why is she celebrating the so-called single-digit growth figures when a good finance minister managing a virgin economy like ours should be celebrating GDP growth at above 20 per cent annually? In the presence of our country’s huge infrastructure deficit, it is unbelievable that our debt to GDP, at about 19 per cent, remains one of the lowest in the world, comparing it to America’s 105 per cent, Brazil’s 65.49 per cent, India’s 67.60 per cent, and South Africa’s 40.9 per cent — nations already with world-class infrastructure and industrial economies.

Also, how could, in the same presence of weak infrastructure, our deficit spending is being dragged close to zero in 2013 (2.17 per cent) when we should have been pushing it to as high as 10 per cent, after all that is the rate the IMF always recommends for the OECD countries, countries with the urgency to address infrastructure deficit like ours? Shouldn’t a proactive and growth-minded finance minister be persuading our lawmakers to amend Section 12 (1) of FRA, so as to move the current 3.0 per cent imposed ceiling to as high as 10 per cent?

Shouldn’t as part of the minister’s efforts to reduce the country’s export of scarce foreign exchange in the name of foreign education and health tourism, ensure the establishment of one academic city and one health and hospital village in each of the six geopolitical zones as a way of persuading leading foreign universities and hospital chains to establish their campuses in Nigeria?

The question, therefore, is: Why is it that Okonjo-Iweala has never done any of these things, particularly to have come up with a comprehensive master plan for the country’s full-scale industrialisation and economic diversification? Why is it that so far she has yet to reduce the country’s bloated government?

Above all, is she not doing something about our WTO membership which has continued to put to a hold our quest to become an industrial economy and lift our millions of million out of dehumanising poverty? Or, is she saying that rather than continue to bankrupt the country’s real sector businesses, which have to fight to compete against foreign counterparts who not only enjoy superior infrastructure but also close to zero interest rates?

Why is our supposed anticorruption czar, handing lucrative contracts to American companies with all disregard to local content policy? Or, what is the explanation for awarding American companies like MasterCard a multimillion dollar National Identity Smart Cards, when there are indigenous ICT companies that not only have what it takes but would have done it cheaper and create local jobs at the same time?

What about using the information to invade the privacy of Nigerians, which Edward Snowden recently revealed that the US National Security Agency has been invading their privacy by people around the world using collected data on them? Shouldn’t Okonjo-Iweala be indirectly helping the US MasterCard company’s hologram state-of-the-art biometric and biosensor plastic card containing radio frequency transmission to build electronic fences around Nigerians holding its cards?

What about the incredible purchase of Chevrolet cars for SURE-P taxis, when we all know that not only are American cars very expensive to maintain compared with Asian and European cars, but also are also not fuel efficient and not durable, as well as lack local servicing parts? Is this not the cost of importing an American economic hit woman into our economy?

While she can be telling whoever cares to listen how far the Nigerian economy is growing, thanks to the high figures Fitch, S&P, and Moody’s rating agencies have been giving to the economy, the question she has to answer remains, is it not the same rating agencies that are being sued in New York (case # 652410/2013) by two Bear Stearns hedge funds for fraudulently assigning inflated ratings to securities in the run-up to the 2008 financial crisis?

Is not an aberration that ours is a cruising economy while it is recently ranked 120th out 148 countries by the World Economic Forum in its latest report on global competitiveness? What about the revelation last Tuesday (November 12, 2013) by the World Bank Country Director for Nigeria, Marie-Francoise Marie-Nelly, that over 100 million Nigerians today live in absolute destitution, representing an unheard-of 8.33 per cent of the world’s total number of people living in destitution?

If for any reason the economy is really growing, isn’t it the justification for the country’s $37bn debt in August 2011 to have dangerously climbed to $53.42bn in June 2013, with 88 per cent of the debt stock owed to local banks at cutthroat rates?

Taking a look at the macroeconomic fundamentals, is it not worrisome how far the IMF owned our macroeconomic policies? Since macroeconomic stability means deficit-free fiscal policy and artificially-suppressed inflation, should maintaining macroeconomic stability at all costs in such a huge infrastructure deficit, not mean running an anti-real sector, anti-growth, and anti-jobs macroeconomic policies? Shouldn’t reducing inflation at all costs and keeping fiscal deficit low in the name of macroeconomic stability mean keeping our economy permanently import-dependent as local industries are continuously priced out of business because their products are more expensive that imported ones?

Having been co-opted by Okonjo-Iweala, the CBN governor, Lamido Sanusi, has now become more neoliberal than the finance minister herself. That is why without any sense of remorse, he recently proudly announced that spending $18.7bn of our scarce foreign exchange reserves between April and November 4, just in defending the naira, that it’s a good policy because ‘’…people want to pay fees and investors want to know if they will have returns on investments. We will use the reserves; we will use interest rates (to achieve that)”.

Of course, were Sanusi the Fed Chairman, he knows that by now he should be sweating as he is grilled by a proactive National Assembly so that he could explain how that is good for the economy when it’s all about exporting the country’s scarce forex. But he said what he said because he knows full well that unlike the Federal Reserve that is never independent, the flawed CBN Act 2007 guaranteed him to get away with his directionless monetary policy and the mismanagement of the country’s forex accounts.

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