|Chamberlain S. Peterside, Ph.D||Thursday, October 7, 2004|
New York, NY, USA
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NIGERIA'S ECONOMIC POLICY ASSESSMENT:
44 YEARS AND COUNTING, ANY SILVER LINING IN THE HORIZON?
s Nigeria celebrates 44 years of political independence, skeptics question the essence of the hard-won freedom given the current deplorable state of affairs. Some have even opined that had the British stayed longer than they did, Nigeria would probably be better off today.
It is hard to dismiss such arguments outright; suffice to say that these assertions are a reflection of the deep-seated frustration and cynicism experienced by the citizens. Wherever you look today, traces of prolonged neglect, ineptitude and mismanagement is all glaring in Nigeria.
Essentially, this year marks the fifth anniversary of Obasanjo's second coming as a civilian president. The country has been through a rough ride during the last half decade, economic conditions have not improved remarkably for the average citizen, high unemployment, poverty, crime and corruption still remains the bane of the society. The fact is that at least political freedom now prevails, so it is simply naïve to expect drastic economic transformation within such a short time frame. Look closer and it might be safe to say that things are beginning to take shape as the country gradually nudges ahead on the path of sustainable development.
…New Kids On The Block.
As far as I am concerned, for the first time since independence, you now have a breed of knowledgeable technocrats at the helm of affairs, who understand what the world is talking about. There is no gainsaying that the so-called reform team consisting of The Finance Minister, Central Bank Governor, Budget Management office Director, Economic & Financial Crimes Commission Director, Presidential Adviser on Due Process and Minster of Federal Capital Territory with their respective lieutenants are a committed bunch, who are putting in their level best to tackle the problems.
Two weeks ago here in New York, I had the privilege of attending a breakfast meeting and listening to the Finance Minster Dr. Okonjo-Iweala in company of Dr. Oby Ezekwesili, the Presidential Advisor on due process and Dr. Mansur Muktar the Director General in charge of Debt Management Office, you get the impression that indeed they are well informed and realize the need to improve Nigeria.
The Finance Minister has been facing tremendous obstacles both within and outside the country. Recently she personally confronted a major international news magazine on some false notion they published regarding Nigeria's lack luster economic performance and corrupt practices. The editor later acknowledged their mistake and apologized. You cannot take on a respected western news magazine without having your act together.
In one of her recent pronouncements, the minister criticized the "obnoxious rules and regulations of the Paris Club" of creditors, whereby a debtor country is not allowed to totally amortize even the "smaller debts," not withstanding that it possesses the financial resources to do so. Such debt must rather be rescheduled, which actually exacerbates the debt burden of poor highly indebted countries (HIPC). Nigeria for instance recently rescheduled for 18 years a mere $3.1 million owed to Finland, rather than pay it off, because the Paris Club protocol says so. I am wondering if Nigeria's finance ministry officials knew this conditionality before embarking on a borrowing binge during the 1970s and 1980s. Meanwhile, Time Magazine in its latest edition titled "History of Heroes," has named Okonjo-Iweala among 29 extraordinary men and women in the world "who aren't satisfied with merely living in the world, but are compelled to change it."
A comprehensive economic agenda dubbed National Economic Empowerment and Development Strategy (NEEDS) was put in place last year. Recent economic indicators show that inflation is now falling or growing at a modest pace, averaging 14 percent last year. Official target calls for reducing inflation to single digit by next year. Naira exchange rate has remained relatively stable hovering around 135 to a dollar since the re-introduction of the Dutch Auction System (DAS). By simply clicking on the ministry of finance web site, you can examine figures of statutory allocations to government parastatals and state governments, which is unheard-off in the annals of Nigeria.
Much to the consternation of some state governments and politicians the oil windfall of nearly $3 billion, from recent price hike is still intact, just as Nigeria's foreign reserves have now surpassed $12 billion. Sweeping financial crimes bill passed last year would possibly lead to de-listing Nigeria as a Non-Cooperative Country and Territory (NCCT) by the international Financial Action Task Force (FATF) next year. Structural banking reform announced by the CBN in June would help strengthen the institutional framework of the financial system and flush out unviable banks.
Pundits would argue that all these largesse is yet to trickle down to the masses, rightly so. One must realize that sustainable economic advancement is not a "picnic"; it demands long hard work, commitment, sacrifice and savvy on the part of both the masses and policy makers. The good news this time around is that you have a qualified and committed team. So if they are allowed to work, without undue distractions and circumvention by entrenched forces, I have no doubt that the benefits would ultimately trickle down to the masses.
…Points To Ponder.
You cannot put a value to the fundamental traits technocrats; policy makers and leaders must posses, such as requisite acumen, discipline, passion, integrity, tenacity and love of country, which is necessary to pull a country out of its quagmire. It is heartening to see such people being given an opportunity for ones. That might not be the end of the story. Major political issues confronting the country today could render any well-meaning measures insignificant, unless they are ameliorated. Such issues like:
Even with the right team in place and homegrown policies currently on track, Nigeria is not out of the woods yet. My sense of economic history indicates that a silver lining might be unfolding in the horizon. How soon, how far reaching things turn out is a different story.
Chamberlain is the Founder & President of New Era Capital Corp. and MyCompleteFinance.com, a New York based financial services group. He was previously a Financial Advisor in the Global Private Client Group, of Merrill Lynch.