Any discerning Nigerian should have seen the economic downturn coming. For this reason it is difficult to be impressed with Finance Minister Okonjo- Iweala’s tepid ‘austerity measures’ announced last week. The measures should have come immediately after the commencement of civil rule in 1999.
The failure of the Olusegun Obasanjo administration to find the political will to dismantle the over bloated military edifice was predictably going to lead to economic dysfunction. Now that the chickens have come home to roost, there must be a wholesale rationalisation of the cost of the machinery of government. And the sacrifices must demonstrably be seen to start from the top. This is the precedent set in 1962 when the ‘austerity measures’ announced by the government of Sir Abubakar Tafawa Balewa was preceded by pay –cuts in the emoluments of all political office holders. This sent out an unambiguous signal that the pain will be shared without exemptions.
Unfortunately, the panic measures outlined continue to emphasise a state of denial. The government must respond by making it clear that the present discomfiture is not temporary. We are in it for the long run. Having failed to diversify our earnings base when times were good we now have to do so in a painful manner. The international terms of trade have turned against us and we have to readjust in an appropriate way. It is clear that there has to be draconian cuts in the non- personnel cost of the machinery of government. All duplications, cost –inefficiencies, and unnecessary agencies have to be wound down. And to state the obvious, there has to be a real no – holds – barred war on corruption. In addition, inanities such as the Pilgrims Welfare Boards and assorted luxuries are things we can certainly do without now. The political establishment is now compelled in the interest of the nation to implement the, in itself, inadequate report of the Steve Oransaye committee. Agreed, the report does not go far enough, it has to be expanded because it provides not just a start in the right direction, but a demonstration of intent and a notification that the required political will is available.
It is true that pivotal elections loom on the horizon. Nevertheless, the establishment must face up to their historic responsibility. We are in this for the long haul and the political economy has to change. Nigeria must now develop a real market driven economy based on realising the ‘animal spirits’ in a business- friendly competitive environment with strong pro- competition and anti – trust frameworks and independent regulatory agencies. There has to also be a decisive and irreversible shift away from consumption in favour of production. In view of the defiance in capital formation the development institutions must be recapitalised in order to provide the much needed long – term capital to build the capital base. This will provide the capital needed for the vitally of projects with long – term gestation periods such as power stations, refineries, public/private infrastructure projects and so forth.
Within this framework, the continuing success of Brazil’s development finance institution BNDES provides a good example worthy of emulating. We must also develop a solid export base for agriculture. In this vein, long – term planning must replace hype. Like Brazil, Nigeria must become a major exporter of value – added agriculture produce. This will involve setting up commodity exchanges, investment in agric – science research, as well as the provision of minimum farm gate support mechanisms and crop insurance to farmers. The development of creative new forms of financing is also required as well as, changes in the Land Use Act to enable those in the sector to have access to and possession of tradable title. Furthermore, the Solid Mineral Sector development must now be put on a proper war footing. This long neglected source of diversification must now be pressed into service.
Nigeria’s political establishment has to muster the political will to face today’s changing times. The country is at a critical juncture and there has to be a critical and irreversible change for the better. For emphasis, there is no alternative. Nigeria must now understand that in the words of the British rock band, The ROLLING STONES, ‘you can’t change time, but time will change you.’