Perhaps, for Nigerians, it is time to look in the mirror and ask some deep, soul-searching questions. Perhaps, if we asked the right questions, we might be closer to getting the right answers.
Happily, President Bola Ahmed Tinubu, the nation’s number one citizen, seems to have asked himself the right questions and he has arrived at the right answers. Thus, he said, and he is very right, Nigeria will not sustain the current economic system that favours the utilisation of 90% of its scarce revenue to service external debts while the country continues to grapple with the many challenges of development.
“Can we continue to service external debts with 90% of our revenue? It is a path to destruction. It is not sustainable,” the President said. “We must make the very difficult changes that are necessary for our country to get up from slumber and be respected among the great nations of the world.”
The President spoke in Abuja while declaring open the Annual Conference of the Nigerian Bar Association (NBA) which was held at the Velodrome, Chief MKO Abiola Stadium in Abuja. The conference had the theme: “Getting it Right: Charting the Course for Nigeria’s Nation-Building.”
Energising the gathering of about 16,190 lawyers in attendance with an extemporaneous speech, Tinubu said that the kind of prosperity Nigerians need can only occur if poverty is banished from society.
To obliterate poverty, Tinubu suggested robust cooperation between the public and private sectors. Thankfully, many of the nation’s private sector leaders were present at the venue of the conference where the President spoke.
Tellingly, Tinubu said that Nigeria, because of its past crippling decisions, has now been forced to take some very hard decisions that are bound to be painful and could negatively affect the socio-economic conditions of the people to put the country on the right trajectory of development.
Interestingly, the President said that the anticipated but necessary economic policies’ accompanying pains will be short-lived while the gains that will emanate from the policies his administration has introduced will last forever and Nigeria will be placed on a true path to development.
“We cannot have the country we desire without the reforms we have initiated,” he said. “It is painful at the beginning, in the short and medium term, but we must do what we have to do to take this nation to its great destiny. It is not about you and it is not about me. It is about our generations yet unborn, for whom we must bequeath a great and prosperous country.”
Yet, for Nigeria to meet its human development targets of dramatically increased access to education, electricity, food and so on for a majority of its citizens, there must be a radical shift, the type of which Tinubu seems to be suggesting, in the governance structure of the country.
Unlike in the past, the Tinubu-led administration should make concrete plans to attain some clear development goals within an identified period. Ideally, this administration needs to change the structure of the polity to enable every government institution to align with its pursuit of its identified goals.
In the end, this administration, unlike the others before it, should avoid making undue complaints and face the task of developing the nation. Happily, the President has understood this and said: “We complain a lot of the past. Is that the solution? No! Let us look forward and be determined! God has given us what we need. We must work hard with determination to make our country great and it begins with you who are seated here with me.”
Why Nigeria must not borrow again
In what appears to be a right step in righting the wrongs of the past, the federal government said it has no intention to borrow money from either local or foreign creditors, despite the recent removal of fuel subsidies and the harmonisation of the currencies exchange rate.
This piece of good news was given by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun.
According to Edun, Nigeria will plough back savings from subsidy removal into various sectors of the economy to boost government revenue and improve the business environment for local and foreign investments.
Of course, it is needless to say that, before now, how the federal and state governments have been borrowing from foreign institutions shocked many Nigerians when, in fact, as Mr. Wale Edun has pointed out, the government can raise money from within to execute projects.
“The federal government is not in a position to borrow at this time,” Edun said, adding that the emphasis is on creating a stable environment to attract both local and foreign investments.
With debt servicing exceeding revenue, the country has gone overboard, threatening its ability to pay back. The country, sadly, is also rapidly depleting rainy day funds like the Excess Crude Account (ECA), which has declined from over $2 billion in 2015 to less than $400,000 today.
Yet, even more painful, the rate at which the naira was fast losing its value against foreign currencies, the money Nigeria has borrowed will quadruple tomorrow and this will put our coming generations in financial bondage.
However, while it is commendable that the Tinubu-led administration has vowed not to borrow, it should be hoped that the three tiers of government can be prudent in the management of their scarce resources.
It should be expected too that government officials will shun undue foreign travels because of the financial implications on Nigerian taxpayers.
Essentially, the Tinubu-led government must achieve the economic growth that is expected of it. It should ensure policies’ transparency and predictability, which will be critical to reduce investment risk and promote growth outside the extractive industry.
The government should also invest in infrastructure, improve education outcomes, liberalise the trade regime and enhance trade and transport facilitation to help develop value chains and facilitate the efficient reallocation of factors of production to make Nigeria more cost-competitive
In the same vein, the administration should reduce regulatory discretion to help attract foreign and domestic investment to the non-oil sector, encourage competition and promote formalisation of activities in Nigeria.
Of course, this administration should improve access to finance, which could enable new firms to compete with incumbents and allow more productive firms to scale up their operations.
