“Nigeria heading for recession in Q4 2020 – FG.”
PUNCH, July 11, 2020, p 28.
“If we permit ourselves to be ill-served ..by corrupt, incompetent and inefficient men [and women], then on our own heads must the blame rest.”
US President Theodore Roosevelt, 1858-1919.
My courses on American government during my undergraduate years had taught me that we must be to pay attention to the quality of the people appointed to the highest offices of government. I learnt another lesson when being trained in computer programming at POLAROID CORPORATION in Cambridge, Massachusetts, USA. It said Garbage In Garbage Out, GIGO. I have observed appointees to high offices by the FG since General Gowon’s administration till now and invariably, those who packed quality individuals into their government – Gowon, Murtala Mohammed, Babangida and Obasanjo (1999-2007) – left legacies and institutions which still shape our lives today. The others proved that GIGO permeates all human activities. They moved the country forward in many ways that can be easily proved.
Those who stacked the deck with poor quality individuals end up leaving a lot of garbage behind instead of admirable legacies. Murtala ruled for less than one year. Yet, he left footprints more durable and worthy of emulation than we have experienced in the last five years; or, what we can hope for in the next three years. Right now, we simply don’t have the Ministers, Departments and Agency, MDAs, Heads who will deliver the returns on our investments. Instead, what we are getting amounts to diminishing returns.
I recently drew attention to the decline in productivity of the Economic and Financial Crimes Commission, EFCC without knowing that it was already under investigation ordered by the President. Right now, all we have are allegations. But, even if only ten per cent of the accusations prove to be correct, Nigeria would have lost hundreds of billions directly and even more as collateral damage. Once again, the EFCC has proved my instincts correct.
In fact, the Magu-gate provides the introduction to this week’s column and it underlies why nobody whose business interests will be strongly affected by the macro-economic trends should take this government seriously. Investment decisions for those not embarking on corporate suicide must be based on the most accurate predictions – irrespective of the source – instead of the usually over-optimistic projections of the FG. Reports published last week have once again revealed how dangerous it is to rely on what the FG says about the economy. Most often their forecasts are not only wrong, they are deliberately deceptive. Otherwise, how can my personal econometric model used to forecast short term trends prove consistently more accurate than the FG’s?
The Federal Government of Nigeria, FGN, finally caved in last week, after months of self-deceit, ably supported by the rubber stamp National Assembly, NASS. They announced stale news as breaking news. The reporter was Minister of Finance, Budget and National Planning, Zainab Ahmed, who has no demonstrated competence in Economics, Finance, Budget or Planning at high levels, but was nonetheless placed in charge of all those vital aspects of our lives.
According to the reports “findings showed that the country’s Gross Domestic Product, GDP, for the second and third quarters of 2020 were projected to be negative.” That was bad enough. It was also revealed that “the country’s real GDP had been projected by the National Bureau of Statistics, NBS, to contract by 4.2 per cent….as against the previous projected growth of 2.9 per cent.” That is worse; because the negative variance is 7.1 per cent – as at now if we were to believe the FG. But, we cannot, and should not believe the Buhari administration for the following reasons.
First, they have never achieved any forecasts they have made in the past five years and there in no reason to think that they will be more accurate this time around. What followed was taken from the 2020 Budget submitted by Buhari and passed by the NASS. Read and shed tears for Nigeria that we have allowed ourselves to be governed by incompetent, corrupt and inefficient individuals. “Budget of Continuity was based on a benchmark oil price of $60 per barrel, oil production of 2.3mbpd…government projected a deficit of N1.91tn…The revenue performance is only 58 per cent of the 2019 budget’s target due to the underperformance of both oil and non-oil revenue sources…Specifically oil revenues were below target by 49 per cent as at June 2019.”
President Buhari, Budget 2020 presentation to the NASS, October 8, 2019.
Buhari started by admitting that his government failed woefully to execute the 2019 budget mainly because the FG was wrong on three major variables which determine the outcome of all budgets in Nigeria – the benchmark oil price, the production per day and the aggregate revenue. It is unlikely that the Chief Executive Officer, CEO, of any company quoted on the Nigerian Stock Exchange, NSE, would report to his board of directors that “revenue performance is only 58 per cent” of the budget and still keep his job. Apparently, Nigerians set a higher standard of performance for the MD of Oando, whose failures affect only a few thousand people directly, than we do for our President.
In the same article titled BUDGET OF DECEIT AND SELF-DELUSION, we discover that the FG went ahead and repeated the same mistakes when preparing the 2020 Budget. The most important parameters were once again based on deceit and self-delusion. Benchmark, daily oil production and aggregate revenue were again over-stated. That prompted the remark below.
“What has the government done to correct the recurrent error in the 2020 budget? Something worse happened as a matter of fact. On October 1, President Buhari announced to the world that he had ordered released N600bn for capital projects for 2019 in the next three months. That sum represents only 22 per cent of the capital budget for the entire year. It also means that 78 per cent of capital appropriation for this year will not be forthcoming. That was bad enough. What made the announcement worse was the fact that the Nigerian President had pronounced a major tragedy as if it was an outstanding triumph. Only in Africa in general and Nigeria in particular can a President make such a statement and remain unruffled. Buhari needs not worry. He rules the most docile and the largest bunch of suckers in the world – including the NASS.
The 2020 Budget is worse in all respects than the 2019 budget which is already a disaster. One must wonder what Buhari and his advisers are thinking of and what the leaders of the NASS are doing. All the evidence required for this budget to be tossed into the garbage can is there. Granted, the Buhari administration is one in which the right hand does not often know what the left is doing. But, can that excuse the absurdities we are witnessing?”
To be continued….
Follow us on our social media platform Instagram:@delesobowalefranklyspeaking, Twitter:@DrDeleSobowale.#FIGHT COVID-19*WEAR MASKS*KEEP DISTANCE*STAY SAFE