Budget Stimulus As Fruit Of Deliberate Planning, By Nasiru Suwaid
The article this week, could as well be a report card, on the last financial year or rather, budgetary year of the immediate past administration or if I am to be more accurate, it is about the state of the Nigerian economy, a year after the new and succeeding democratic regime took over. Basically, it is a year of economic confusion, which structurally is highlighting the state of economic contradiction, the Nigerian economy was allowed to fall into, in terms of revenue generation not reflecting economic activity, expenditure spending not being commensurate with social requirement and infrastructure deficit, prudential practice not tallying with financial discipline and economic growth not marrying economic reality, in terms of the unemployment rate, level of income earning power and the capacity of the Nigerian economy to produce.
It is upon this premises, the present administration took over the reign of leadership and was immediately confronted with this challenges, how to build on such a very faulty foundation and indeed, could you build on such an ineffective architecture and defective structure, more so, when issues bordering and concerning economic management require immediate action, fast pace and robust approach.
The dilemma for the President Muhammadu Buhari (PMB) administration, was that not to ‘act’ so fast, would seems as a sign of unconcern or unfamiliarity with the economic system or even, a kind of ideological revolt against a crony capitalism, which no serious economic ideologue would want to subscribe to, yet any building on such a defective system, would only lead to economic stagnation, implosion, collapse or the evolution of a bankrupt state, struggling with balance of payment issues and a perfect candidate for International Monetary Fund (IMF) administration.
Generally, during the period in question, the Nigerian economy or to be more specific, the banking system was awash with excess liquidity, yet, the banks mostly exposed themselves to the diminished in price value oil industry, more so as, the high interest rates and high lending rates was a sufficient turn off to the real sector as well as long term investor and entrepreneur, seeking for funds for productive value adding ventures.
The interventionist measures and mechanism precisely set for Small and Medium Enterprises (SME), could not be accessed because of a defective financial infrastructure that tied the money as idle funds, thus announcing to the world, availability of grants that could not be bestowed as loans to the needy entrepreneur. It is within this context, the Nigerian economy was rebased, making it the largest economy in Africa and surpassing South Africa, yet, when you compare and measure the two economies, in terms of Per Capita Income (PCI), Nigeria looked way down in comparison to the Southern Africa country.
In fact, it is within this situational circumstance and because of this factual reality, which is an economy that is distorted structurally, the need for a timeline of economic inactivity arose, to create a barrier and a beginning, when the Nigerian economy is to start being operated adequately, effectively, efficiently and with a set purpose on what is to be achieved, economically, fiscally and monetary policy wise. It is within this context, one of the first actions of President Muhammadu Buhari (PMB), upon assumption into office was to appoint a performance refutable leadership for the Federal Inland Revenue Service (FIRS) and integrity proven administrator for the Nigerian Customs Services (NCS) and when the time came for ministerial appointments, the Finance Ministry was bestowed with a financially prudent leadership.
Indeed, it is from this premise the Treasury Single Account (TSA) was effectively implemented and the three trillion naira saved, only serves as an adequate take-up for an economy in need of infrastructure financing and when tallied with a historic six trillion naira expenditure budget or to be more specific, the near two trillion naira capital expenditure, it looks a perfect beginning for an economy in need of stimulus and growth.
And this two other things:
WHEN TO ‘CAPTURE’ IS NOT TO SEIZE
About a fortnight ago or if I am to be most precise, a certain Tuesday in the afternoon, the Nigerian financial press turned the momentous briefing of the Central Bank of Nigeria’s (CBN) Monetary Policy Committee (MPC) meeting, into a speculative exercise in reporting, when they repetitively asked of the governor of the apex bank, whether the regulator bank would ‘seize’, the Domiciliary Accounts or its foreign currency component from the depositors, principally, because I had asserted in my last write-up, that what is in the Domiciliary Account has been ‘captured’ into the financial system.
It is not in our banking laws and regulations, for the central bank to ‘forcibly’ take the depositors money, whether in local or foreign currencies, rather, what the apex financial regulatory organization is required, which is to make sure that the flow of money and monetary transactions is ‘captured’ within the financial system. Basically, for monetary policy management, monetary policy monitoring and monetary policy direction, just like the Nigerian Identity Management Commission (NIMC), ‘captures’ the finger prints of Nigerians, without ‘seizing’ their hands, besides, just because President Muhammadu Buhari (PMB) is an economic-nationalist, that doesn’t make him a private asset seizing communist and as Asiwaju Bola Tinubu would always want to aver; our’s is only a commonsense revolution.
AS ASIWAJU ATTAINS A MILESTONE
As Asiwaju Bola Ahmed Tinubu reaches another milestone of 64 years on earth, this is wishing the ‘new bearing’ a happy birthday and many more wonderful years of political vision, organizational foresight and attitudinal grace.
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