High Inflation As Product Of Past Choices, By Nasiru Suwaid
In all my adult life, when I began to acquire knowledge and education, there is one English expression which I find highly discriminatory, to a field of study which had helped us to understand; wealth creation, employment and general pecuniary upliftment, the expression being; to be economical with the truth. Unfortunately for me, it is only last week at the Platform’s economics summit in Abuja, where I was able to comprehend why it had to be ‘economics’, which tempers with the truth, when Dr. Obiageli Oby Ezekwesili glowingly admonished, the person and government of President Muhammadu Buhari (PMB), to embrace the discipline of the market forces and discipline of the principles of the market environment, as the only model that works in modern economic governance.
A proper advice need I say, but if you tune to the nearest satellite television channel and got lucky to witness the United States of America election programming, my bet is you would have seen how a Democratic Party candidate in the person of Senator Bernie Sanders, whose ideas had became so popular, because he has proclaimed the Wall Street as an ill-disciplined sector of the economy, that must be reformed with more regulation, to guard the entrepreneurial spirit as well as the requisite social responsibility in the American business system.
It is worth noting, as of today, his fame has reached the zenith of a proportion, that his sworn political enemy and opponent in former Foreign Secretary Hillary Clinton, had to also announce the introduction of more legislations and enacted regulations to check the undisciplined American financial markets, were she to be elected into the Oval office.
In fact, the leading candidate and presumptive GOP nominee of the Republican Party, Mr. Donald Trump, has been issuing threats of further government regulations and need I say, interference into the private sector governance in the manufacturing industries, to claw back American jobs that have been lost to China and Mexico, in the event he became the president of the country.
Indeed, for the outgoing President Barack Obama of the United States of America (USA), who came into power during the time of economic recession in the year 2008 and was generally acknowledged, by all and sundry, for helping to revive the America economy into positive growth, the only charge against him for breaking a promise, was his inability to fulfill the electoral vow he made to introduce more market regulatory reforms to tame the excesses of the financial markets, be they commodity, bond, stock or currency exchanges.
In other words, it is just not a mark of a responsible and credible leadership, to assume a market run for pure profit motive and operated by atypical human beings, whose intrinsic character is usually motivated by selfish personal gains, could have any discipline, without effective government regulations and the law making guidance of the legislature. As such, it just seems no politician is willing to trust the discipline of the market forces in that bastion of free market economics, because, when economic crisis occurs or the traders conspire to create one because of pure greed, it is the vast majority of the poor citizenry that gets hurt, mostly through market meltdown, job losses, government bailouts, wrong valuation of the national currency and the loss of revenue for the government.
Perhaps, it is within that context of personal economics of interest being a deceit, I was not surprised, when a few months back, as the inflationary trend started to go higher, a friend of mine told me of an encounter he had with a sugar cane seller, whom he queried for raising the price of his product and even daring to connect it with the rise in price of the American dollar, the illiterate sugar cane seller responded that although, the article he sells is not imported but the tray he carries his products is from overseas.
It is within this premise of being economical with the truth. Recently, you would hear many an economic analyst, attributing the rise in Consumer Price Index (CPI) to the inactions of the present government, for refusing to devalue the naira, as an all encompassing panacea to the ailment bedeviling the Nigerian economy. However, the real truth is that what is happening today, inflationary wise, it is because of the bad choices we have made in past as a nation, refusing to refine our own crude oil, rather than importing it, because of the false safety of high oil earnings, despite the fact, availability and cost of fuel is a major cost factor in the pricing of goods and services in the Nigerian economy.
The privatization of the power sector, was done in such a way and haphazard manner that it is as confusing as it is motivated by pecuniary gains of corruption, in that model, generating companies seemed ill-motivated to generate, distribution companies looked incompetent to distribute, while the transmission company remained in the hands of the same individuals that ran National Electrical Power Authority (NEPA) aground. Yet, electricity remains the most significant cost factor of production for every Small and Medium Enterprise (SME), thus, determines how they arrive at the cost of what they produce.
And this other thing:
BUT OBASANJO NEVER TRUSTED OBY WITH THE ECONOMY
Last week at the Platform Abuja, an interactive economic summit sponsored by the inter-denominational Christian Covenant Centre, Dr. Obiageli Oby Ezekwesili, a former World Bank vice president, launched a blistering but unprovoked attack on the economic policies of the President Muhammadu Buhari (PMB) administration, dismissing it as a command and control economics of the past, which had failed Nigeria before and presently, it is the reason for the current economic challenges bedeviling the polity.
However, if I am to do an honest and dispassionate analysis of the inappropriate criticism, it is important to examine the past tenure of Oby as an economic manager or even as an economic policy initiator, more so, as she claimed and took credit for the economic innovations of the last sixteen years. Dr. Ezekwesili joined the Olusegun Obasanjo administration from the Budget Monitoring and Price Intelligence Unit, an office popularly known as the ‘due process office’, yet, by the end of the first tenure of the administration in 2003, the House of Representatives under Speaker Ghali Umar Na’abba, was threatening President Olusegun Obasanjo with an impeachment, principally, for non budget implementation.
In fact, this conundrum was exacerbated into most of the early part of the second tenure of the Obasanjo administration, when the Minister of Finance, Dr. Ngozi Okonjo-Iweala was embarrassingly forced into admitting, that the government’s budget implementation and performance was below average or less than forty percent, year in year out. Meanwhile, the Federal Ministry of Works and Housing under Chief Anthony Anenih was being accused of having awarded road contracts, worth hundreds of billions of naira without due process.
Perhaps, it is for this reason or it could be due to explanations unrelated to performance, but in the middle of the year 2005, Obasanjo sent out Oby from the unit into the Federal Ministry of Solid Minerals and in exactly a year later, she was up to the education ministry.
It is most noteworthy that, although she was credited with the setting up of Nigerian Extractive Industry Transparency Initiative (NEITI) in the country, the core mandate of any solid minerals minister anywhere in the world, economically, it is about turning the sector into a viable and commercial avenue for national revenue and on that, she spectacularly failed. The question here is, if President Olusegun Obasanjo who brought Oby into governance, never trusted her with the economy, why should President Muhammadu Buhari (PMB) ever listen to her on the economy.
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