Nigeria’s economic growth in the hands of politicians and civil servants
A civil servant told me at a rally that he felt sorry for the ivory tower economists who pontificate over Nigeria’s economic growth and development. He explained that they know more about theories than practice and the theories are mostly for foreign countries rather than developing countries like Nigeria. A couple of mutually exclusive reports on practical economics in Nigeria over the past two weeks seemed to convince me that he was right. Contrary to my opinion that every president and the vice who incidentally oversees the Nigerian economy should be allowed to go through a special class in Principles of Economics, the tutoring given to them by civil servants might be more appropriate than the type of economy I had in mind. It should be tutorials on How to live big and well afterwards. This is pure practical economics on how to help each other national stock market for sustainability of wealth or literally The economics of embezzlement for a better life.
The first incident was the arrest of the suspended Accountant General (a civil servant) of the Federation, Ahmed Idris, for fraud of 80 billion naira! While this report was still ongoing, another report came to indict a former boss of the Niger Delta Development Commission, Nsima Ekere, (civil servant) for a 47 billion naira fraud! Then came the big news that manufacturers couldn’t get foreign currency to import inputs for production because politicians were buying dollars for primaries. What else could be more damaging than an attack on the national economy from within and without? While the Minister of Finance was making noise about the shortfall in the federation’s account and tying it in part to the effects of the tax relief that had been planned, she did not know that there had been an under-reporting of the accountant general’s office. God only knows what had happened to the revenue figures at the lower levels of the ministry before he (Ekere) reached the top level!
On the other hand, while the Governor of the Central Bank of Nigeria, Godwin Emefiele, lamented the fall in the exchange rate due to the activities of a bureau de change and the poor performance of oil sales, he did not know not (probably he knew as one of them) that the pressure on exchange rates came from politicians whose corrupt actions have taken to the next level (a lá All Progressives Congress).
Theoretically, we define money in an economy as something generally accepted as a means of payment and for the settlement of debts. This implies that the dollar is not money in Nigeria and its demand should be very low or inconsequential. Politicians dollarized the Nigerian economic space in such a way that local demand unexpectedly pushed the exchange rate over 600 naira to the dollar and disrupted domestic production to the point that the industrial sector became very sick! Let’s digress.
The official, who said that Nigerians teaching economics are only theoretical, can be 95% right when we use the Nigerian prism. One thing about economics in its framework is that it recognizes abnormal situations. There are therefore abnormal demand and supply curves to capture situations contrary to theoretical and practical norms. Most situations in Nigeria are on the other side of the fence. They are on the abnormal side.
One of Nigeria’s most respected economists included a chapter Economics of corruption in his classic book titled, Practical microeconomic analysis in the African context. He identified education as one of the main factors in his corruption demand model. He postulated that an educated person is generally productive in accordance with standard human capital theory. Being productive, he argued, would enable the person to earn enough to escape absolute poverty which might tempt them to be corrupt. Furthermore, he postulated, “the status effect of education operates through the psychological awareness of the value of one’s professional status”. Ceteris paribus, he concluded, the more the individual is educated, the more he can be aware of his status and be prevented from engaging in corruption! I know Accountant General Ahmed Idris and former NDDC boss Ekere are professional and highly educated.
Nigeria’s factors throw economic theory into the dustbin of practical irrelevance. Fortunately, economic theory also recognizes abnormality in relation to money. The desire to earn money does not obey the law of diminishing marginal utility which states that the more you own a commodity, the less you desire to have more or less the value attached to it. With money, you want more of it all the time. This is why money is considered the root of all evil, although I would argue that it is also a source of open happiness. I know the difference between my mood when I receive my salary and when I wait for the salary. Of course, there are people who do not know whether the salary is paid or not, although they are employees. Why should I have 1 billion naira or 80 billion naira and still worry about salary?
Whatever you think of the existence of the Economic and Financial Crimes Commission and the Extractive Industries Transparency Initiative of Nigeria, they are blessings for this country. NEITI is known to attack the government on deeds and wrongdoings, while the EFCC attacks individuals with financial misconduct. The activities of the EFCC over the years have resulted in high profile revelations of economic mismanagement and gross corruption by politicians, officials and civil servants. It is a very difficult task and we need strong people to handle the task. All of the former heads of the commission left office in circumstances indicative of the corruption fightback.
I suspect Magu, the former head of the EFCC, to be digging into the activities of the powerful mafia in the current government and immediate action had to be taken to suspend him. The fact that Judge Ayo Salami’s report remains hidden after six months of submission and the recent promotion of the same man suggests a hidden truth. But his predecessor left office the same way. The current boss of the EFCC should know that we appreciate their work. Reports on the Accountant General and former NDDC boss should make it clear to government technocrats like the finance minister that there has been under-reporting of income in government coffers, extras ranging in the private pockets of civil and public administrations. servants from top to bottom.
Does the minister know that Nigeria earned around $206.06 billion from oil exports alone from 2015 to 2019? Does she know that the country has made more money from gas exports than from oil exports in recent years? Reports from even local newspapers show that revenue from gas exports and commodity sales to NLNG was $243.57 million in the first quarter of this year (2022) and exceeded export revenue of oil by 259.4%. Reporting has always focused on oil rather than oil and gas.
For exports, the most accurate sources of data should come from international statistics and ministers in offices that deal with international commodities should be interested in information from these sources to cross-check under-reporting from domestic sources . Such under-declaration destabilizes budgetary plans and the execution of plans with negative consequences on the achievement of macroeconomic objectives of economic growth, employment, price stability, income distribution, equilibrium of the balance of payments and sustainable development. Perhaps the under-reporting of income is responsible for the government’s continued resistance to implementing education funding and the ongoing crisis in the sector.
The shift from using naira to dollars in corruption during political activities should not be allowed to take hold. The action must be condemned and possibly probed. The destruction of the national currency is like the destruction of the national flag of a country by those who are supposed to defend the dignity of the nation. I’m sure Americans would wonder how Nigerian politicians got to the magnitude of the minted dollars without the connivance of the country’s central bank. The adoption of foreign currency for domestic payments of any kind implies a loss of confidence in the local currency and, by extension, in the medium and long term, a loss of confidence in the economy. Given these situations, it is becoming increasingly clear that civil servants and politicians, by omission or commission, are responsible for Nigeria’s continuing economic quagmire.
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