BY LEKAN SOTE
Somebody has said that Zainab Ahmed, Minister of the federal ministry with the longish title of Finance, Budget and National Planning, concentrates only on the budgeting aspect of her schedule, and hardly pays attention to the Finance or fiscal policy and Planning or macroeconomic aspects.
Having, more or less, farmed out or outsourced the macroeconomics schedules to Godwin Emefiele, Governor of Central Bank of Nigeria, she caused that one to lose grip and focus of his statutory monetarist policy responsibilities.
The spike in the prices of all sources of energy –cooking and industrial gas, petrol, diesel and electricity –whose production fell by 903 megawatts on Monday, April 18, 2022 have, in turn, raised Nigeria’s inflation rate from 15.70 per cent in February, to 15.92 per cent by the end of March 2022, and Emefiele’s CBN doesn’t seem to have an answer to that.
Some mischievous haters of the ruling All Progressives Congress have started to use the rising cost of All Progressives Congress form for presidential candidates as a barometer for measuring inflation that is devastating Nigeria.
In 2015, the APC presidential form went for N27.5 million, which Presidential aspirant, Muhammadu Buhari, claimed to have obtained a bank loan to obtain. In 2019, President Buhari, who was seeking reelection, did not complain when paying the higher N45 million presidential form fees.
As the presidential fee rose to N100 million in 2022, the cynical analysts aver that as the inflation rate of APC’s 2019 presidential form moved by 64 per cent, above the 2015 presidential ticket, and by more than 122 per cent in 2022, so does Nigeria’s inflation.
Well, it may not be exactly so, as the claim is obviously grossly exaggerated. But it does give a pointer toward the rate and direction that inflation rate is going. No doubt it will soon shoot out of the roof especially if Nigeria’s import bill is not curbed.
The World Bank attributes the rising inflation in Nigeria to fiscal policy import restrictions and monetarist policy foreign exchange management regime. It adds that “Rising food prices are the underlying factor behind the surge of headline inflation in Nigeria.”
“Also, under largely lackadaisical Minister Zainab’s watch, Nigeria experienced its second recession in the life of this government that is seemingly clueless when it comes to devising macroeconomic policies. One should, however, clarify that the first recession occurred during the tenure of both Kemi Adeosun as Minister of Finance and Senator Udoma Udo-Udoma as Minister of Budget and National Planning
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But in its usual mode of looking out only for the interest of the West, its paymasters, the World Bank notes that “Food prices have increased due to import restrictions and an inflexible (foreign) exchange rate management.”
As the weight of a weak foreign exchange is nearly killing Nigerians, the World Bank says, “The current regime is keeping the official exchange rate of the Naira artificially strong, while the Naira has weakened significantly in the parallel market. Additionally, the central bank has restricted importers’ access to foreign currency for 45 products and has reduced the supply to other importers.”
By the way, the World Bank never offers macroeconomic policy suggestions that will bring the performance of Nigeria’s economy, or any other developing economy for that matter, up to par with those of the metropolitan economies.
You can only imagine the excitement of the World Bank, denizens of the capitals of the metropolitan economies and the multinational corporations owned by the international monopoly capital when they hear that Nigeria’s external reserves rose from $39.54 billion to $39.78 billion in just 19 days.
That is a sure guarantee that, despite its woes of insecurity, loss of petro-dollars to oil bunkerers and unimaginative macroeconomic policies of its government, Nigeria will be in a position to pay for its imports from their economies.
Anyway, back to Nigeria’s domestic policymakers: Maybe the “Draft Godwin Emefiele for President” group is causing him some distractions. One would have thought that he would have the decency to tell those sycophants to please stop their psychological harassment.
But Minister Zainab seems to have just woken up to the fiscal policy aspect of her job. Through Nigeria Customs Service, she recently imposed, or extended a tax, called National Automobile Commission levy, on imported used vehicles.
Sympathizers of the government argue that the levy is going to encourage producers of local automobiles, like Innoson Vehicles, whom the government’s unimaginative macroeconomic policies (even procurement policy) has not quite helped.
The Nigeria Customs Service gives the bald explanation that imposition of the levy is in compliance with the Economic Community of West African States External Tariffs. They make it sound as if Nigeria has no choice over the international conventions it will obey.
National Association of Government Approved Freight Forwarders and Association of Customs Clearing Agents are already seeing red, and planning a strike to protest the tax. Also, Lagos State Chapter of Association of Motor Dealers of Nigeria is thinking of a strategy to react to and reject this policy that they claim should statutorily apply only to importation of new vehicles.
Nigeria Maritime Lawyers Association, which says it won’t take the government to court over the matter, curiously advocates that this insensitive imposition of the levy should be restrained by a court order. The seeming contradiction should be clarified, please.
To be sure, the Finance responsibilities of Minister Zainab’s three Ministries are: Collection and disbursement of government revenues; preparing annual accounts of Ministries, Departments and Agencies; and managing federal debts, many of which are routine and require no special capacity besides accounting and bookkeeping skills.
The minister seems to be sleeping on the duties that have to do with the formulation of fiscal policies on taxation and tariffs. And anytime she wakes up, it’s usually to impose some hardship taxes or tariffs on poor Nigerians.
In 2019, she raised Value Added Tax from 5 to 7.5 per cent, again giving the cock-and-bull that Nigeria was trying to comply with some convention of the Economic Community of West African States.
The other day she (and CBN Governor) came up with the wicked idea that uncollected dividends and monies in dormant bank accounts of Nigerians will be appropriated by the Federal Government. That was a bad dream that can only come out of someone who had exhausted the contents of her financial policies bag.
The impression that one gets from her actions is that rather than take 100 million Nigerians out of poverty as promised by President Muhammadu Buhari, Minister Zainab seems intent on pushing already poor Nigerians further into the abyss of poverty.
And she appears to be doing that very well. In 2018, Nigeria was said to have taken over from India the dubious title of the country with the poorest number of people in the world. The World Poverty Clock said Nigeria was home to 70 million miserable poor people.
By 2021, the number was rumoured to have risen to 100 million, significant in a country whose population is a little more than 200 million. However, the World Poverty Clock is now saying that India has taken back the lead as the poverty capital of the world.
Also, under largely lackadaisical Minister Zainab’s watch, Nigeria experienced its second recession in the life of this government that is seemingly clueless when it comes to devising macroeconomic policies.
One should, however, clarify that the first recession occurred during the tenure of both Kemi Adeosun as Minister of Finance and Senator Udoma Udo-Udoma as Minister of Budget and National Planning.
Despite Minister Zainab’s macroeconomic policy failures, you wonder who came up with the Buhari Administration’s concerted, if a little slow, laudable policy of building up infrastructural projects for the country.
