Last week’s belated passage of the 2018 budget by the National Assembly is bound to spurn various reactions, mostly arising from deep contemplations, no doubt. Was it delayed by bellicose lawmakers having an axe to grind with the Presidency? Or was it put in the cooler to enable the President’s team to clear grey areas spotted in the financial plan? But getting the budget passed midway into the year for which it is meant, and coming at a time the general elections are only 10 months away, call for some circumspection.
Politicians who influence votes through money distribution should be made to face the music through proper and efficient use of undercover anti-corruption agents. This, no doubt, is hard, in view of partisan inclinations and sundry biases, but that is the way to go
Recall that recently, the Central Bank of Nigeria cautioned politicians in the country against extravagant and wasteful spending, as the elections approach. It said that the profligate culture of funding political aspirations through huge withdrawals for onward distribution to idle hands and political thugs might spike the inflation rate.
At its April Monetary Policy Committee meeting in Abuja, the CBN had urged those in authority to urgently put the 2018 budget to work, expressing the conviction that it would boost investment and economic outputs across Nigeria. The CBN, however, anticipated huge fiscal spending during the implementation of the budget, while demurring that the 2019 elections might also have inflationary effects.
The apex bank then called for a proactive and cautious monetary policy response, to ensure that there was no upward pressure on inflation. According to the CBN, the 2018 budget will boost investment, employment and economic output for the benefit of the citizenry. It is, therefore, hoped that, in its monetary policy, the apex bank will prioritise reduction in the general price level, ensure exchange rate stability, and sustain the country’s fragile economic growth.
There is no doubt that the CBN would have a lot of work to do in taming inflation rate in the country between now and next year, as a result of the elections and the implementation of the huge N8.612 trillion budget for the country.
Inflation in the country is currently hovering around 13 per cent. The CBN, it would seem, is making efforts to reduce it to about 12.4 per cent. But the ultimate task would be for the CBN to bring inflation rate to a single digit.
At the same time, there is still a disapproving gesture in the inescapable implementation of the N8.612trn 2018 financial plan. It would have been splendid if all the budget’s capital expenditure’s payments were due for indigenous contractors so that the money would stay in the economy. But no, a good chunk of it will go into paying contractors who are mostly foreigners, and who will remit the money to their foreign countries in foreign exchange.
At the moment, prices of agricultural products, especially food items, are up in the markets, because harvesting is over and farmers across the country are busy planting new crops. The harvested crops would be in the southern states’ markets by August and in the northern states’ markets, as from September. If by August, there are bumper harvests across the nation, then there is the high possibility of inflation rate coming down below the 12.4 per cent anticipated by the Federal Government.
Above all, it must be noted that the level of the country’s foreign reserves is central to its economic stability, especially because it has direct bearing on inflation and the exchange rate. If the government succeeds in building up the country’s foreign reserves, the naira will be stable. If the naira is stable, inflation will come down. If inflation drops, interest rate can fall also. In fact, experts posit that the key variable for Nigeria today, either for Gross Domestic Product growth, government’s spending, interest rate or exchange rate, is the state of the external reserves. So, efforts must be put in that direction, so that the country can achieve a very viable and stable economy.
As for the spendthrifts among the politicians, however, it is expected that the Economic and Financial Crimes Commission will be alive to its duties by arresting and prosecuting politicians who throw money around, ostensibly for ‘oiling’ election campaigns and inducing voters. If the country can genuinely continue with the current effort to reduce corruption, the nation will have a place of pride and good record in the world. Nigeria, the touted giant of Africa, will be able to compare favourably with other emerging developing countries of the world.
Politicians who influence votes through money distribution should be made to face the music through proper and efficient use of undercover anti-corruption agents. This, no doubt, is hard, in view of partisan inclinations and sundry biases, but that is the way to go and President Muhammadu Buhari, who already wears the anti-corruption toga, should see to it that culpable politicians come as scape goats. To go about this, any member of his ruling All Progressives Congress, found in such mess, should not be
spared.