OJO: Policy flip-flop worsened economy in 2016
How would you describe the business outlook at the beginning of 2016?
At the beginning of 2016, there were a lot of promises by government to improve the business climate, especially the ‘Ease of Doing Business’. However, the sourcing of foreign exchange, the floating exchange rate, the high interest rate on loans, the lingering challenge of availability and affordability of electricity, the soaring incidences of crimes and criminality, and the slipping of Nigeria’s economy into recession, have all impacted negatively on the country’s business environment. This year, there are more businesses, which shut down than new ones created. There was a lot of divestment. This has worsened unemployment and poverty in the country.
In your assessment, what went wrong?
The policy flip-flop on the exchange rate; lack of feasible and comprehensive economic blueprint; revenue shortfall to finance the 2016 budget; inability to meet Nigeria’s OPEC oil quota and 2.2mbpd estimated for the year due to incessant vandalism of oil and gas pipelines by Niger Delta militants and lack of strong economic team, all combined to impact negatively on Nigeria’s economy in the outgoing year.
Could some of the challenges be avoided?
Indeed, some of the problems are avoidable. Economic team made up of experts and economic blueprint are non-negotiable for a country in recession. A firm implementation of sound economic policies is also desirable.
There seems to be a continuum in the nation’s budget processes. What is your take?
The 2016 budget was premised on zero-based budgeting, which is a novel budgeting process. This is yet to be perfected, as this year’s budget was plagued by the issue of ‘padding’ both by the executive and legislative arms of government. The late passage of the budget, which came into operation in May 2016, has necessitated the extension of the lifespan of the implementation by the National Assembly to one calendar year and that means it will be operational till 2017 May. Perhaps, this encouraged the presidency to again submit the budget for the 2017 late (presented to NASS on December 14 while that of 2016 was presented on December 22, 2015.) This does not augur well for the country’s economy and is one of the lingering challenges the executive ought to have avoided. The president has said that 2017 budget will be zero-based like that of 2016. In these aforementioned respects, it can be safely said that there is continuum in the nation’s budget process.
Do you see any difference in the level of fiscal governance between the past and present administration?
Well, to the extent that there is an effort to curtail waste through the establishment of the ‘Efficiency Unit’ in the federal civil service; attempt to weed out ghost workers through the IPPS (biometric verification of workers identity); enforcement of the Treasury Single Account and the attempt to sell off some of the aircraft in the Presidential Air Fleet (PAF), as well as, giving out some to the Nigerian Air Force thereby reducing cost of maintenance of the PAF; and the increase of capital expenditure in 2016 budget to 30 per cent of the national budget, one can say there is significant change in the public finance management.
What do you want the authorities to immediately address?
Restiveness in the Niger Delta region, which has led to ceaseless attacks on oil and gas facilities need to be resolved. There is the need to improve significantly electricity generation; transmission and distribution with proper metering of electricity customers, so as to finally eliminate estimated billing systems. Ease of doing business needs to be taken seriously. In this regard, a number of things need to be done. These include the need to incentivise the private sector through a good investment policy; easy process of land acquisition with all title documents including the certificate of occupancy (C of O), access to single digit loans and improvement in general security of lives and property. The government’s anti-corruption war must be fought without let or hindrance and without minding whose ox is gored. The buy ‘Made in Nigeria’ campaign must be sustained and implemented to the letter with the government at all levels contributing their quota. Leadership by example is important.
What is your outlook in 2017?
Economically 2017 will be a tougher year despite the proposed N7.3t budget of growth and recovery. Nevertheless, if the aforementioned recommendations and proposals are faithfully implemented, the country shall start to see light at the end of the dark tunnel. The political will to do the right thing by all arms of government from the legislature to the executive to the judiciary will get the country out of the economic doldrums. Nigerians must join hands with government at all levels to see to the successful implementation of the ‘Change Begins With Me’ campaign. We all must imbibe right ethical values and do the right thing.