Onyekpere: We must devise creative, innovative ways to revive economy
The Lead Director of Centre for Social Justice, Eze Onyekpere, in this interview with Assistant Editor, Finance and Economy, CHIJIOKE NELSON, said the present government has a lot to do to prove its claims of capacity, good governance and development agenda. According to Onyekpere, nothing in the horizon currently offers optimism.
What is your view of the country’s rising debt and government’s sustainability argument?
It is an unfortunate situation because we are back to the pre-2005 debt relief scenario. The current administration ramped up domestic and foreign borrowing and has not come up with any feasible funding alterative to reduce the deficit financing of the budget. We are currently paying debts with 68 per cent of our retained revenue. In essence, we are using up 68 kobo out of every 100 kobo earned by the country to service debts. And the irony is that we are still borrowing more, thereby increasing the percentage of retained revenue that will be required to service debts in the future.
The response to the foregoing is to devise alternative sources of funding capital projects that is devoid of sovereign debts. The new funding scenario should include innovation and strengthening public private partnerships, engineering special purpose vehicles to raise funds from institutional and retail investors for specific bankable projects and enhanced revenue generation drive to plug the leaks. This may include road tolls and increase in VAT and surcharges on specific goods and services.
The big challenge is that no one in government is thinking. For instance, Nigeria borrowed from the Chinese to construct the Abuja Kaduna rail line and when it became operational, the authorities are subsiding the running of the line with about N40m a month. Thus, we are not even doing cost recovery but subsidies on a rail line for which we borrowed massively. So, how do we intend to repair this debt? We are still not honest with our story telling; where are the trillions accrued under Stamp Duty deduction, which every Nigerian with a bank account suffers? No one is able to give a convincing answer.
How optimistic are you regarding the next four years, given the outcome of the last four?
There is nothing in the horizon that offers a beacon of hope or optimism, considering that the President has told Nigerians to prepare for tough times. Unless there is a dramatic change in mindset and attitude in setting and implementing policy, recruiting ministers, assistants and others who work with the President, we are on a plane to the next level of poverty and misery.
So, what would you advise the government to start from in order to minimise the misery and poverty?
It would be imperative for the government to start with a deep, honest and dispassionate internal review of its economic performance over the last four years. The campaigns have come and gone and so, such a review is needed to identify what has gone wrong and the few areas of success that can be replicated in other areas. This will involve a review of the entire Economic Reform and Growth Programme (ERGP), its targets and achievements as well budgetary appropriations, releases and implementation so far. In this review, questions will be posed about extant priorities and whether they are in tandem with the demands of the people, sectorial and business priorities, etc. This will lead to conclusions, course correction and intensification of best practices.
The second component of the review is to rejig the economic team and bring in the available Nigerian best in class. These are persons who combine capacity with integrity. This is in view of the lacklustre performance of the economy over the last four years. These best in class will be creative and innovative minds, who have track records and are suited to working for success. They are men and women who would rather give reasons on why they succeeded than continuing the blame game, which has been the hallmark of the administration.
The third is to commence the opening up of the economic and bureaucratic system. For instance, the budgeting system should be made more evidence-based, participatory, transparent and accountable to the needs of Nigerians. A more transparent and accountable process will increase faith in governance and galvanise the energy of a broad spectrum of Nigerians for national development.
There is the need to identify key laws that need to be enacted, those to be reviewed and repealed and submit executive bills to the legislature very early in the life of the administration.
Why is there much concern about the national budget even more than that of states?
The Federal Government has the bigger share of proceeds from the Federation Account when compared to the states. So, it is natural that attention will be higher on the bigger pie. However, considering that states are responsible for the day-to-day existential matters of concern to citizens, Nigerians are encouraged to meticulously engage state and local government budgets, if we are to witness improvements in the standards of living. But the challenge is that many states do not open up their budget process for public participation.
What specific budget items create further concerns in 2019?
We still have statutory transfers to the National Assembly, National Judicial Council, Universal Basic Education, Niger Delta Development Commission etc. as lump sums without details and disaggregation. This is wrong in law and contrary to many decisions of the courts to the extent that no one is permitted in a presidential constitutional democracy to spend public funds in a way and manner that is unknown to the people who are the ultimate sovereigns.
Again, we have specific ministries and agencies joining the trend of these statutory transfer beneficiaries. The Ministry of Agriculture and Rural Development simply proposes lump sums of money for various agricultural value chains without the details, or disaggregation of what the money would be spent on. For instance, merely proposing N2b for cocoa value chain says absolutely nothing of the nature of the activities, projects and programmes to be funded, neither does it state the location of any activity. Proposing N45.5b in Service Wide Votes for Sustainable Development Goals (SDGs) creates no projects, activities and deliverables, which citizens can look up to, or hold government accountable for. If you recall, this has been the practice since the return to civil rule in 1999, then the present and previous Federal Government have the challenge of showing Nigerians what they have done and delivered with these huge sums of money.
Furthermore, concentrating votes, which should have gone to various Ministries, Departments and Agencies (MDAs) of government under the Service Wide Votes makes no sense. The impression created is that of a slush fund, which makes accountability increasingly difficult as it gulps about a quarter of the budget.
How concerned are you with budget releases and implementation reports?
Budget releases have been very poor, especially for capital projects. The fact is that projected revenues usually fall short and thus available revenues have to be rationalised. Personnel expenditure, debts and statutory transfers are high on the priority and so they receive greater attention. Whatever is left is now deployed to capital expenditure. But capital expenditure is divided into administrative and developmental capital. Considering that the managers of the budget in MDAs are the ones in need of administrative capital, it seems administrative capital commands greater priority to developmental capital expenditure. Capital releases and utilisation have been very poor.
President Muhammadu Buhari has still not been signed the budget timeframe bill. How will this affect the country’s budget processes?
The National Assembly passed the bill and it got the assent of the required number of states to become law. But Mr. President simply refused to give assent to the bill without any convincing reason. It is a sad testament to the double- speak of the administration. In one instance, it states that it is interested in restoring the budget calendar and in another, it refuses to sign the bill that would have made that restoration possible. National Assembly should negotiate with the President to see the need to review his veto on the bill.
Where would you want human capital development and index in the next four years?
Let us make a case with education. There should be reforms for improvements in quantity and quality. Quantity should get more children and young persons into schools to arrest functional illiteracy and the 13.5 million out-of-school children syndrome. Quality should focus inter alia on curriculum reform, which links education to industry for acquisition of functional skills and competencies needed in the market; improvement of learning facilities such as libraries and laboratories; enhancing capacity of teachers, etc. Also, improving the transparency and accountability of the management of education funds is imperative. All these will lead to improvements in the quality of human capital that will be emerging for the task of national development.
What would be your message to government now that elections are over?
The game is over. It is now time for business. Roll up your sleeves and start work without further delay. There is nothing to celebrate but there is so much work to be done. So, stop the blame game; account for your four years in power and move Nigerians to the next level in new jobs; new value addition for economic growth; less borrowing; decreased inflation and interest rates; reduced number of children out of school; more positive action and reduced propaganda.
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