The past week brought out some weaknesses in governance in this country. The three quickly identified ones are the lack of strategic thinking, policy incoherence, and insensitivity to the plight of the citizens by the rulers and leaders. The government must of necessity be conscious of short and long term socio-political and economic effects of activities of its neighbours in physical space, trading partners and regional blocs. It must be concerned with the welfare of the citizens.
Recent and current trends across the globe seem to show that God is angry with the world and is demonstrating that he can destroy the world with flood as he did in the time of Noah. We know that even then, he did not destroy everybody so that procreation can continue, and we can live today as if nothing happened.
As an undergraduate, whenever we were informed of the great global economic recession of 1929 to 1936, when John Maynard Keynes rescued the world with his strategic thinking, which was encapsulated in his book popularly referred to as “The General Theory”, I would think that all countries in the world were affected. Later, I got to know that the word “world” was just to show the magnitude of the effects on a large number of countries affected. It is like the recent COVID-19 tagged global pandemic. Some countries merely heard of it but never experienced it. I suspect that studies are still ongoing to unravel why Africa defied the predictions that only few people would escape death on the continent from the pandemic given the level of underdevelopment in healthcare and health facilities. As religious people, we have the answer: ‘God works in miraculous ways.’
Going back to where we started from, the issue of strategic thinking has to do with the flood that is currently threatening the existence of many Nigerians and their livelihood. Farms and farmers’ houses have been submerged by flood, partly due to rains in those areas, and largely from the release of water from the dams constructed by our neighbours. When I watched Governor Douye Diri of Bayelsa State on a television news package navigating his way into the house where former President Goodluck Jonathan’s mother lives, it became clear that water has no respect for anybody. Few days later, Jonathan himself was in a boat taking him, as we were told, to his mansion! Flood and flooding or any other natural disaster can occur anywhere. One hopes other past and past-to-be leaders will not be caught in such a situation in future for failing to do what should have been done.
In formulating economic policies, we are advised that we must study the economic position of our trading partners and anticipate their reactions to our proposed policy, just as we must protect ourselves against adverse effects of their economic policies. Strategic thinking in the context of a country indicates that there must be established bodies that study neighbourhood activities, whether physical, political or economic, for early prevention and response. That is the role of research institutions, whose leadership position must be headed by a specialist in the core mandate of that research institution, and with proper funding so that it can be held responsible if it fails in its duties to advise the government. Many of our research institutes have been on strike for inadequate funding, and sometimes for the imposition of leadership that barely knows anything about the core mandate of the research institute. There was a time when a core medical scientist was posted to head a social science research institute in the name of ‘job for the boys.’
At the time our neighbours were constructing dams, a strategic thinker would have envisaged the short-, medium- and long-term effects on our country and proposed a solution. Since we cannot prevent the neighbours from constructing dams, it behoves us to construct dams or reservoirs that will prevent flooding whenever water is released upland. Hopefully, the government will work out a permanent solution to the current flooding rather than just wish it away as a natural phenomenon.
The issue of policy incoherence was glaring in the current attack or discussions between the Minister of Finance, Budget and Planning, and the Central Bank of Nigeria on the planned naira redesign. The CBN has its autonomy from the fiscal policy institution. The battle for such autonomy has been fought and won globally long ago but that does not mean the absence of synergy between the two institutions. The two major economic policies that shape a country’s development directions are monetary and fiscal policies, and they must align with each other to achieve the desired macroeconomic objectives of the nation. There have been situations where the CBN was pursuing restrictive monetary policy while the ministry was pursuing expansionary fiscal policy which are contradictory, and render one of the policies ineffective. There is wisdom in working together.
On the planned naira design, is this time appropriate given the financial cost, the bad shape of the foreign exchange market, and political space? In August 2016, The PUNCH published my article on naira re-designing at minimum cost, where I suggested the swapping of the colour of N1,000 note with that of N500, in view of the huge amount of the currency outside the banking system as a result of treasury looting by government functionaries that departed a year earlier, and the use of the loot to purchase foreign currencies with resultant massive depreciation of naira then. The CBN, in its wisdom, ignored that advice.
The CBN said it spent N58.6bn to print naira notes valued at N1.06 trillion in 2020. Of course, those new notes must be restricted to some people because most notes in the public domain are not near new. If that is the cost of printing the same currencies, it must cost more to print re-designed currencies. I agree with those who said the cost of printing the new series of banknotes would be an additional burden on the country’s fiscal strength. There is no truth in the information that a country should change its currencies between five and eight years, unless it is a Nigerian law.
During Chukwuma Soludo’s time as CBN Governor, the Nigerian mint facilities were made functional to reduce the cost of producing new notes. Are the facilities still functional? Why must we use scarce forex to print new currencies? In fact, it is now difficult to get foreign currencies from the banks, even for those who have domiciliary accounts.
If part of the rationale for the redesigning is to hit bandits and terrorists, the announcement and the gap between now and when the change will take place has given them the opportunity to strategise. First, they, like looters and other currency hoarders, will start changing the domestic currencies with them into foreign currencies and second, they will likely be demanding foreign currencies from kidnap victims. As can be noticed, the value of the naira has further depreciated since the announcement of the coming new notes. Whatever money is being hoarded by politicians and the like are meant for election period, so let them bring out what they have and spend now rather than convert the same to foreign currencies and change to new currencies in the coming year for campaign.
The third aspect of this write-up that has to do with insensitivity relates to the issues of severance packages. Pensioners have the right to kick, just as the current workers also have the right. Many workers are being owed salaries for shortage of revenue, and many pensioners have not been paid for years based on the same reasons, yet those who begged to serve and were given the opportunity to do so, living on taxpayers’ funds, believe they have the justification to get severance pay! We make governance unnecessarily expensive, and make policy decisions punitive to those outside the government circle. There is the need for laws that should prevent the governments owing salaries and pensions from benefiting from any severance package.
