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Govt Has Exited Recession But Nigerians Have Not – Dr Tayo Bello, Monetary And Development Economist

Olakunle Olafioye

Despite the promise of prompt passage of the 2018 Appropriation Bill, the National Assembly is yet to communicate its readiness to pass the proposal.

This development, according to a monetary and development economist, Dr Tayo Bello, lecturer in the Department of Private and Property Law, Babcock University, portends a major economic challenge to Nigerians. In this interview, Dr Bello speaks on other problems affecting the nation, including recession and the perennial fuel scarcity in the country.

 

The 2018 Appropriation Bill has lingered in the National Assembly for more than three months without passage. What is the implication of the perennial delays we have witnessed in budget preparation in recent years?

This government is not a serious government as far as I am concerned. However, whatever the President might have presented as appropriation bill, he has the powers to spend 50 percent of it, pending the time approval will be given by the National Assembly. This has remained a perennial issue. It has occurred before and it is happening again. It is important we understand that the direction the economy faces is shaky. In the area of forex management, they have been managing that on regular basis. In the area of inflation, they are still struggling but still unable to get a single digit. And when you don’t have approval for the passage of the Appropriation Bill, when are you going to spend on capital projects? You don’t really feel the impact of recurrent expenditure on the economy as much as you feel the impact of capital expenditure on the economy. It is capital expenditure that creates expansionary force on the economy. That is when the common man can benefit and get the dividend of democracy.

 

It was reported recently that the National Assembly was divided over the 2018 budget proposal with a claim that it was fraught with inconsistencies just as we witnessed in the recent past. Why is it difficult for the executive arm to come up with flawless proposal of late?

What we have nowadays as budget proposals are just “copy and paste”. Even the lawmakers complaining of irregularities over the proposals are doing so because the executive arm has accused them of certain wrongdoings and that is why they went to hire experts to look meticulously into the proposal. The lawmakers cannot detect the flaws in the proposals on their own. That was why they commissioned the experts who did forensic checking on what the executive arm of the government submitted to them. That is why they are able to detect the duplications and other fraudulent inclusions in the budget. They have been doing this for a long time and it will continue that way.

Is that the reason we have been experiencing the controversies trailing budget proposal in this country?

The fact remains that those in charge of the preparation of the budget are not working as expected. What they do is to get the figures for the previous years and replicate it in the new proposal. While doing that they re-present projects that had been budgeted for and executed in the previous years. They end up conjuring figure without serious consideration on the items in the proposals.  

Nigeria is still battling with fuel crisis that started in the last quarter of last year. Why has the problem lingered this long? And is there any ray of hope that the problem will be overcome in a short while?

There is this impression that we have overcome the challenge of fuel crisis but in truth, what they are doing is fuel rationing where Oando will sell today, Mobil will sell tomorrow and Total will sell the next day. What they are doing is that they have been doing it in such a way that you and I will not experience total scarcity; so that the country will not experience total collapse. That is why they resort to rationing of the product. And with that they have been able to prevent panic buying that often compounds the situation. The fuel situation has not improved at all.

Does that mean there can’t be a lasting solution to the problem?

The solution to this problem is total deregulation. Government has no business in importing fuel. And we, I mean Nigerians; have to brace up for this; we have to brace up for total deregulation. The government cannot continue to play politics with the fuel situation because they do not want to incur the wrath of the masses. When Jonathan wanted to increase the pump price from N86 to N145 didn’t you see the way Nigerians reacted? Where is Tam David West who said there was no subsidy today? He even said that the pump price of petrol should even go down further. Buhari increased it and nobody said anything, thinking that would be the end of the problem. Have they not come out to say NNPC has been paying subsidy since? We should not continue to deceive ourselves on this. The consumption, apart from the one smuggled out of the country, is too high. Unless several refineries come on board, Dangote Refinery, which is under construction cannot stop fuel crisis in Nigeria. Nigerians consume fuel a lot. We cannot compare our consumption rate in the past to what it is today. The consumption of petroleum products in Lagos State alone is far more than what some other countries consume. Apart from that there is no stability in power situation in the country. That is another reason why fuel consumption remains very high in the country.  The fuel people use to power their generating sets is far more than what we use to power automobiles. So, the solution to perennial fuel scarcity in Nigeria is total deregulation. There are a lot of Nigerians who went to other countries to establish refineries. Why did they not establish them in Nigeria? Our politicians should stop making empty promises while campaigning for elective positions because such fake promises will come back to haunt them after getting to power.    

Do you think the current administration has the moral right to moot the idea of total deregulation as you have canvassed?

That is exactly what I mean when I said politicians create problems for themselves when making empty promises during electioneering campaign. You don’t need to make bogus promises to get elected. If you make empty promises and you are unable to fulfill them you will be creating problem for yourself and for the country. Our politicians should put politics aside and face the reality.

The federal government recently claimed that the nation has exited recession but the Nigerian masses have repeatedly claimed they are yet to feel the impact of the country’s exit from recession. In your own assessment, what is the true situation?

The government admitted that the country was in recession because the price of crude oil plummeted below expectation. And then the government was not getting enough revenue from crude oil which is the largest contributor to the economy. But because the prices picked up again and they can now pay salaries, that informed the opinion that that the nation is out of recession. But for government to  truly cushion the effect of recession, people’s purchasing capacity must be stable. What is your purchasing capacity now? Can you compare the value of the N100, 000 you earn now with the one you earned two years ago? So, individually we are still in recession. If the government says they are out of recession, it’s because they are now able to pay salaries. But by and large, it would have been worst if crude oil price had not improved and if the militancy in the Niger Delta had increased. These two factors contributed to Nigeria’s exit from recession unlike Venezuela, which only relies on crude oil. They don’t have land for agriculture. Nigeria is a blessed country with fertile land for agriculture. If not for the problem of insecurity in parts of the North, food production would have increased beyond what we have now. The government has, to a large extent, been able to sustain increase in rice production.  It would have been a serious problem, if we are able to produce food and people have no money to buy.   

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1 Comment

  1. Ebuka Amaechi 11th March 2018 at 1:50 pm

    Story ! Story !! Story !!! God of traumatized Naija people will surely see Nigerians tru,After the 2019 Gen Elections,IJN.

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