Thank God Buhari and Emefiele are unlucky

If you have not read Tai Solarin’s 1964 article, I am sure you would be surprised by the title of this article. In that article titled, “May Your Road Be Rough’’, Tai surprised Nigerians on January 1, 1964 by wishing them a rough year. This was contrary to our tradition of wishing ourselves a prosperous new year. Tai knew that you can only make significant progress in life after overcoming great challenges. Though Tai Solarin was an atheist, I have no doubt that the Holy Spirit revealed that to him. Haven’t you read in the Good Book that the way to heaven is littered with torns? In this article, I will argue that it is a good thing that Emefiele, and of course Buhari, are unlucky.

A lot of commentators have argued that this was the ‘wrongest time’ to be a CBN governor, or even to be a president. The Economist magazine even said that Buhari was unlucky. The magazine also had very strong words for Emefiele. Surprisingly, at some point, Buhari almost started reechoing the comments from the magazine that he was unlucky, instead of counting his blessings. In this article, I will show you some unorthodox things Emefiele and Buhari would have to do if they want to write their names in gold in the history this country. Because things are hard at the moment, the masses might not resist some unorthodox prescriptions – government should grab this opportunity.

Before I go to my prescriptions, let me give you a hint of how bad things are. One, I am sure you know that some states are likely go bankrupt in less than 6 months from today. Not only that February allocation declined, a state like Osun just got a net allocation of 6 million naira in the month of February. Two, I am also sure you read the NBS’s report that inflation is at 11.2% and unemployment at 10.4% (some economists believe it is worse than this). Now, some commentators have argued that the hike in MPR was to curb the inflationary effect of the coming budgetary spending. Well, I advise anyone who wants to know how bad things are to read about the effect of high interest rate and high unemployment rate on the macroeconomics of a country. Three, the CBN governor’s tenure might not experience a significant rise in oil price. This is because at $55 dollars, most shale producers will have the incentive to pump more oil out of the ground, thus, increasing supply in an already saturated market. Four, the ‘disconnect’ between the monetary policy and the fiscal policy of this government would probably linger on – thus, causing uncertainty in the market. Remember there is nothing business hates like uncertainty.

Having stated the problems, there is no doubt that some serious and painful adjustments would have to be undertaken. After all, you have to take the bitter pill to get well.

Let’s get to the unconventional decisions government has to make. Emefiele should as a matter of urgency tinker with the rules guiding dollar deposits in domiciliary accounts. This could be done in such a way that it will not cause panic in the system. We don’t want those guys who have the 20 billion dollars lying in the banks to take them abroad. Banks should be allowed to lend this money to Nigerian businesses. This should be done in a way that doesn’t encourage the dollarization of the economy. Note that the reason most power companies are crying is because they have no money to put into the assets they bought. Nigerian banks financed almost 80 percent of their investments. If these dollars lying in domiciliary accounts are given to businesses, it will put paid to the scarcity of forex in Nigeria. If you think no one has thought about this, you might be wrong. Our very own Henry Boyo mooted something that sounds like this.

Now, remember Nigeria is going to borrow about $4.5 billion from abroad, this year, to fund its budget. Remember we have not started talking of the huge interest on this loan that our lenders are going to ask us to pay. Your guess is as good as mine – especially now that Standard & Poor is planning to downgrade us. For the uninitiated, if you are downgraded by a reputable rating agency, it means lenders would see you as a risky investment and thus might require more incentive, such as high interest rates. Sadly, we are already using a fifth of our budget in servicing loans. I’m sure this percentage will go up by the end of Buhari’s tenure. The good news is that the people keeping those monies in domiciliary accounts can afford to keep them for a year. Thus, they can afford to lend it to government, at reasonable rates, to fund its deficit budget.

Let us look at changes that can be made on the structure of Nigeria. Remember HRH Lamido Sanusi just told us that having 36 states is very unreasonable – he is not the first to have said this. Since it is almost impossible to collapse states, considering the constitutional impediments, Buhari should encourage federalism using some policies. There are some things he can do without having to ask for any constitutional amendment. One, he could encourage and help states to own and build oil and gas pipelines in their jurisdictions. This can greatly reduce the issue of vandalism. States will earn money from ownership of these assets. Two, he could ensure the privatization of assets such as NIPOST and our refineries. But this time, he should ensure the buyers have deep pockets and that these buyers do not assess funds locally for the purchase of these assets. The transfer of ownership of these assets can be done in phases.

That reminds me, it seems like this government hates the world privatization. If Buhari doesn’t privatize or encourage efficient concessioning of our seaports and airports, he might not achieve much in his four years in office. A cash strapped country cannot afford to pump in money into airports and seaports at this point – especially when some states can’t even pay workers. Someone should please study the Heathrow and Gatwick model.

If Buhari doesn’t tinker with the laws concerning Security Votes at all levels of government and the land use act, he is likely not to achieve the change he wants. Issues concerning how land ownership can enhance industrialization have been over flogged – I have decided not to talk much about it in this piece.

On a final note, please note that the President has two more years to act because rigorous campaigns will overshow development from 2018. Even now, I hear people like Gbenga Daniel, Kwankwaso and el-Rufai are being falsely accused of having presidential ambitions. This kind of accusation, whether correct or not, will intensify in 2018.