Who is really in charge of Nigeria’s economy? Is there a coordinating and/or harmonisation point? Who do we really hold to account for the challenges facing the economy? Yes, we know we elected a President and a Vice-President who ultimately should be held accountable for overall policy decisions. But we also know that we did not elect an economic guru, a professor of economics or Nobel Peace Prize winner to be at the highest echelons of governance. Thus, ministers, advisers and assistants who have the technical knowledge are required to advise the President to make economic decisions that are in the best interest of the country.
It is imperative to assert that coordination is central in any venture that hopes to succeed. There are various push and pull factors headed in different directions which ordinarily should contribute to the realisation of governmental objectives. But if the various decision-making points are allowed to proceed in a staccato fashion, confusion will reign and the overall goals will not be achieved. During the Jonathan administration, we had a coordinating minister for the economy and an Economic Management Team. But the current administration is not modelled along the same line. The administration asserts that the current EMT is serving the purpose of steering the economy out of crisis and regularly meets to take relevant decisions.
However, recent decisions and altercations of monetary and fiscal policy authorities seem to suggest that the EMT may not be meeting or if they are meeting, they are not discussing the issues critical for the proper management of the economy. Before the last meeting of the Monetary Policy Committee on September 19 and 20, the Minister of Finance, Kemi Adeosun, had urged the MPC to bring down the Monetary Policy Rate. She spoke like someone who had no official channel of discussing with members of the MPC or an opportunity of a place where decisions on both the monetary and fiscal sides can be reviewed and eventually harmonised and made to work for the realisation of larger governmental goals.
In Communique No. 109 that came out after the said meeting of the MPC, it was clear that there was no meeting point between fiscal and monetary policies. A few quotes from the Communiqué will speak to this assertion. The first is under Domestic Economic and Financial Developments Output, it stated that: “Recognising that the conditions which precipitated the current economic downturn were not essentially sensitive to monetary policy interventions, the MPC again renewed its call for urgent complementary fiscal policies to resuscitate production and engineer aggregate consumption”. The second is under the Committee’s consideration: “The Committee acknowledged the weak macroeconomic performance and the challenges confronting the economy, but noted that the MPC had consistently called attention to the implications of the absence of robust fiscal policy to complement monetary policy in the past”. Thirdly, the MPC stated that: “While the imperative for ensuring financial system stability remains, the MPC reiterated the fact that monetary policy alone cannot move the economy out of stagflation”.
Fourth, the MPC stated that: “The MPC considered the numerous analyses and calls for rates reduction but came to the conclusion that the greatest challenge to the economy today remains incomplete fiscal reforms which raise costs, risks and uncertainty”. Fifth and finally, the MPC stated: The urgency of a monetary-fiscal policy retreat along with trade and budgetary policy, to design a comprehensive intervention mechanism is long overdue”.
What do these quotes show? It creates the Achebe picture of turning and turning in a widening gyre, where the falcon cannot hear the falconer. Things are falling apart and no one seems to be the coordinator or in charge. Different agencies which should have used their mandates to anchor and stabilise the economic ship of state are working at cross purposes. The communique clearly confirms what many enlightened Nigerians had long foretold. If there was a plan and a comprehensive intervention package, the MPC would not be calling for one. The administration had been called upon from the outset to come forward with an economic policy. But it has failed and refused to bring out any. Or, does it lack the capacity to draw up an economic blueprint?
Yet, we have an EMT that claims to be working, Pray, what exactly do the members discuss in the EMT meetings? What mechanisms exist in the EMT to harmonise policies? What information, knowledge and capacity are available to the EMT to make informed decisions? It is clear that the economic ship of state is floating like flotsam and jetsam in the ocean of lack of coordination. Nature abhors a vacuum and something fills up any available void. Are we still surprised about the present economic recession? The MPC warned about our getting into a recession around July 2015 but no one including the fiscal authorities listened. Indeed, there were no ministers as of that time, only the President and his lovely civil servants; this was within the time the President described ministers as “noise makers”.
For the MPC to consider fiscal policy flaws as the greatest challenge facing the economy after reiterating several times that the blame for the economic disaster lay more with fiscal policy and calling for the design of an intervention package says it all. Nigerians are no longer surprised at the quality of the interventions recommended by the EMT to get Nigeria out of recession – sell assets. It is just a knee jerk reaction that evidently is not well-thought out. Sell assets today to implement the 2016 federal budget? After selling the assets today, which ones will be available to be sold to implement the 2017 federal budget and 2018, etc?
The economic challenges of today are beyond the politics of the present actors. Nigeria can afford to do much better if we tap the competence, knowledge and capacities of Nigerians spread all over the world. Nigeria can do better with greater coordination. This muddle through approach is outdated and will not work. This is a wake-up call and challenge to the EMT to prove what value they bring to the Nigerian economy. But the bottom line is that we need to galvanise the team, add and subtract to its membership. History will not forgive the members of the EMT if in these times of grave national economic crisis, they continue to play politics without dedication to their job.