FGN A GOVERNMENT WHICH CANNOT LEARN FROM ITS MISTAKES.
“Leadership and learning are indispensable to each other.
US President John Kennedy, 1917-1963.
“Buhari submits 2021-2023 MTEF/FSP to NASS
· As FG proposes N12.66tn budget
· Deficit of N5.161tn; loan N4.28tn”
VANGUARD, July 22, 2020, p 28.
America’s youngest President ever would be remembered for stacking his advisers with the top brains he could find. Later in a book by that name, David Halberstam called them THE BRIGHTEST AND THE BEST. The search for the best people to assume important positions remains the first task of any national leader because on them lie the success and failure of his government. Nobody can ever accuse Buhari of selecting the most outstanding people for assignments. All one needs to remember is that the President scrapped the Board of the Niger Delta Development Commission, NDDC, in favour of the Interim Management Committee, IMC, which is now entertaining the world to a grand display of washing dirty underwears in public. The NDDC crowd represents the rest of the mistakes Buhari has made – and from which he will not learn.
The proposed 2021 budget is even a worse form of self-deception and planned devastation of the Nigerian economy than all the previous ones which the FG had inflicted on the nation in the name of change. If an enemy had wanted to destroy this country, it could not have done worse than the Buhari administration. Unfortunately for us, we are doomed to endure for almost three more years a Federal Government which would have ruined Nigeria beyond redemption by the time it leaves office. All these calamities will befall us because we have leaders who have stopped learning decades ago; people still living in 1985.
Insanity had been defined repeatedly as “doing the same thing over again and expecting a different result”. The 2021 budget is nothing more than the 2016, 2017, 2018, 2019 and 2020 budgets reproduced with the figures altered, some words changed and increased to create the illusion of progress. Yet, within and outside the FG, there are factors which point to a different outcome next year. Let me provide some examples which are representative of others.
“FITCH: Nigerian Bank’s Lending to Shrink 25% in 2020.”
THISDAY, July 1, 2020 p 23.
Banks as every Level 100 student of Economics knows constitute the engine room of the economy. Banks lend more to an expanding economy and less to a declining one. Obviously, banks’ lending will shrink only because there will be no clients wishing to borrow or fewer profitable projects. Either way, the economy will contract when a significant segment of the private sector of the economy reduces borrowing and bank lending shrink correspondingly in 2020.
Brighter students will also be aware that a lot of the lending for one year will influence the economy for a few years into the future. So, investments that will be shelved in 2020 will have negative impact on the economy well into 2025. It is doubtful if the FG’s budget managers take such variables into account when preparing budgets. This explains why no single budget had ever turned out well.
“LCCI, experts worry as debt rises by 127%”. PUNCH, July 24, 2020, p 22.
First the Lagos Chamber of Commerce and Indusry, LCCI, made the observation that “debt profile grew by 127 per cent from N12.6tn in 2015 to N28.6tn as of March 2020.” The year is not ended yet; so the debt might rise above that.
Second “only recently, the National Assembly approved the revised 2020 budget of N10.8tn. The recurrent component was N4.9tn, which is 45.4 per cent. The capital component was N2.49tn, which is 23 per cent of the budget, the debt service component is N2.95tn, which is 27.3 per cent of the budget…..the debt service is 118 per cent of the capital budget provision.”
While it is unlikely that 100 per cent of the releases for capital projects will be achieved – given the FG’s track record – the recurrent and debt services expenditures will be met. So, if the borrowing stops now, the percentage of the debt service to capital will certainly go up. This FG, unlike any other one since 1985, is a debt-addict. All addictions represent the outcome of a habit which those seized by it allow to grow over time. Invariably, a government’s resort to debt-financing of its budgets is a product of a leader’s mind-set. A government which for five years failed to raise sufficient revenues to execute its programmes and had to resort increasingly to borrowing has lost control just as the drug addict eventually does as he needs higher doses of the drug each time around.
Just like the common drug addict, the FG and its incompetent agents in the Debt Management Office, DMO, have lately engaged in poor quality propaganda with advertisements of some roads. Like false advertisers of fake products, the DMO recently had published portions of roads showing BEFORE and AFTER conditions in a shameless bid to convince Nigerians that the proceeds of loan are well spent. It is the sort of deception unbecoming of a government which expects its leaders to be respected for at least two reasons.
Noticeably, locations of the portions of the roads advertised are not disclosed; neither are we told whether the entire road is as shown under AFTER or only a part of it. A friend told me that only a small portion has been repaired as shown with regard to the Okene-Lokoja road. Second, the impression is given that all the loan goes into roads; when indeed, the lion’s share goes into recurrent expenditure. Governments lose respect when they lie so shamelessly. And, lying and addiction go hand-in-hand. Addicts are naturally deceptive; they hide facts.
“Poverty has many roots; but the tap root is ignorance.”
US President Lyndon B Johnson, 1908-1973.
Johnson replaced, Kennedy when the young President was assassinated in November 1963. His focus as US leader was Health, Education and Welfare. He was passionate not only about the education of the young but of the leaders as well. Johnson made that observation at a workshop for top government officials who were forced to learn new things before advancing proposals for government action. It was Johnson’s belief that the real tap root of poverty is the ignorance of the leaders.
Understandably, Nigeria became the Poverty Capital of the World in 2018; we have strengthened our grip on that awful title in 2019 and 2020. We are unlikely to relinquish it until Buhari goes in 2023. His lack of capacity to learn new things, as evidenced by the 2021 budget, will stand in the way of any useful change; and he has Ministers as well as Heads of Departments and Agencies who are clones of himself – people stuck in the distant past; incapable of learning.
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