Nigerians are beginning to wonder the secret behind the ease with which the Central Bank of Nigeria (CBN) governor, Mallam Lamido Sanusi Lamido gets the government to endorse some of his unpopular fiscal policies. These policies are quite good but deployed improperly. It can be likened to a man that put a cart ahead of his horse and except the former to do magic.
The fundamental thing any economist or fiscal policy formulator should do to help Nigeria get back on her feet is to design a socio-economic framework that will address issues of slow economic growth. If our national economy is built on a sound fiscal outline, economic growth will be rapid and predictable. It is pertinent to note that problems of infrastructural decay, unemployment, poverty, and insecurity cannot be addressed by the major fiscal policies being deployed by the CBN. For unknown reasons, Sanusi has been concerned with “copying and pasting” fiscal policies that have been successful in advanced economies. In designing fiscal policies; the purchasing power of citizens, population size, state of public infrastructure, literacy level, culture, and religion are taken into account. That is the reason why a fiscal policy that is successful in country A may not do well in country B.
For instance, Sanusi championed the removal of fuel subsidy simply because countries such as the United States, Britain, Germany, and Canada had done same in the near past. He however refused to consider the fact that citizens of these countries earn far above the $2 a day that over 70% of Nigerians are worth. Nigerians would be too glad to buy a liter of fuel for N150 if public and private sector workers are paid the equivalent of what their contemporaries earn in those countries Sanusi always site as examples.
Sanusi and the minister of Finance, Dr. Ngozi Okonjo-Iweala sweet-talked the federal government to remove fuel subsidy based on pressure from western-backed World Bank and IMF. Ironically, the same west that is against fuel subsidy in Nigeria is subsidising critical sectors of their economies such as agriculture, housing, and transportation. Who is fooling who?
Subsidy on petrol was eventually removed despite the outcry by Nigerians. Today, the purchasing power of the 70% of Nigerians living below poverty line has been weakened to a point where life no longer makes sense. Those of us that were against the removal of fuel subsidy did so based mainly on facts. In order to hoodwink government, the fundamental issues we raised were ignored while we were labeled stooges of the cabal milking the nation dry in the name of fuel subsidy. How can I be a stooge of the cabal and still call for the investigation of the fuel subsidy scheme? Like millions of other Nigerians, the only way I benefit from the fuel subsidy is the money I save each time I buy petrol for my car or generator.
Right from the beginning, I have accused both Sanusi and Okonjo-Iweala of leaving substance to pursue inconsequential issues. My argument has been that the best way to remove fuel subsidy is to make our refineries operate at optimum capacity so that nobody will import petrol and demand for subsidy. Sanusi and Okonjo-Iweala were clearly afraid of the cabal. It was for this reason they went for the removal of subsidy; leaving the fate of 70% Nigerians living below poverty line at the mercy of unpatriotic corrupt importers. Everybody, including Sanusi and Okonjo-Iweala knew that the removal subsidy on petrol was anti-people. Instead of sweet-talking government to make our refineries work, they chose to serve the interests of western democracies.
Even the man in the village knows that Nigeria was not consuming the quantity of petrol that was being projected in government circles. Sanusi cannot claim to be unaware that a gang of unpatriotic Nigerians with their foreign collaborators were sabotaging our refineries in order to promote the import culture. But for the eye-opening work done by the House of Representatives Ad-Hoc Committee on Fuel Subsidy headed by the now disgraced Farouk Lawan, the clan of subsidy thieves would have remained unknown to Nigerians. The committee set up by Okonjo-Iweala was a face-saving effort.
The other “cart before the horse” thing the CBN governor did had to do with the cashless policy. There is no doubt about the fact that the cashless policy is good. The truth however remains that Nigeria is not yet ripe for it because of poor rural penetration owing to infrastructural issues. In this regard too, he was able to sweet-talk the federal government to obtain approval despite massive opposition by Nigerians.
The latest of them is the planned introduction of N5,000. Clearly, this development does not in any way give credence to the cashless policy being promoted by the CBN. A country that is desirous of pursuing a cashless policy has no reason to bother about the desire of people or corporations to hold or move cash in large quantities. With the full commencement of the cashless policy, no individual or organisation will have the need to hold or move large cash about. It is clear that current anti-graft policies are making it difficult for people to launder proceeds of corruption through the banks. The only way open to the few corrupt people among us is to keep the raw Naira at home since doing so in foreign currencies poses some inconveniences in terms of spending. This could perhaps be the major reason why the CBN has come to the aid of corrupt Nigerians by raising the holding value of the Naira. Why should people prefer keeping money at home or in the office when we have banks all over the place?
Apart from increasing the holding value of the Naira, there is practically nothing positive in introducing the N5,000 notes. It will rather cheapen the face value of the Naira. The ease with which Sanusi gets the federal government to endorse some of his fiscal policies is appalling. The question on the lips of millions of bewildered Nigerians is: how many cubes of sugar does Sanusi lick a day? His tongue is so sweet in the ears of the president.