Wednesday, December 5, 2012

Sense and nonsense of Sanusi’s economic recovery advocacy

The Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, on Tuesday, November 27 again stirred the hornet’s nest when he condemned the astronomic cost of servicing the nation’s civil service. To redress this, he called on the Federal Government to sack at least 50 per cent of its entire workforce. Sanusi, in his presentation at the Second Annual Capital Market Committee Retreat in Warri, Delta State, said the country spends 70 per cent of its earnings on salaries and entitlements of civil servants. He argued that having the Federal Government’s staff strength reduced by half would free up capital for infrastructure development in the country and prop up the economy.
Not done yet, the CBN governor added that the country does not need the 109 senators, and 360 members of the House of Representatives to make laws. He also decried the huge cost of running local government administration which he termed ‘wastage’ of funds. The Kano-born banker equally called for the total removal of petrol subsidy even as he wants those who have stolen fuel subsidy fund to be punished.  The CBN governor further advised the Federal Government to stop investments in infrastructure that could be handed over to the private sector.
No sooner had the CBN governor made these submissions than vitriolic attacks started pouring on him. Organised labour called Sanusi a “hollow economist”. According to the Nigeria Labour Congress President, Abdulwaheed Omar, “Since assumption of office as the Governor of the Central Bank of Nigeria, all Sanusi’s major pronouncements have been either directly anti-people or ruinous to the Nigerian economy.” The NLC, therefore, called for his sack.
A member of the House of Representatives has also reacted harshly to the pronouncement of the CBN Governor. The Deputy Chairman of the House on Media and Public Affairs, Victor Ogene, likened Sanusi’s action to that of a physician who would want to treat others but himself. He asked him to first prune the workforce of the apex bank. According to Ogene, the staff strength of the CBN when Sanusi took over in 2009 was 5,022 but that he had raised the apex bank’s staff strength to 6,015. “Instead of pruning down the staff strength, he has employed about 1,000 more people. The CBN has over 20 directors…”, the lawmaker added. Ogene said the National Assembly had a total budget of N150bn in 2012 to cater for 109 senators, 360 House members, thousands of civil servants and political aides but that the CBN had over N300bn to play with all alone.
It is pertinent to note that I agree with the underlying principles that informed the CBN governor’s submission but do not approve of his strategy of implementation. Yes, we need to reform the civil service! Yes, we need to cut down on our recurrent expenditure in order to pave way for more capital vote! Yes, we need to engage the private sector to handle industrialisation and manage businesses! However, I do not subscribe to 50 per cent reduction of the workforce be it at the federal, state or local government level. I do not believe that a unicameral legislature or scrapping of local government is the be-all solution to our economic woes. These measures will be counterproductive and cause social dislocation.
To my own mind, Nigeria needs to slaughter the monster called corruption and engage in fiscal prudence fast! The corruption statistics in the country are enormous, debilitating and appalling. Trillions are annually lost to corrupt practices. Countless probes have unveiled monumental frauds. The International Energy Agency said in a November 13, 2012 report that Nigeria loses a whopping $7bn to oil theft annually!  A November 25, 2012 news story in the Sunday PUNCH also revealed that “Over N5tn in government funds have been stolen through fraud, embezzlement and theft since President Goodluck Jonathan assumed office on May 6, 2010.” If these colossal sums of money could be lost to corruption in less than three years of this administration, then it is best imagined how much we have lost to the ogre since independence 52 years ago.
While presenting a paper titled, ‘Corruption, National Development, The Bar and The Judiciary’, at the 52nd Annual General Meeting of the Nigerian Bar Association in Abuja in August, a former Vice-President for Africa at the World Bank, Dr. Oby Ezekwesili, was quoted as saying that, “Over $400bn of the nation’s oil revenue has either been stolen or misappropriated since Nigeria gained independence in 1960.” If these monies were to be deployed to the provision of critical social infrastructure such as good roads, health facilities, quality education, among others, we would not need to go aborrowing to fix our critical infrastructure as we are in the habit of doing currently.
The Nigerian political elite’s penchant for waste is legendary. We have a Presidency which has fleet of aircraft and cars servicing only a handful while the nation has no national carrier. In spite of the monetisation policy, different arms of government still annually budget and purchase official cars. Billions are earmarked for food and travels while a whopping N2.2bn was recently approved for another presidential banquet hall despite an existing one built less than a decade ago. What profligacy! The state governors do not fare any better on prudence.
What is more, we need to fix the energy sector in order to meaningfully revive Nigeria’s economy otherwise we would continue to have growth without development. What kind of economy can survive on generators? Nigeria is the largest consumer of generators on the African continent, if not in the world. This trend has to be reversed so that people who engage in small and medium scale enterprises will be able to survive on their private businesses. We need to also make agricultural and solid mineral sectors attractive to investors in order to stimulate the economy. This is a way to ‘disincentivise’ the civil service. Our civil service is bloated because it is only government that is employing while the private sector is shrinking because of the outrageous cost of doing business in Nigeria. By the time these reforms are in place, any rightsizing and downsizing of the civil service will be meaningful as those affected in the purge, if paid their benefits on time,  will be able to engage in private enterprise.
It essentially bears repeating that President Jonathan should emulate the examples of the Malawian and Uruguayan presidents,  Joyce Banda and Jose Mujica, in his taste in office. Mrs. Banda of Malawi decided to sell off the country’s only Presidential aircraft and a fleet of 60 Mercedes Limousines on assumption of office. She also recently announced 30 per cent cut in her salary.  Her Uruguayan counterpart, Mujica, not only drives a 1987 Volkswagen Beetle, but also stays at his wife’s farmhouse. Besides, he donates 90 per cent of his monthly salary to charity. This is an exemplary conduct worth emulating by Nigeria’s political class. Unfortunately, this is one expectation the outcome is certain: An outstanding disappointment.