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Reforms and poverty alleviation
CHUMA IFEDI
THE Federal
Government claims that its current reforms will salvage the nation from the
cripling economic depression and massive poverty. Today, Nigeria is the third
least developed oil economy, the third worst developed oil exporting country
with very low human development index. According to the United Nations
Development Programme (UNDP), 70.2 per cent of Nigerians live below the U.S.
dollar per day benchmark, while 90.8 per cent live below two U.S. dollar per
day. Nigeria’s poverty level rose from 27 per cent in 1980 to 66 per cent in
1996. Our poverty profile continues to deteriorate.
The presidency believes that the new
National Economic Empowerment and Development Strategy (NEEDS) will turn around
the economy and consequently reduce the crisis of poverty. Nigerians are
sceptical about the prospects of the purported reform programmes for a number of
reasons. Firstly, leadership by example does not exist in spite of the
archestrated war against corruption. It is an open secret that a lot of wheeling
and dealing goes on between the executive and the legislators through which
billions of public funds are looted by politicians.
The British government recently revealed
that 55 per cent of corruption in Nigeria is perpetrated in the presidency. The
Financial Times of London also recently asserted that leadership in
Nigeria is still characterised by corruption. Senator Tom Daschle Democrat
leader in the United States of America Congress who visited us recently lamented
the high incidence of corruption in Nigeria and insisted that a country must
deal firmly with corruption in order to build a strong economy and attract
foreign direct investment. Nigerian politics is saddled with monumental
corruption despite official hypocrisy. Political patronage under the present
democracy is rooted in corruption.
Another factor militating against the
so-called reforms is the obvious incompetence of the new breed economic
operators at the corridors of power. Professor Charles Soludo, a former Chief
Economic Adviser to the President and now Governor of the Central Bank of
Nigeria, and Dr. Ngozi Okonjo-Iweala, Minister of Finance who are the current
leaders of the national economic team are too inexperienced, academic,
doctrinaire and utopian to make any positive impact on our national development
process. Groomed in the sophisticated theoretical concepts of the International
Monetary Fund (IMF), these neophytes hardly appreciate the basic problems and
deprived circumstances of Third World economy to which Nigeria belongs. Their
nations of monetization, accelerated privatisation and deregulation even with
the rising import of refined oil and dormant local refineries are evidently
counterproductive. Chief Audu Ogbeh, Chairman of the Peoples Democratic Party (PDP),
aptly captured the dreary scenario in his recent address to the South West
meeting of his party when he affirmed: "We now appear to allow ourselves to be
led by our so-called experts whose theories seem to be ill-digested and
hopelessly out of tune with the dynamics of modern day economic realities."
Nigerians are generally amazed that most
of the purported reforms are anti-people contrary to the public welfare
aspirations mouthed by President Olusegun Obasanjo during the Democracy Day
message a few week ago. How does he expect economic programmes which retrench
employees and inflict destitution on the citizenry to enhance living standards
and the quality of life? The president’s military autocratic disposition and
parsimonious character are sufficiently debilitating to kill whatever reforms
however well meaning they might be at inception.
Why should any right thinking government
in a developing country contemplate monetization in the public services in a
milieu of huge unemployment? For a poorly industrialized and largely
agricultural nation grappling with mass penury, such a measure is suicidal and
orientated to poverty escalation. Instead of creating more jobs, monetisation
drastically reduces available job opportunities. Motor drivers, cooks, stewards,
security personnel and other menial staff are retrenched to roam the streets and
of course join the bandwagon of miscreants. Other well governed countries strive
to enhance job creation and ensure that school graduates are gainfully employed.
No wonder, the International Economic Intelligence Unit classifies Nigeria as
the third most misgoverned country in the world after Kazakhistan and Honduras.
Other countries subsidize firms to increase employment by providing special
incentives and subsidiary tax reliefs. In India, many organisations like the
Indian Railways carry excess personnel in their establishment to promote job
opportunities. With improved industrialization, the surplus staff are retrained
and redeployed elsewhere. The primary function of government is to provide jobs
not to generate retrenchment. Monetisation aggravates poverty in the country.
Deregulation of oil prices is patently
irresponsible and naive. Why do we have to deregulate oil prices when in fact
none of the four refineries in Nigeria is working effectively? The inevitable
result is high prices of petroleum products which expectedly inflate prices in
the other sectors and increase the cost of living. As long as this negative
approach to deregulation prevails, mass protests and strikes will persist. Our
best bet is to rehabilitate the four refineries fully, guarantee optimal
delivery of refined mineral oil and then we may deregulate.
The fundamental concept of the National
Economic Empowerment and Development Strategy (NEEDS) which is to shrink the
domain of the public sector and buoy up the private sector is good in principle
but rather idealistic in our present circumstances. In our current state of
development, the private sector is far too fragile to bear the burden being
transformed to it from the public sector. The process of expanding the private
sector should be deliberately graduated in the context of our available
resources. Unemployment in the country is still high at 10.8 per cent in 2003
which means that about 6.4 million people were looking actively for jobs without
getting any. If the proposed rationalization of the public service is
implemented, hundreds of thousands of employees will be thrown out of jobs
without any hopes of finding employment in the fledgling private sector. The
situation is compounded by the reality that this country has no national social
security scheme of any kind to cater for unemployed people. From all
indications, the reform programmes spell nothing but abject poverty for
displaced and jobless persons.
With the worsening performance of the
National Electric Power Authority (NEPA), it is evident that the accelerated
privatisation scheme is definitely not on track. For how long shall we wait for
NEPA to be privatised to deliver efficient service to consumers? The Federal
Government has been draggling its feet thereby prolonging the exercise. Power
outage increases with the tariffs whereas supply of electricity continues to
dwindle precariously.
Nigerians yearning for democracy dividends
are gravely disappointed. Rather than democracy dividends, we are plagued with
some reforms which tend to make life more difficult. Pensioners of the Nigerian
Railway Corporation have not been paid for 25 months. Concessioning of the ports
by the Bureau of Public Enterprises will cost about 700 job losses.
The explosion of the capital base of
commercial banks to N25 billion, a new reform invented by the Central Bank of
Nigeria, will generate retrenchment of bank personnel in the wave of likely
processes of acquisitions and mergers. This will cause another crisis of
destabilization and impoverishment in the society. One would have expected an
increase of the capital base from N2 billion to N10 billion as proposed by the
Senate Committee on banking.
Nigerians appreciate the need for economic
and social reforms that will improve the quality of our lives. Obviously, most
of the current ones introduced by the present government will do more harm than
good because they counter public welfare and create more problems than they
solve. President Olusegun Obasanjo is not listening enough and feeling the pulse
of the common man. If indeed he wishes to carry the people along, he will
realise that what we require is mobilisation instead of deprivation of the
little comfort we enjoy.
• Chuma Ifedi, Satellite Town, Lagos.
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