The Continuing Transition

I had some difficulty selecting a title for this week’s article. The article dwells on multiple matters and I needed to find a common thread through all (or at least most) of that mixed bag. I toyed with several options but in the end settled on ‘The Continuing Transition’ as I became convinced that many of the thoughts I contend with may be symptoms of the yet uncompleted transition Nigeria is going through.

The 2008 Budget
The President presented his first full year budget to the National Assembly last week. He proclaimed it a “Budget for the Ordinary Nigerian”. The budget assumes a $53.83 oil price (up from $40 in 2007) on crude oil production of 2.45 million barrels per day; and targets GDP growth rate of 11%, exchange rate of N117 to $ and inflation rate of 8.5%. Federal government spending net of debt service and statutory transfers is N1.89trillion and the budget accommodates a deficit of N0.56trillion or 2.5% of GDP. The spending priorities are Security/Niger-Delta (N444.6bn or 20%)-what is the exact split between core military/defense spending and developmental expenditure on the Niger-Delta?; education-N210bn or 13%; Energy (N139.78bn)-again what is the split between power versus oil and gas?; and agriculture and water resources (N121.1bn or 7%).

Beyond the figures however, a clear philosophical and policy framework underlying economic planning is not yet available. We have NEEDS, NEEDS 2, 7-Point Agenda and Vision 2020 all flying around the air, but there is yet no clarity and focus in the direction of governance. That lack of clarity manifests in some confusion, such as one Minister wanting government to build a petrochemical plant; the emergence of a new state-owned telecommunications company named NIGCOMSAT; and an emphasis so far on reversing the previous government’s actions such that no privatization or concessioning completed by the last regime can be presumed immune. It is not yet clear whether for instance the reversal of the privatization of the refineries was done because they flouted due process and transparency (in which case I would support the reversal and expect a fresh process of privatization to have commenced) or because the government does not believe in privatization whether of the refineries or anything for that matter. We would hope someone will produce a clear, coherent and sustainable economic policy framework before year end?

The President and the Judiciary
Just as we were beginning to understand and applaud the President’s posture of non-interference in the affairs of the National Assembly during the ‘Etteh Affair’, the President contradicted his own posture by publicly interfering with the affairs of the Judiciary. He warned the judges against “playing to the gallery” and pandering to public sentiments. Specifically he criticized harsh bail conditions imposed by several courts in recent times. In my view, the President’s comments were inappropriate. The President’s party, the PDP has several cases before various election tribunals all over the country. Two of the party’s ‘selected’ governors-Andy Uba in Anambra and Celestine Omehia in Rivers have been removed by the Supreme Court; two others (Governors Idris and Dakingari in Kogi and Kebbi respectively-the latter being in addition the President’s son-in-law) have had their elections nullified by election tribunals and are battling before appeal courts to stay in office; The President himself is defending his election before the Presidential Election Tribunal; and the major victims of the ‘harsh’ bail conditions have been the President’s former gubernatorial colleagues. Is it proper in this context for the President to be seen to publicly seek to influence, admonish, cajole or some may even say threaten their Lordships?

Obasanjo’s Shadow
It seems everything going on both in the PDP and the government is currently defined in relation to former President Obasanjo-whether you are for or against him. The whole tenor of the forthcoming PDP Convention is based on pro or anti-Obasanjo dynamics; there was a strong anti-Obasanjo element running through the Etteh Affair; and some in government operate in reversal-mode the frame of mind of which increasingly appears to be reversing all that Obasanjo did. I suspect that the reluctance to adopt (or even just amend and re-name) NEEDS 2 to reflect the priorities in the 7-Point Agenda may have something to do with an unwillingness to carry on an Obasanjo legacy. Which, in relation to many of his actions in economics (rather than politics), may be a mistake.

Commonwealth Games 2014
The Commonwealth Games in 2014 will be staged in Glasgow, Scotland and not Nigeria. Thank God! I have not heard shouts of pain and anguish from any Nigerians (except perhaps the bureaucrats who would have had a lot of contracts to award) since the hosting rights of the 2014 Commonwealth Games went to Glasgow, Scotland. I think we have bigger priorities-power, Niger-Delta, transportation (rail, road and water), rural development, crime and security, education, health, internet connectivity and access, and many more-and I suspect so does the bid committee. I imagine they are telling us to invest on all these and then come back after ten years! No twenty.

Meanwhile can anyone imagine how many jobs will be created if the Abia State Government converted Enyimba FC into a limited liability company, contributed the Enyimba Stadium as its own equity in the business, persuaded all millionaires from Abia to take up N1million equity or more in the company, (and all Aba residents and traders and Enyimba supporters to take up N1,000-N100,000), and then allowed the company to be run as a business enterprise with a professional management team? Can you imagine if the same thing were to happen to Stores, Rangers, 3SC Shooting Stars, Bendel Insurance, Kano Pillars, Sharks, Mighty Jets, Lobi Stars etc? Can you project the increase in gate-takings, merchandise revenue, advertising and co-branding income, facility rentals and broadcast revenue? Unfortunately our sports administrators are too busy fighting over crumbs to see the big picture.

Let’s end the Transition
In May when the new regime was sworn in, my projections to some clients for whom I carried out some scenario planning included a six-month period in which President Yar’adua is still trying to settle into power and wrest full power from the ancien regime. That has come to pass, except that the ‘transition’ period now threatens to be longer. Unfortunately until the intra-regime transition is over, no real policy direction may emerge, square pegs will remain in round holes, foreign and domestic investors may hesitate and adopt a ‘watch-and-see’ attitude and a period of policy drift may unfold. We don’t want that, do we?