Kill Corruption, Don’t Kill the Economy

Nigeria’s biggest economic policy problem is that we have a President that thinks in one dimension — AND WHO WON’T GET THE HELP OF THOSE THAT DON’T.

Good or bad money?

Aso Rock seems to have no clue about basic economic principles of velocity of money, or even the principles of demand & supply. The economy in need of money is like a desperately sick patient in need of blood.

The sick patient who needs blood doesn’t know the difference between the blood donated by a saint or a sinner, by a teacher or a murderer. So if you are not willing to inject him with blood from a bad person, you better have blood from a good person at hand or else the patient will die.

Regardless of your good intentions. Mr. President go ahead and slaughter the lion of corruption, but don’t kill Nigeria with it!

Hence if you take out dirty money — like the President has appropriately been doing, be prepared to pump some good money back into the economy. They had no plans and are even worse implementing bad ideas led with banning, banning, banning. Like banning ever created anything in the history of mankind.

Policy Matters

The other day, Buhari’s super Minister, Governor Fashola was boasting at a townhall how 30% capital projects allocation in 2016 budget will save Nigeria from recession. Mr. Fashola should save us. 2 trillion naira of which 250bn is released in trickles in the 8th month of 12 months timeline can’t drag the country out of recession. You need at least 3–5% of your economy to avert recession; that is 5–10 trillion naira. A well timed stimulus package should have been delivered since August 2015, outside of the framework of the budget and the rotten civil service, using extraordinary legislation designed jointly by the president, the party and their legislators would have done the job.

Funny enough it is not even forex or the lack of it, that is the matter. The Central Bank of Nigeria can print naira let them print it. TSA as implemented have erased liquidity from the system. There is a right and wrong way to implement policy. They should seat down and be honest instead of playing to the gallery. For example the so called 5 trillion in Treasury Single Account (TSA), a zero interest fund seating at CBN that has no capacity to grease the economy, could be dispersed into the economy through fewer but designated banks acting as nominated managers.

Taking that TSA fund and putting 30% available at any given time in an accessible SBA type structure for SMEs. (up to your local ward level bank branch) at 3–5% concessionary interest — since it earns 0% at CBN, will jump start this economy for example.

Fact be told, the wisdom of warehousing TSA in CBN need be questioned, perhaps for fear of it being looted. But it reminds one of a stingy father who keeps all the money for himself. When he passes on, he sure won’t be around to keep it all. We once remembered an Obasanjo who saved and a Jonathan who looted that followed not too long thereafter. Dumb.

A team or a dimwit?

A leader can never be perfect but at least his team should fill the gaps and he should actively lean on the team not behave like a know all or surround himself with clueless sycophants.

Compounding the President’s economic problems are of course the lack of soundness of his own ideological proposals that detests business and investors, and keeps experimenting with our lives as well as the poor quality of people he has surrounded himself with especially that clown called Emefiele.

Worst of all is that when he even moves to create a team or anything close to it, he swears one in fifteen months late or 9 months after they’ve been rumored to be working. Who appoints an Economic adviser secretly? What a shame! Even the gentleman so appointed belatedly , Mr. Dipeolu carries a resume with non-profits and United Nations service when we need business crackheads as we head into recession. This shows a certain disconnectedness.

In Conclusion

This economy needs its blood i.e. Money. It is now going into severe shock. While we discuss budget that is not even acknowledging the emergency of the situation, we hope we will still have an economy to manage when this is all said and done. Otherwise it may be economic malpractice!