Recession: wayward consequences of good intentions


Good governance requires dexterity in political pointillism – connecting the dots between purposeful leadership and service delivery.  It is axiomatic that the road to hell is paved with good intentions; so too, is the road to economic recession paved with good intentions.  Painfully, Nigerians now know that good intentions can have wayward consequences.  Nigeria being an outlier means that dealing with it as a normal nation becomes consequential and a huge mistake.

Political promises induce public trust. Yet, a promise undelivered is no promise at all. And unredeemed good intentions remain a fluke.  As such, any unfocused leadership will falter, regardless of its good intentions. When that happens, vexation, agitation and ennui are natural responses, as is now the case in Nigeria.

It’s gratifying that Nigerian policymakers have been tasked to think outside the box.  They must formulate plausible policies that take into account competing priorities and fiscal constraints. Yet, good intention will not always amount to good policies. Oddly, thinking outside the box may have translated to recent calls to sell off some of the nation’s oil assets. With external reserves plummeting to $24.8 billion, government hopes to sell off some assets to support recurrent expenses and bridge gaps in the N6.06 trillion 2016 deficit-laden budget. But how can this benefit Nigeria?

The first good intention mistake was to adopt a deficit-based budget instead of a zero-based budget.  But then “change” had to be financed. At the current exchange rate, such oil assets will yield some $13 billion if sold, an amount less than what the same assets will yield in revenue over four years.  We know that previously privatized assets never yielded the desirable returns.  As National Council on Privatization disclosed, “only 10 out of the 400 companies privatized so far were assessed to be on relative sound footing.” In plain language: government assets sellers, cream off the accruing dividends. It’s not farfetched, therefore, that any oil assets sold now, will likely follow that same pattern.

An overview is worthwhile. Good intentions led to the establishment of Niger Delta Development Commission (NDDC) in 2000. Since inception, the Commission has gulped up N40 billion, with nothing concrete to show in return.  Now, the NDDC has a contingent liability of N1.3 trillion; and owed N500 billion by its funding partners.  NDDC is also indebted to some 8,000 contractors.  Good intention may compel President Muhammadu Buhari to pump more funds into the Commission; but the desirable policy decision rests in appointing a focused management team dedicated to turning the region around through faithful implementation of NDDC’s mandate, as he has done with Senator Victor Ndoma-Egba and Mr. Nasima Ekere.  The duo must run NDDC tightly.

With good intentions, the Buhari government spent some N6 trillion between 2015 and 2016 on public interest policies and projects. It bailed out cash-strapped states- but hardly addressed risky and runaway state borrowings. The return on that huge investment is a debilitating recession.  With good intention to check corruption, the FGN introduced the Single Treasury Account (TSA). The policy mopped up liquidity, reined in sharp practices, but also created a cash crunch that stymied public spending. With good intention, the government supported the deregulated aviation sector, yet fell short of creating the enabling environment required for Aero Contractors to survive.  Now government is talking, presumably with good intentions, about helping Aero Contractor refloat.

Apropos Nigeria’s recession and change mantra, the words of President Richard Nixon during his second inauguration, is worth recalling. “Today I offer no promise of a purely governmental solution for every problem. We have lived too long with that false promise. In trusting too much in government, we have asked of it more than it can deliver. This leads only to inflated expectations, to reduced individual effort, and to a disappointment and frustration that erode confidence both in what government can do and in what people can do. Government must learn to take less from people so that people can do more for themselves.”  These words are instructive in the context of governance and calls to restructure Nigeria.

Politics in Nigeria remains starkly partisan and virulent. History shows that politics in Nigeria transcend the realm of competing interests; self-centeredness remains prevalent and predominant. Hyper-partisanship and ethnicity, gets thrown in for good measure. Inevitably, it’s these values that compel politicians to express good intentions they never intend to honour.  The upshot is that government policies and projects fail when driven by transactions instead of public interest considerations.  As I have noted elsewhere, “transactions becomes in the end, the ultimate factor that compels the articulation and execution of policy.”

Desirable change is presumably positive. But undefined, a promised change can be negative.  As several Nigerian States queue up for gubernatorial elections, what form of change can the people envisage?  In several States, incumbent governors are pursuing succession plans or second tenure. Were elections a strict science, the electorates in States with upcoming elections should set aside good intentions and instead, evaluate precedents, similarities and patterns of unfulfilled promises.

Bad leaders rather than good leaders are thrown up by our warped political system.  Atiku Abubakar rightly characterized such as “accidental leadership”.  Such leaders govern with near impunity and lack of foresight; muzzling the opposition and alienating the electorate. Such leaders fail to consider their mandate as a sacred trust; rather they see their emergence as divine manifestation and thus seek renewed mandates even when clearly underperforming. Chastising elected Nigerian officials has become awfully tedious. Though Wayne Dyer suggests that “our intention creates our realities”, bad decisions made with good intentions, remain exactly what they are — bad decisions.  And this has been the bane of public policymaking efforts at the local, state and federal levels.   What Nigeria political leaders, often overlook is that “History is a better guide than good intentions.”

We must remember that the good intention of bailing out indebted states, only spurred some States into deeper fiscal profligacy. The result: an irrefutable recession with wayward consequences.  Hence efforts at ending the recession must go beyond make-believe policies. Seeking to offset federal and state debts or service the 2016 budget with the sale of long-term revenue-yielding-assets, will only result in Nigeria being trapped in a debt peonage.  The exit from this recession is simply “spend and cut”; we must offer people more money to spend, while cutting the cost of running government.


Obaze is MD/CEO of Selonnes Consult Ltd.


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