Nigeria, like most other countries, is battling the rampaging novel Coronavirus and its attendant difficulties from staying at home. Economic activities are put on hold and the petrodollar revenue is becoming abysmal. For the first time in history, a barrel of crude oil is sold at zero dollar, threatening the continued existence of our mono-economy.
The stark reality emerging from this momentous public health crisis is the economic blow it’s dealing with businesses, families and governments across the world with developing economies at the bottom of it. People are asked to stay at home for their own safety. Although with little compliance for the obvious reason, people rather contract the recoverable virus than perish from unrecoverable hunger in lockdown with no viable resolution in sight.
Like everywhere else, in Nigeria, the hardest hit are understandably the poorest whom wander around looking for sustenance to stay alive for the next hour. Some of these folks come out with nowhere to go except for relying on sheer luck and God’s miracle to live through the day. They have no guarantee of getting the next meal. Safety net from the government? No!
The vast majority of Nigerians trade in the informal sector where livelihood is determined by the meager income they earn from buying and selling or gratification from family and friends on a daily basis. Now that markets are closed, they have limited means of meeting the most basic of their needs – food. Prices of foodstuffs are hiked as if the prevailing hardship isn’t enough. Consequently, stories of untold sufferings, the like of which unseen before are abound in the land.
Countries that invested in their citizens by way of social security are less impacted by the lockdown. They provide relief materials to every citizen in need to cushion the effect of lost income resulting from this dreaded pandemic. This is in addition to the established system of paying unemployed citizens to benefit directly into their bank accounts monthly. They care for their vulnerable. So sweet indeed.
But Nigeria’s so-called palliative arrangement so far seems haphazard, chaotic, and out of sync with the downtrodden poor who are supposed to benefit from them.
I believe, now is the time for us to shift our paradigm majorly in all our public engagements. Nigeria should, in fact, embrace the challenge presented by this unprecedented time to make a radical policy change in relation to public spending. For instance, we can reduce the number of Federal Agencies by half, many of them outlive their usefulness or duplicative at best, and redirect the money to providing world-class healthcare. With this, you wouldn’t need medical tourism any longer. Get rid of the Senate chamber since they perform the same function as the House of Representatives. Nigeria should not be operating a bicameral legislature. It’s costly and beyond our affordability. Then use the money saved to create a Social Safety net where the desperately poor in the society are paid stipends monthly so they may live a decent life.
Thirdly, avoid investing in fiscal projects that have no direct bearing on the people, example here is why spend multibillion Naira on renovating the National Assembly Complex when it’s still in reasonably good shape? Why buy cars for senior public officials including members of the National Assembly when they can clearly afford it from their jumbo pay? Why does the Nigerian government spend billions annually upgrading or rebuilding the residences of top public officers in all the Federal Agencies? What’s the point of sponsoring people on religious pilgrimage with billions of public money when it’s supposed to be a private matter? What’s the essence of erecting flyovers and tall buildings when it’s not desperately needed, leaving people hungry and pupils without furniture in classrooms? Are roads and bridges more important than a starving single mother squatting with a family or friends haplessly somewhere? Why spend a significant chunk of the annual budget on running the government instead of investing in education and healthcare? Billions of public funds are spent annually in sponsoring privileged students on scholarships abroad. Why can’t we equip our educational institutions with the relevant technologies to match the standard of their counterparts in those developed countries we like to visit? The money saved from these can be injected in education and hospitals at different levels.
Why can’t we block all the leakages associated with public procurement and wasteful contract and expend only on critical infrastructure such as necessary roads and electricity? We must stop unnecessary expenditures.
The truth is that whether we admit now or compelled to later, our very survival as an Economic entity is on the brink and shaky, not immediately for political considerations but because our lifeline, the crude oil is becoming not so worthy anymore. It’s being supplied more than it is demanded in the international market, forcing the prices down to record low.
The 2020 budget is impossible to implement because it was projected on about $60 per barrel or so but is now selling at about $30. This downward spiral is unlikely to reverse to normal anytime soon as the major players are engaging in geopolitical macho by saturating the market with the product, causing supply to chase demand instead of the reverse.
So, please Nigeria, make your economy as diversified as your people. Even Saudi Arabia, another prominent mono-economy is contemplating a future without oil in their 2030 Vision and are pursuing it vigorously because they understand that oil is fast becoming less strategic owing to alternative sources of energy such as solar power and electric-powered machines and environmental preservation.
The world is faced with the greatest economic depression since the 1930s no thanks to COVID-19. I predict Nigerian situation would be worst in that oil, being the mainstay of the economy because the commodity is being relegated to near irrelevance internationally and we have not saved enough nor did we invest in human capital to withstand the windfall loss. This may result, I think, in salaries becoming harder to pay and extravagant expenditures will be impossible whether we like it or not.
Having said that, however, I believe with the correct mindset and determination from our leaders, we can convert this COVID-19 experience to our advantage by starting to look at how we spend public funds differently.
The country must smarten up, exploit alternative sources of national revenue, change our spending behavior, avoid wasteful adventures, and create an institution of safety-net to look after the most vulnerable among us. If not, I better not say what I see awaiting us.
By Amir Bagwanje wrote this from the United Kingdom and can be reached via email: firstname.lastname@example.org