By Jerry Uwah
Nigeria’s unemployment and poverty problem has assumed catastrophic proportions. In a country with a workforce of less than 100 million people, more than 22 million are jobless. In the two years since Nigeria replaced India as the world’s headquarters of abject poverty, 15 million more have been pushed below poverty line. In fact, Nigeria manufactures six extreme poor people every minute.
The result is frustration and hopelessness. The story of Solomon Okon, a porter with Havana Hospital in Lagos, who lost his job during a rationalisation exercise is a sad reminder of a nation that has lost all sense of care and protection for its citizens.
Apparently devastated after
receiving the letter terminating his appointment, the 21-year-old who saw the
world collapsing on his head, attempted suicide by drinking insecticide. He
somehow missed the unscheduled trip to the grave due to timely intervention by
people of good will who rushed him to hospital.
When he recovered from his futile trip to the grave, the police
arrested him. Instead of sending him to a social welfare outfit for guidance
and counseling that would encourage him to see that Havana Hospital is not the
end of the world, the police charged him to court for attempting suicide. A
magistrate in Yaba promptly handed him an impossible bail condition and
railroaded him to detention.
He
languished in detention for two months before a report by Punch Newspapers
compelled human rights organisations to scramble for his freedom. His temporary
freedom has been secured but police prosecutors and a magistrate who is a
willing tool in their hands are waiting to return him to where he would be
frustrated enough to eventually terminate his life. That is the irony of being
the citizen of a rich country of poor people.
The agony of Solomon Okon who had a close shave with death would
pale into insignificance compared to the penury that the 2021 Appropriation
Bill would impose on Nigerians. The proposal is a gargantuan consumption budget
for politicians to be funded by a monstrosity of debts that would set the
economy staggering into comatose. It will push millions more below poverty
line.
It is
built on a tall tale of economic projections that even the architects of the
budget know would be impossible to attain. Things have become so bad that the
agony of Nigeria’s 30-month civil war could be mistaken for comedy.
Nigeria
is so broke that it cannot raise enough revenue to fund its grandiose recurrent
expenditure. Nigeria has got to the point where it has to borrow to feed. Any
economy at that stage is a calamity waiting to happen.
The
federal government expected revenue for 2021 is a paltry N7.8 trillion.
However, government hopes to spend N8.7 trillion on recurrent expenditure and
personnel cost. That alone is about 112 per cent of total revenue. In the past,
government only borrowed to fund its capital expenditures. Now it even borrows
to fund its unwieldy cost of governance. Nigeria can no longer afford its
stupendous cost of governance.
Ironically
government has arrogantly refused to cut its coat according to its cloth. It
has insisted on cutting its coat according to its burly frame even when it has
to borrow to buy the cloth.
One of
the grandiose things government would do in a year of devastating cash crunch
is to borrow N12 billion for the maintenance of the nine aircraft in the
presidential fleet.
The
presidential fleet is richer in number of aircraft than Aero Contractors which
has been on scheduled flights for decades in Nigeria. At lean times like this
people expected the number of planes in the fleet to be reduced to two or three
to cut operational and maintenance cost. The cash crunch has failed to impose
austerity measures on the rulers of Nigeria.
Government still buys expensive sports utility vehicles (SUVs)
for its officials at outrageous costs, while very little is spent on
people-oriented programmes. The 41 Range Rover SUVs acquired by Rivers State
government for judges would have cost well over N2 billion. Rivers state
government spent N2 billion on 41 people while millions are in penury. That is
the trend in the three tiers of government.
No one in
government believes that Nigeria is too broke to continue on its old indecent
extravagance. The projections on the 2021 Appropriation Bill are either
decidedly fraudulent or inadvertently misleading. Even the architects of the
budget know that the projections are not attainable under current
circumstances.
The
projection on inflation rate is practically unattainable. In the last three
years, government had repeatedly missed its budget inflation rate target. In
2019 the architects of the budget expected to push inflation rate pretty close
to single digit but ended the year with inflation heading deeper into double
digits. The 10.9 per cent projected in the 2019 budget could not be attained as
the year ended with inflation rate standing menacingly around 12 per
cent.
This year
the budget makers expect to end 2021 with inflation rate at 11.95 per cent. They
probably are day-dreaming. Even the Central Bank of Nigeria (CBN) expects
inflation rate to hit 14 per cent by the end of 2020.
The apex bank expects inflation rate to start climbing down
after 2020 but even that is an ambitious wishful thinking. Everything in
Nigeria points to higher inflation rate in 2021.
The Organisation of Petroleum Exporting Countries (OPEC) has increase its
projections on global oil consumption for 2021 based on impressive recovery in
China which is the world’s largest importer of crude oil.
That
projection would impact oil price positively, probably pushing it pretty close
to $50 per barrel during the year. That is good news for the federal
government. But Nigerian consumers of imported refined petroleum products would
have to pay more with rising crude oil price due to a weak naira and the
deregulation of the downstream sector of the oil industry. With crude oil price
possibly at $50 per barrel, the pump price of imported petrol would sail
perilously close to N170 per liter.
That
single development would push up prices of goods and services as manufacturers
and service providers transfer some of the higher cost of production to
consumers. Inflation rate would rise proportionately. The suspended electricity
tariff hike would soon come into force and escalate the cost of production and
inflation rate as well.
Besides,
the federal government’s gargantuan budget deficit in the 2021 Appropriation
Bill would mop up funds in the money market to fill its yawning budget deficit
and inadvertently price private sector fund users out of the market by
escalating the cost of funds and causing a spike in inflation rate.
The gross
domestic product (GDP) growth rate of 3 per cent for the 2021 Appropriation
Bill is equally ambitious and ridiculously unattainable. The International
Monetary Fund (IMF) expects Nigeria’s economy to inch up by a scant 0.7 per
cent in 2021 after the calamitous four per cent contraction expected in
2020.
That
sounds more realistic than the false prophecies of the 2021 budget makers who
see the IMF men as prophets of doom. Everything on ground points to very slow
growth in 2021. In fact, the only prospect of employment during the year is the
774, 000 street sweeping jobs flaunted by the federal government.
Any other
employment generating schemes would be shot down by dearth of funds and rioting
insecurity. Even agriculture which dared the COVID-19 lockdown in the second
quarter of 2020 and grew by a record 2.5 per cent might not perform the
expected wonders as murderous Fulani herds men and the religious terrorists in
the north-east make the farmlands more dangerous.
The
expected high cost of funds to be triggered by government massive invasion of
the money market would reduce the economy’s employment generation potentials
and hinder growth as well.
As employment opportunities
thin out, many would be frustrated into following the path of Solomon Okon.
Police would have many suicide missioners to prosecute.
*Mr. Uwah, a public
affairs analyst, writes from Lagos
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