Bad Economy: Oshiomhole Tackles IBB •Says He Owes Nigerians Apology •APC Fumbles The More

By cattnews on July 3, 2017


Views: 614


Former governor of Edo State, and a chieftain of the ruling All Progressives Congress (APC), Adams Oshiomhole, last week, expressed his concern as regard the spiral state of the country’s economy and whom to hold responsible.

The one-time president of the Nigerian Labour Congress (NLC) stated that former military president and ‘restructuring advocate’ General Ibrahim Badamosi Babangida (rtd) owes the nation an apology for helping to bring it to its present level.

Oshiomhole, who was represented by the General-Secretary of the National Union of Textile, Garment and Tailoring Workers, Comrade Issa Aremu, at the 5th Triennial Delegates Conference of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in Abuja, said it was under the Babangida regime that “the economy was restructured” and the naira devalued.

On the face value, the assertion is true, but should it be widened, all ‘Leaders’ who have served as the head of government at the national/federal level owe Nigerians an apology; not only IBB.

IBB’s economic restructuring which led to the devaluation of the local currency: Naira, was not the genesis of the country’s economic woes, the measure was rather ‘unknown’ to even IBB himself, a cosmetic surgery that would not have worked. The measure was like treating the symptoms of a disease instead of the disease itself.

The cause of the economic woes which now plagued the country mercilessly, predated the IBB era, it was actually triggered by the military regime of General Yakubu Gowon (rtd), 1966 to 1975 and perfected by the military regime of General Olusegun Obasanjo (rtd), 1976 to 1979.

A decree known as the ‘Nigerian Enterprises Promotion Decrees (NEPD) of 1972 and 1977’, also called the ‘Nigeria indigenization decrees’ is the source of the country’s economic woes. And this economic predicament was worsened by fiscal irresponsibility embarked upon by successive military regimes and civilian administrations.

In 1972, Gowon signed a decree into law, the decree allowed the transfer of those businesses in the private sector which were believed to be within the competitive of indigenous expertise (schedule I, 21 Enterprises), and required a minimum Nigerian interest of 40 per cent equity in other businesses where Joint participation was still considered necessary (schedule II, 35 Enterprises), while the remainder (80 Enterprises) were allowed to continue to operate under full foreign control.

The Obasanjo military regime modified Gowon’s decree by Decree no3 of 1977. The modification provides for triple schedules of enterprises for better participation of Nigerians instead of the former double schedule.

Schedule one: This comprises of enterprises which are exclusively reserved for Nigerians. The Decree reserved the right of participation and ownership of all the items exclusively in this schedule without any foreign interference. Some of the items in schedule 1 includes: Advertising, public relation business, assembling of radios and television, bottling of alcohol drinks, baking of cake and bread, and among others. 

Schedule two: Comprises of enterprises in which native must have major interest at least 60% of equity interest. These include: Banking (Commercial Bank, Merchant Banks, Development Bank), basic iron and steel manufacturing, beer brewing, and clearing and forwarding agencies. 

Schedule three: In this part, Nigerians have at least 40% equity interest. its includes the following; fertilizer production, manufacturing of basic industrial chemicals, manufacturing of tobacco, and distilling and blending of spirits such as whiskey, brandy, ethyl alcohol, etc.

Simplified, the indigenization policy, largely, seized many vital business interests from foreign ownership and handed them over to Nigerians.

Implication: The policy took businesses which belonged to foreigners who had toiled and invested probably most of their fortunes and gave them to Nigerians; these were already well-groomed and blossomed ventures handed to Nigerians, who have done nothing to deserve such businesses.

The policy did not take into consideration the fact that business management requires an act of ‘delicate balancing’ which only the owner can intuitively grasp.

As the saying goes, ‘what one doesn’t labour for could be difficult to keep (at times).’

Thus many industries within a short period closed or ran into problems.

The organized private sector, back then, was virtually affected.

The effect of the policy wiped away, at least, three quarter of the strength of the country’s private sector, because the Nigerians who replaced the foreign owners could not manage these businesses as the European owners would have done, very few of them were able to locate the various businesses area of ‘delicate act of balancing’, thus most went under; got liquidated.

Only companies with exceptionally popular brands survived.

What operates now in the country is not the private sector in the strict sense of it, which is the reason the Public Private Sector Partnership (PPP) initiatives will never work in the country.

What obtains now in the country is the public sector funded private sector and not the genuine private sector funded private sector.

Two sectors uphold the economy of a country, the public sector and the private sector; while the former plays the regulatory and policy role and at times the bastion of fund, the latter serves as the engine room of the economy, it translates policies and actualizes public sector initiatives, it provides the needed succor for the masses- employment and the needed creativity upon which the economy rides and flourishes.

The norm, presently, is that Nigerians who make it to the leadership position, funnel public sector funds into the private sector.

All the past leaders have done it, IBB, Obasanjo, Goodluck Jonathan, and even, Bola Tinubu.

It doesn’t work, it is the case of ‘easy comes, easy goes’, such monies are badly managed.

An example of the ‘tsunami’ effect of this policy is in the Banking sector, two first generation banks; First Bank and Union Bank are, at least, two of the banks that have survived till date, but what Nigerian banks do today is not real banking.

All the banks rely on public sector fund to thrive, they do not rely on private funds.

A bank that relies on private fund, dare not run a huge risk portfolio, or flout the directive of the Central Bank of Nigeria (CBN).

The interest rate fixed by the CBN is generally ignored by the banks, and the CBN dare not enforce it because there is always a godfather in the background, and once such godfather intervenes, the CBN backs down and such bank(s) continues to rot away, affecting the economy in the process.

What obtains now is that since the CBN finds it difficult to keep the interest rate down, it has decided to shift it gradually towards what the banks prefer, thus Nigerians should expect higher interest rates in the future! 

Obasanjo shouldn’t take all the blame for the 1977 modified act because the regime, at that time, ran a government with a unique bond shared among the three top officers: Obasanjo, late Shehu Musa Yar’ Adua and Theophilus Yakubu Danjuma.

As military head of state, Muhammadu Buhari and late Tunde Idiagbon, on one hand, and IBB and late Sanni Abacha; tried to re-enact such bonding but the one of the Obasanjo regime was the most special, they took critical decisions in tandem.

As a result of this policy the country’s economy suffered a terrible implosion, such an implosion takes time to manifest, it is like the onset of a terrible disease, it manifests slowly, over time.

If IBB should be blamed at all, it is for his profligacy, and he is not the only one, all the past Nigerian leaders were, late Murtala Muhammed sort of repented by the time he became head of state, Buhari too must have repented, but the two did not stay for long.

It is the profligacy of successive governments, over a long period, that worsened the economy.

The problem with the present APC government is total insincerity.

There is this saying, ‘you can’t give what you don’t have.’

Governance is all about ‘poverty alleviation.’

The party got the moral support of Nigerians with its ‘change’ slogan and put itself in further trouble with yet another slogan, ‘change begins with me’.

It is becoming apparent that the party may not be able to ‘change’ anything in Nigeria to ‘positive’, rather the ‘change’ is for the worse.

And this is surprising should one compares the current performance of the APC with what Tinubu did as governor in Lagos state, the projects he couldn’t accomplish, his protégé, Babatunde Fashola implemented, ditto Akinwunmi Ambode.

Should the APC be working, it had the opportunity of creating at least between 10 million and 15 million jobs in its first two years in office, which it could then groom over the years.

10 to 15million jobs will translate to, at least, another 10 to 15million avenues for wealth creation; in the sense that an employed Nigerian has, at least, one person to support and nurture. Overall, about 20 to 30million Nigerians would be lifted above the poverty line.

Tinubu as Lagos state governor initiated many laudable ideas which led to job creation, to mention a few, Lagos State Transport Management Agency (LASTMA), LAGBUS, and the recent Lagos State Environmental Sanitation Corps (LAGESC) which emerged from the notorious the Kick Against Indiscipline Brigade.

These could be elevated to the federal level, the way IBB transformed the ‘Road Safety Corps’, which was first established in Oyo state by late Chief Bola Ige when he was governor of the state and organised by Prof. Wole Soyinka, whom IBB appointed, again, to reorganize at the federal level, the Federal Road Safety Corps (FRSC).

The scheme gave room for job creation, and the organization today is still understaffed like most other federal agencies.

The APC government should do the right thing which is, ‘take responsibility’ instead of passing the blame to previous governments; Obasanjo’s civilian administration did it excessively, Jonathan’s government also did it to a fault, now APC is doing it.

If APC is not careful, its own apology will far outweigh that of IBB, and its overall performance at the end of the day may not match IBB’s achievement.

Source cattnews

Posted 03/07/2017 7:28:13 PM




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