President Muhammadu Buhari is reluctant to discontinue the payment of an economically debilitating fuel subsidy to importers, a practice he inherited from former President Goodluck Jonathan’s regime and which some analysts believe sets Nigeria back financially to the tune of at least a quarter of a trillion naira annually. Instead of relieving government (taxpayers?) of the burden of deploying such huge sum, which is a significant portion of the 2015 national budget of about N4.6trn, to conspicuous, avoidable and unbridled consumption as opposed to investing the scarce funds in badly needed infrastructure (electricity, roads, railway, hospitals, sea/airports and schools), the Buhari regime is poised to add on more financial burden of providing a meal a day for school children nationwide plus payment of the sum of N5,000 monthly stipend to the unemployed and aged Nigerians.
These welfarist/socialist initiatives catalogued above are some of the pledges that PMB and his party, APC, made to Nigerians during their electioneering campaigns and which they are determined to deliver, willy-nilly, and of which some Nigerians are cynical.
In the view of critics, the income to finance such costly initiatives are just not there, especially in light of the over 50 percent crash in the international price of oil which constitutes about 75 percent of Nigeria’s gross income. Their argument is hinged on the fact that it is the ballooning of fuel subsidy costs and the arbitrary and sudden increase in the salary of public servants under GEJ’s watch that brought the economy to the sorry state whereby a whopping 80 percent of the federal budget is allocated to recurrent expenditures with only a miserly 20 percent left for capital projects. This, in their opinion, is responsible for the dearth of infrastructure and stunted growth of Nigerian economy. Therefore, the idea of piling up subsidy-like free meals for school children and payment of stipends to the unemployed, a sort of social security, will further drag the economy down the path of recession.
Undaunted by sceptics, Buhari and his team have chosen not to be as pessimistic over dwindling income, so they do not share the sentiments that the nation’s current lean resources can’t sustain their quasi-socialist policies. Rather than being dispirited, Mr President and his team seem to have perfected strategies on how to plug the leakages that have characterized Nigeria’s financial management via introduction of new revenue leakage-plugging strategies, one of which is the Treasury Single Account, aimed at sealing the holes by consolidating all federal government revenues in the Central Bank’s vaults.
Hitherto, government revenues were spread across hundreds of bank accounts by over 600 ministries, departments and agencies (MDAs) of government (according to the Oronsaye committee on rationalization of government organs) in the 23 Deposit Money Banks in Nigeria and it is believed that such proliferation of accounts rendered government revenue susceptible to the risk of pilferage.
The other financially prudent measure aimed at optimizing the application of the revenue saved from the TSA operation through value-for-money contracts is the concept of Zero Based Budgeting, which is expected to offer better yield than the current Bureau of Public Procurement functions of scrutinizing contracts by MDAs before they are awarded. ZBB, which is also known as performance-based budgeting, is expected to, on implementation, secure for Nigeria the best value for every naira budgeted based on a thorough cost benefit analysis and prioritization of projects to be executed as opposed to spreading funds across several, sometimes frivolous, historical budget subheads.
Keep in mind that in addition to the policies earlier highlighted, at the inception of this administration, PMB had ordered the CBN and the Debt Management Office to grant soft loans and reschedule the debts of state governments that owed public/civil servants backlog of salaries – about N1 trillion in cash and bond – to lighten the financial burden on workers and reflate the states’ economies.
Given the foregoing initial policies and actions so far introduced, which have welfarist and, if you like, socialist colorations, it needs no emphasis that PMB is poised to run a government of the people, by the people and for the people, which is actually the primary and functional definition of democracy. Seen through the prism of Nigeria’s recent history of gluttony, the frugality of the current regime is tending towards socialism, but that is not sufficient enough to conclude that PMB’s government may have descended into socialism, as this is indeed a democratic government because the leadership was freely and transparently elected by Nigerians. However, because the regime’s policies have socialist trappings, it is undoubtedly tending towards democratic socialism. The nomenclature is derived from the fact that the current governance system in Nigeria appears to be a hybrid: harmonizing capitalism – a by-product of democracy that caters for the rich, side by side socialism, which is synonymous with the poor.
Put succinctly, democratic socialism, which a sideways look at the current PMB’s approach to leadership depicts, is actually not such a bad thing. In my view, PMB appears to be balancing between upholding the capitalist free market principles of democracy and at the same time operating the economy in a way that enables him to take the welfare of the masses into consideration. According to a recent New York Times article entitled “Guess Who Else Is A Socialist” by Timothy Egan, “Once you label something socialist, it brings to mind dour Soviet types trotting out dreary worker clothing for spring fashion line. Or, here at home, those sufferable parlor room Marxists who think it would be utopia if only we naturalized every Starbucks. In that sense, the worst thing about socialism is the socialist.”
The New York Times article was inspired by the recent U.S. Democratic Party presidential candidates’ TV debate, where Bernie Sanders, a front runner, is promoting socialist tenets and his message is resonating with many Americans hence, of all the five candidates, he is the only one giving Hillary Clinton, who is comfortably ahead of the pack, a bit of scare.
Magnus Onyibe
