Numbers from the economy regularly strengthen the general sense of unease over the nation’s lack of traction. Only last week, the papers were full of news to the effect that the public sector debt is rising, and that the federal government may have a less than toward relationship with the stabilisation fund. Whether or not this is true (incidentally, much of the fuss is coming from the national legislature, a body dominated at present by the ruling party), stronger pointers are present of why we ought to be more concerned about the trajectory of the Nigerian state. Official bean counters are in no doubt that in absolute and relative terms, the incidence of poverty is trending up. Unemployment is up. Inflation is up. And lately, the telcos have taken to offering 20% discounts on their recharge cards. Misery can only be headed in one direction on the readings from this dashboard.
Of course, it isn’t news any more that Nigerians are getting poorer. Nor that this immiseration, though widespread, is not general. With more Nigerians making it into the Forbes list for the incredulously rich, we should be looking at one other measure of interest: income inequality. Although useful data is hard to come by, there is no question, but that the richest 5% of Nigerians now account for a very large and growing share of the national income. So, when most of us worry that the evidence for an economy where output has grown on a yearly basis by an average of 7% is hard to find, it is evidently because we are looking in the wrong places. In those places in which we look, though, the statistics tell only a part of the story. Experience from other climes seem to suggest that we may be incubating eggs of potentially disruptive social strife
However, before barking up the policy tree. Arguing in effect that government must seek out and implement policy options that conduce to better distribution of the gains of economic growth, we ought first to look in on some stops along the way. Over the twelve months to end-December 2011, the Debt Management Office (DMO) estimates that our external debt rose by US$1.2 billion (or 26.67%) from US$4.5 billion to US$5.7 billion. Since end-December 2009, the debt has risen by US$1.8 billion. In other words, the margin by which our external debt is growing has doubled every year. Unattended to, our external debt may thus add another US$2.4 billion this year.
Cause for worry? Yes! No less distinguished a body than the House of Representatives was thus minded last week to demand that the president implement the provisions of Section 42 of the Fiscal Responsibility Act 2007 (FRA, 2007). Now, there’s been so much to-do over how reforms to the public sector have been complicit in the higher growth rates reached by the economy since 2003. Along with the due process mechanism, the FRA, 2007 is the poster child of these reforms. Yearly it has been the federal government’s wont to remind us that it managed to maintain the primary deficit in the preceding year at a little under 3% of GDP- only because the Fiscal Responsibility Act requires this evidence of prudence. Why, then, you ask, has this government thumbed its nose at a provision of the act requiring it to set overall limits for governments’ consolidated debt subject to the National Assembly’s assent?
Against the charge, again revealed only last week by the House of Representatives, that the Federal Government has been helping itself to monies salted away in the Stabilisation Account (indeed that it may have withdrawn N114 billion from this source over the last eight months alone), all these numbers just get scarier. Remember only, first, that the stabilisation fund is meant to help tide government finances over in the event that global oil prices drop below the current budget’s benchmark for oil receipts; and second that Bonny Light, our premium blend has sold for more than US$120 per barrel over this period, i.e. US$50pb more than the budget benchmark.
Now, tote the numbers: massive government spend on one hand; and rising poverty on the other. In the absence of compensating investment in upgrades to the nation’s stock of capital, or in building new stock, what do you get? An inefficient and/or inept government? Or a cross-starred one?