OPINION: Obaseki, Zainab Ahmed And The Politics Of Printing Money

April 16, 2021
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We may choose to dwell on the semantics; however, I advise we move to real thing. This week, Mr Godwin Obaseki, Edo State Governor fired an open salvo: the Federation printed N60billion naira to augment March 2021 federal allocation. 

Open salvo because anyone following economic development in Nigeria would have noticed that our Federation is simply impossible. It has been accurately howbeit derisively referred to as: Feeding Bottle Federalism where 36 States and 774 Local Government Councils invaded Abuja on a monthly basis to receive handouts from the godfather himself. In most saner climes of the world, it is the States that pay tax to the Federal Government for the maintenance of common interest such as defence, foreign affairs and the likes.

In Nigeria where the opposite reigns, the Federal Government is the feeders of the States and the Local Government Councils. It has been a poor feeding experience and financial kwashiorkor has been the lot of both the feeder and the fed.

As expected, the Mrs Zainab Ahmed, Finance Minister refuted Obaseki’s claim while Godwin Emefiele, CBN Governor tacitly defended the money printing saga by stating that the CBN, as lender of last resort can lend the government money by printing more naira! 

To anyone with a modicum of intelligence, printing money without tying same to revenue generation is like quenching thirst with a huge volume of air. It will simply cause hyperinflation as more money (going worthless) will be chasing fewer goods and services. One may sympathise with the CBN, the easiest thing to do would have been to devalue the Naira so that whatever revenue is there to share (earned in dollars) when converted to naira will simply increase thereby removing the need to print naira. 

But how do you defend a system that met naira at N230 in 2015 but has consistently and continually devalued the naira to its worst level at all time? The CBN could not defend devaluation and must have painfully agreed to printing more naira. Painfully because even the CBN knows the risk of having more naira chasing fewer goods and service. The risk of hyperinflation is surely more than that of devaluation. 

The trio of Ahmed, Emefiele and Obaseki therefore deserve our empathy and the nation itself is in a sorry state because we have simply refused to do the right thing. Most people opine that our problem is that of leadership. Experience has shown that both leadership and followership are the problem. 

Take for an example, in the March FAAC meeting, the States Commissioners of Finance refused to accept the figures of revenue generated and insisted that the Federal Government must find a way to augment the shortfall in the projected revenue. Let me explain: the Appropriation Act apportioned figures of revenue to be generated by certain government agencies such as NNPC, Customs and others. But projection is simply projection. The target may be met or exceeded or unmet. Where same is unmet, the States already burden with unrealistic wage are unwilling to accept such figures thereby forcing the Federal Government to look for money willy-nilly to meet the short fall.

Anyone conversant with the news would appreciate the lamentation of several States government on the huge wage bills that eat more than 93% of their revenue on monthly basis. This ugly reality has forced the Governor of Kaduna State to embark on right/downsizing its workforce. 

What then is the way out of this growing and gnawing logjam? Leadership and followership must find a meeting point; a synthesis between the thesis and the antithesis. If we seek the good and prosperity of Nigeria, then, we must take the following painful step and I dare say, urgently. 

Firstly, we must scrap the present 36 State structure and replace it with six (6) regions. Each region would have power to create the numbers of local governments it requires subject to the cost of maintaining its administration not more than 50% of its revenue.

Secondly, the Federal Government must reduce both its political and civil workforce. One way is to devolve more powers to the Regions so that we can have a mobile, effective and result-oriented Federal Civil Service. We really do not need more than sixteen (16) ministers and a single Press Secretary can do all that Femi Adesina, Garba Shehu, Onochie and several others are doing for Buhari. The same waste of talent and resources are replicated across the States and other government paraphernalia. 

If the above is done, much resources can be freed and our governors’ monthly headache will be removed. The present system promotes financial waste, same is duplicitous and left nothing meaningful for infrastructure development. Government must exist beyond and above payment of salaries.

It can therefore be seen that Obaseki’s salvo is a blessing to awoken in us again, the national discourse. Healthy national pursuits do not respect faith, prayers or fasting. It requires us to make the painful sacrifice today; be very willing to tinker with inherited structure so as to adapt same to meet developmental reality of the nation-state.

In the 90s, the clamour for State creation was loudest and the military governments responded by balkanisation of Nigeria in the name of state creation. How viable are the States? How viable are the LCDAs created in Lagos State? We have to stop the bleeding now. The longer we sustain this bleeding, the faster we head towards Venezuela and Zimbabwe experiences. Don’t say God forbid, do the right thing. 

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