Revitalizing the Nigerian economy: Beyond western dependence (v)

Kola Olaniyi

Olaniyi is a graduate of Electronic and Electrical Engineering, Obafemi Awolowo University, Ile Ife,  kellokelington@yahoo.com, 08068495313

5.0 VOLTE-FACE IN GOVERNMENT POLICY: THE KEY TO ECONOMIC TRANSFORMATION

Government holds the key to any transformation of her economy. In fact wise government amiably represented with a modicum of her citizens should make this its focal point in its day to day activities. Things have really changed. The whole world is replete of good leaders. They now go into extinction leaving behind leaders of double standard and double speak that talk the talk but do not walk the talk.They talk more but achieve less. They spend more to acquire little. They make new laws to break extant ones all in a bid to carefully navigate trouble waters or satisfy greedy and avaricious intentions. Even in the developed countries, America being a case study, it has now become obvious that the principle of populism & egalitarianism which were the functional building block of her formidable economic empire are skilfully exchanged for individualism and lassie faire. Little wonder such departure from the requisite acts created a deep mark of schism between the rich and the poor. Nigeria is not spared of this malady only that it has never attained/built herself an economic edifice going by her size and resource.The propensity of her potential greatness is clearly visible but her attainment is impossible owing to her flip flop policy bereft of methodical thoughts and logical solutions. It’s not about making plenty of promises; for your ability to deliver those promises is premised on the policies you embark on whether for more economic servitude or transformation.The present crops of leader to speed up these transformations are way too unready for this patriotic duty. What judgement have you on the slap-on- the-wrist punishment melted out to financial houses who decided to pull down the mortgage business all in the name of securitization in America by her present administration? it all boils down to careful navigation so that more money will flow and keep flowing for campaign and electioneering for more perpetration in office to enjoy the paraphernalia of office. For economic transformation, there must be a quick segue from what obtains before to what is to be which should then must be logically pursued. For Nigeria a country i cherish and love so much, the first pragmatic step i presume should take place is to be disillusioned that western financial policies of privatization foisted on the country will better her lot. Without prejudice to the western world i do not blame them when they logically convey their reason for this bold assertion. They continually posit that waste, rot, bureaucracy and mismanagement exist in governmental institutions and because of such should be shifted and controlled by private hands ardent on be profit maximization, management and quick decision making.That would be true in few instances,not in all circumstances. Recall that financial/Wall Street collapse of 2008/09 made clear that private investors might be reckless in appropriation of financial resources dangling with the fortunes of people’s money and not the bank/mortgages money. In privatization/deregulation so to speak, the policies guiding them are skewed in favour for the elite and perpetual stagnation the humble.

Brian Browne in his plausible postulation posited that unlike a river that flows from its

Source, money always flows to its source. Little wonder that foreign investors have

made a killing out of the Nigeria economy with continuous exploitation of the masses.Wealth and assets would not move to the poor rather the little the poor has would go to where more money is. It’s thereby appropriate to disillusion and enlighten government that privatization would further and improvise and deepen the economic division of the rich and the poor citizen in their economy.

5.1 Lord Keynes Fiscal Recommendations

The world over government is concerned about unemployment and employability. It means in simple terms that its active labour force has not been fully utilized for

productive venture. A high unemployment rate is a casus célèbre for a good government in quest for economic transmission and because of that mechanisms are put in place for

the curtailment of this bug-bear.

The last section epitomizes the ineptitude of government in handling this problem. She continually posits that FDI, increased production/exploration of oil will stem the worrisome tide of unemployment. She is also quick to show statistical evidence of the GDP growth as a corroboration of her claim of economic development. This section recommends an effective fiscal policy implementation of lord Keynes theories as a sine qua non for progressive reduction which then put in good perspective, an increase in a certain sector of the economy does not actually transmogrify to economic development rather the effective fiscal policy recommend by lord

Keynes, that brings the much needed/anticipated growth.

Keynes postulations are that;

• The appropriate fiscal policy during period of high unemployment was to run a budget deficit even though the conventional wisdom is that deficit budgets were always bad.
• Policy that directly targets the labour demand gap (opposed to the output gap) is far more effective in stabilizing employment, incomes, investment and balance sheets.
•  unemployment problem can be solved speedily and directly by one primary method which is direct job creation through public works

In all the above postulations, one thing worthy of note is that unemployment can be brought down to a minimal level with governmental spending on public works/industrialization.This position can be attained by the government running huge budget deficits.Nigeria incurred debt   through high recurrent expenditures. This goes at cross purposes with Keynes theory. Little wonder that unemployment rate continually goes up without any sign of coming down. Fiscal policy of government should directly target unemployment through public works.Hence there is the need for a change of thoughts from stimulating GDP growth as a panacea for economic growth. (Okun, 1962) himself cautioned that GDP-to-unemployment relationship is rather weak as a three per cent (3%) growth in actual GDP brings about only a one per cent (1%) reduction in unemployment. Hence effective fiscal policy through works (that is channelling government spending to infrastructural dearth) will reduce the rate of unemployment.