Between economic diversification and emergency powers

Diversification is the word around which all things revolve these days. Every past government had come with its preferred cliché and once the word is launched into the political lexicon, every lips start confessing it with torrential effects.

The incumbent government launched the word diversification into the horizon immediately it took over in 2015. Its logic was that the country was looted dry by previous governments which failed to save for the rainy day.

By the way, when a government says previous leaders didn’t save for the rainy day. I don’t seem to understand. I think the best governments invest for the rainy day. Just as we have seen many Gulf

States invest heavily in landmark properties in Europe and America and then leverage on the proceeds of those investments for development of their countries. Any government that stuffs its vaults with money for the rainy day will only found itself in what I call the Obasanjo ensemble.

Nigeria’s former President Olusegun Obasanjo left office in May 2007. At the time he left a total of $65 billion both as Foreign Reserves and in the Excess Crude Account (ECA) in the vaults. That was he had

paid $18 billion of the nation’s $30 billion foreign debts and secured $12 billion write off.

The late President Umaru Yar’Adua took over in 2007 and ran into bad economic weather. Militancy in the Niger Delta brought crude oil production to all time low of about 700,000 barrels per day, even as the price went downwards. The easy way out was for the government to stabilise itself by dipping hands into the vaults.  That continued till Dr Goodluck Jonathan took over and then oil market stabilised.

Even at that, much of the gains went down the line with bourgeoning fuel subsidy costs that gulped averagely N1.5 trillion yearly. Today, we are back to the point where panic economic buttons are being pressed every second because the nation had eaten its tomorrow yesterday.

You can imagine if Obasanjo had invested all of the $18 billion and part of the $65 billion left in ECA and Foreign reserves in some high yielding global investments. Imagine that we had secured debts negotiations that would enable us pay our debts from the proceeds of those investments. Today, we should have a more buoyant economy. Since we are told that the standard practice is for countries to have funds capable of financing three months imports in foreign reserves, why keep all of $65 billion in the vaults.

Now that we are back to the panic economic measures, diversification has become the watchword. Added to that, last week, the presidency hinted at a plan to seek emergency powers for the president to secure a quick fix for the economy.

With the naira exchanging 410 to the one US dollar at the parallel market, it is obvious the president needs emergency powers. He will indeed need all the powers he could muster to drag down this exchange rate crisis.

With crude oil price stuttering by the day and that persistently downgrading the nation’s foreign exchange earnings, the president will need all the emergency powers he could get to stabilise the situation. And rightly said, diversification is key.

But what manner of diversification are we talking about? In the last one year, you have heard that word repeated by every minister and government operative. You have seen that the word is already the refrain of the moment. The question however remains how much of diversification have we seen? How much foundation for diversification of the economy can we identify through the process of 2016 budget and what are the prospects of the steps yielding fruits?

The truth is that diversification does not entail preparing scientists to go into the moon.  The way forward is actually far easier than that.  Many government operatives have repeatedly told us that agriculture can lead our country out of the woods.  Tell me how much effort has the government put into ensuring that Agriculture brings the desired benefits. This government inherited a fertilizer distribution system that ensured that the product got to the farmers. I heard that has been jettisoned and today farmers are at the mercy of profiteers and middlemen. How will that encourage food security? We know that land for farming is a major issue in this country, how many states have acquired lands for distribution to willing farmers?

Machines are a major component of agricultural revolution, how many state governments have offered that plus improved seedlings and the like? We have heard that only three percent of American population is involved in agriculture and yet that country produces excess that feeds its over 300 million people and the world. They key is just clear headedness.  It is not about sloganeering.

We have heard that our country’s potentialities in solid minerals rival any country of the world and that we have all manners of solid minerals that can fetch us billions. But have you seen the determination to redress our lackadaisical treatment of that sector through the current budget which was prepared in the heat of economic anomie?

We have seen examples of countries involved in mining across the world and on the touch of the button, we can identify the companies behind the operations. Have we taken any effort to lure such companies to our shores with tax holidays?  What really are we doing to improve this sector among others? I am sure that beyond the sloganeering around the said emergency powers, simple but practical steps in the critical sectors will help us out.