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Buisiness - Markets - April 25, 2020

What govt wont tell you about recession 4

“The Federal Government had, in the budget proposal, revised downward the revenue projection for the 2020 fiscal period by N3.3trillion from the initial approved amount of N8.4 trillion to N5.08 trillion.” Punch, April 14, 2020, p 21.

If ever there is a government where the left hand does not know what the right hand is doing, then the Federal Government of Nigeria, FGN-2020 is it. If there is a government where the right leg walks in one direction and the left in the opposite, then meet FGN-2020.

The year 2020 has for long been associated with economic fantasy by FGN officials. This is the year Nigeria is supposed to be among the top twenty global economies. Fish generally rots from the head.

“Leadership is the ability to define issues without aggravating the problems.” – Warren Bennis, 1980. Vanguard Book of Quotations, VBQ, P 125.

Five closely-linked issues are involved in this column – expected revenue, debt repayment, Conditional Cash Transfer, capital expenditure and lockdown of Lagos, Ogun and FCT.

The best place to start is the Presidential address to the nation on Easter Monday during which President Mohammadu Buhari announced that one million households will be added to the 2.6 million claimed by the FGN-2020 as beneficiaries of its Conditional Cash Transfers, to bring the total to 3.6 million households.

First, we have the statement by the Minister for Humanitarian Affairs when she visited the National Assembly.

“As we know, the CCT (Conditional Cash Transfer) is for poor and vulnerable households in the country. Beneficiaries are entitled to N5,000 every month; however, the payment of N20,000 now to each beneficiary is for four months…. It is going to happen all over the country, but we are starting with FCT, Lagos and Ogun. These are the front line states. Others will follow…”  Minister of Humanitarian Affairs, Disaster Management, and Social Development, Daily Independent, April 2, 2020.

Even if it is true, that statement has revealed an FGN-2020 run by people more wasteful than the worst prodigal sons and daughters. It is inconceivable that any government worthy of being called one would be going about borrowing large sums of money only to give them away to totally idle people. Meanwhile, the nation’s power, education, health, infrastructure, manufacturing sectors remain under-funded. The sectors which will help repay the debts are incapacitated while more funds are about to be directed to shi*t hole called Conditional Cash Transfer – which was already immersed in corruption right from 2016. Nigerians must ask why there was no register up till now for cash transfers which they claimed started four years ago. Wayo game!.

Furthermore, increasing the intended beneficiaries from 2.6 million to 3.6 million households – even if we are not talking of ghost beneficiaries – merely scratches the surface. Supporting households comprising of four individuals takes care of only 10.4 million or 14.4 million poor people out of over 100 million now living in poverty.

The appeal by Buhari to Nigerians to cooperate with government cannot be expected to be heeded by the vast majority of neglected  poor. NTA might not televise the defiance of FGN-2020 even in the FCT and Alimoso local government area (LGA) in Lagos; but, we can see clearly on Channels TV what the masses think of Buhari’s appeal to stay home. He might as well not have spoken.

Unfortunately, that is not the end of the story on CCT. If indeed Lagos is a frontline state in the fight against COVID-19 and 2.6 million households nationwide are already in the register with all 774 Local Governments to be covered, it means 3,360 households per LG should now be benefiting. I live in Lagos Island and I challenge anybody in FGN-2020 to come and identify 200 households receiving CCT. When one million more households are added, then Lagos and each Southern state should be entitled to 4,650. You can bet it will not happen.

But, all the LGs of Katsina will be fully served. Already, we have watched on television as the CCT is being paid in the North, while they are just opening registers in the South.

Furthermore, the recent announcement by the FGN-2020 excluding people with N5000 in their account is another deliberate ploy to ensure that the disproportionate percentage of the fund ends up in the North. They have the almijiris; we don’t. Someone might have N5000 in their account and still be poor. That is part of the wayo game on the new CCT.

For several reasons too numerous to mention, it can be stated authoritatively that increasing the beneficiaries of CCT will not solve the problems; neither would it lift them out of poverty. Two reasons point to this conclusion. “What is worth doing, is worth doing well.” First, we start with the N5000 a month payment to “households”. One of the most distressing things for me writing these columns is the apparent absence of economists in the nation’s civil service at Federal and state levels. Invariably, the same basic lessons in Primary School arithmetic have to be taught to Presidents and their Ministers. It is a fact that at exchange rate of N300/US$1, N5000 fetches only $17 per month or 52 cents a day. That also means they will receive only 26 per cent of the US$2 required to lift them from poverty. But, today, the exchange rate is N380/US$1; they will receive a mere 21 per cent of what they need to escape poverty.

Obviously, the FGN-2020 either has a deficit of people who understand simple arithmetic or they are being deliberately deceptive.

This programme has once again become an avenue for corruption by officials of government and an excuse for allocating more funds to the North at the expense of the South. A recent report published in Punch newspaper on April 16, 2020, by an organisation called the International Centre for Investigative Reporting, claims that Katsina has the highest number of beneficiaries of CCT “with a total of 133,227…followed by Zamfara and Jigawa.” That is what every Southerner, including APC party members who have not lost their senses should note. What anybody in the South would find it impossible to explain are the following revelations:

1.      Lagos and Delta states ….had zero beneficiaries.

2.      Akwa Ibom, Cross River, Oyo, Osun, Edo, Bayelsa, Rivers, Abia, Anambra and Imo states –ten Southern states in all- have 121,000 beneficiaries or 12,000 less than Katsina alone.

3.      When Lagos and Delta with zero beneficiaries are added to the ten listed above, then, it means that 12 Southern states combined will receive less than President Buhari’s own state. The President who addressed all Nigerians asking for sacrifices runs a government which actively discriminates against Southerners. Nigerian democracy has become a “government of Katsina people, by Katsina leader and for Katsina people.”

”Liars ought to have good memories.”

When Hajia Farouq announced on April 1, 2020 that Lagos is a front line state which would be receiving CCT, we were sure it was an April Fool’s joke. But, the joke is on FGN-2020. Lagos is not listed to get anything  — at least not yet. We know that slashing revenue projections by 40%, increasing debt to revenue ratio to 48% and then increasing SIP allocations by 38 per cent are incompatible. The entire exercise demonstrates the lack of understanding which characterise FGN-2020. They talk first and think later – if at all.

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