About 40 years ago, Gen. Yakubu Gowon famously said something about
Nigeria’s problem not being money, “but how to spend it”. He uttered
those words at a time when the surging price of oil was multiplying
federal income faster than sensible spending could catch up with it. (For
some context, Nigeria’s oil revenues more than quadrupled in the eight
months between September 1973 and May 1974).
Those words have haunted
Gowon his entire life, but that’s a story for another day. Even though
today’s circumstances are very different, I think Gowon’s words are as
apt today as they were back then.
Nigeria’s problem is not and has never been a lack of money, but instead
a lack of sensibleness regarding spending what’s available to us.
I’m fully convinced that the new government can find all of the money it
requires to fulfil much of its infrastructure ambitions – but only if it
curbs the greediest manifestations of bureaucratic and political
appetite, and prioritises big-impact spending.
Between plugging leakages in public finances (Treasury Single Account),
and expanding the tax net (Federal Inland Revenue Service), and toning
down on the indiscriminate award of import and tax waivers, it is
possible to swell the federal coffers. Other options include selling
stakes in the Joint Ventures of the oil and gas industry, bringing
transparency to the administration of mining licences, raising the
Diaspora bonds, and resolving the fuel subsidy conundrum.
With a little bit of imagination, we will quickly realise that Nigeria’s
biggest problem at this time is not so much having to deal with $40 oil
as much as carrying on with a $100 oil mentality – one that allows us
focus disproportionately on oil and gas, and that allows the sort of
wastage that may be permissible in an oil boom, but definitely suicidal
in a bust.
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