…the Fund prescribes medication for the same ills that successive governments have pledged themselves to fix over the last five decades. The danger in the Fund’s baseline outlook for the economy, is that as advanced economies continue to grow, and their central banks begin the normalisation of monetary policy, external financing conditions will be less supportive…


The release, last week, by the International Monetary Fund (IMF) of its 2018 Article IV Consultation report on the country reignited the debate about how effective the Buhari administration has been in its husbandry of the economy. And it did so by restating the fairly obvious.

The economy may, late last year, have emerged from its deepest recession ever; but none of the recovery in domestic output growth in 2017 was the result of anything the Buhari government did. Higher oil prices, and benign global financing conditions simply lifted our boat — more oil export revenue boosted government spend; cheaper financing allowed government borrowing to soar, and the central bank to mend its reserves; and a steady flow of non-resident portfolio investments supported the money markets.

The leaks that have plagued this boat since the mid-1970s remain. And, according to the Fund, those things that managers of the economy need to pay attention to if the boat is not to sink again include: (1) “Promoting a growth-friendly fiscal policy centred on stronger efforts to increase nonoil revenue mobilisation, prioritised capital spending, sound debt management, and a well-targeted and scaled-up social safety net; (2) Keeping monetary policy tight to contain inflation, based on transparent monetary policy tools, and discontinuation of quasi-fiscal activities; (3) Removing distortions in the foreign exchange market, which should be unified and contribute to strengthening reserve buffers; (4) Enhancing banking sector resilience through a proper assessment of asset quality, strengthened capital buffers, and phasing out regulatory forbearance; (5) Implementing structural reforms by building on recent successes to improve the business environment, accelerating the power sector reform, strengthening governance, and updating the financial inclusion and gender strategies.”

Supporters of the Buhari administration will be quick to point out that none of these worries are new. And, indeed, they would be right. But therein lies the crux of this latest comment on the economy. Despite the loud protestations from the many ministers in the current cabinet, nothing has changed about the economy’s problem universe…


In essence, the Fund prescribes medication for the same ills that successive governments have pledged themselves to fix over the last five decades. The danger in the Fund’s baseline outlook for the economy, is that as advanced economies continue to grow, and their central banks begin the normalisation of monetary policy, external financing conditions will be less supportive of the economy. The main vulnerabilities here include threats from higher debt service charges, and from the tapering of non-resident inflows of capital into our money markets. Add both the likelihood of the bottom falling out of the global crude oil market, and the escalating concern over internal security, and you get a sense of how fragile the economy’s current recovery is.

Supporters of the Buhari administration will be quick to point out that none of these worries are new. And, indeed, they would be right. But therein lies the crux of this latest comment on the economy. Despite the loud protestations from the many ministers in the current cabinet, nothing has changed about the economy’s problem universe, nor in the design of policy responses. If anything at all, the unusual lag in the Buhari administration’s policy response function has only worsened the policy space.

What is to be done, then? Often, our different levels of government still think as if they are part of a colonial structure, where the question is: “How much can we extract from this place (and repatriate to the mother land)?” And where the answers are invariably structured like the Lagos State government’s most recent policy move — to raise taxes on economic activity. If the IMF is right in arguing that our central challenge is to increase “private sector supply responses”, then, rather than levy restraints on trade (and commerce) within the economy, it would make sense for governments to move the economy on to a market-based platform. Making this same point in a different context, The Economist newspaper argues that “…draconian policies to expand tax collection often hamper the very growth that brings it about.”

Of course, context matters in all of this. Much lower performance bars would mean that in appraising how far we are along the road to development, and how far we’ve still got to go, we may be wont to freely dispense plaudits to whichever administration oversees our spaces.


At the federal level, any meaningful re-orientation of policy direction would mean abandoning the appetite for borrowing, in favour of policies that drive private sector direct investment in the economy. This, of course, would mean removing the element of fiat from policy making and implementation, and allowing the price mechanism to allocate resources, including for the prices of foreign exchange and petrol, rice, and cement, etc. At the state and local government levels, more transparent public expenditure management frameworks would matter in the design of policies that encourage economic growth.

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Across the three tiers of government, technology offers the prospect of improving citizen’s interfaces with government — improving process efficiency, while lowering costs. But, invariably, technology solutions, at the federal and state levels (local governments barely exist in this regard) have been forced to mimic existing bureaucracies — warts and all. So, despite being able to process the drivers licence online, we are still required to head off to different offices of the Federal Road Safety Corps, where bureaucratic hurdles (especially the need to renew the stamp on the temporary licence) proliferate. That said, India’s biometric national IDs (Aadhaar), the linking of these to bank accounts, and the combination of both in the payment of conditional cash transfers to the poor and the vulnerable is one example of how we could get technology to work at, and for the different levels of government.

Of course, context matters in all of this. Much lower performance bars would mean that in appraising how far we are along the road to development, and how far we’ve still got to go, we may be wont to freely dispense plaudits to whichever administration oversees our spaces. Whereas slightly higher expectations would see such administrations score miserably, qualifying to be voted out in the next election cycle.

Uddin Ifeanyi, journalist manqué and retired civil servant, can be reached @IfeanyiUddin.