Crises force on us extremely hard decisions. And often victims are left feeling hard done by these. But good government is about acting always in the best interests of the citizenry. Waiting until policy options are whittled down to either or options is an unbelievably bad way to run government.


How does one make sense of the fact that just when the burden of rising domestic prices was starting to hurt, the federal government embarks on a portfolio of price reforms that can only compound the matter? The pass through to general prices from increases in the pump-gate price of petrol and electricity is a direct one ― these are the main sources of energy for the economy, powering business activity across sectors. Add the slithering devaluation of the naira over the past few months to street tales of how dependent we are on imports, and the emerging picture is worrying, indeed. Especially giving the background of rising unemployment ― a trend that was well underway long before the COVID-19 pandemic put a look in.

Understandably, many commentators on the economy have criticised the timing of these reforms. In this reading, it requires inhumane levels of insensitivity for anyone to lump these price increases together. But a different order of sensitivity would indicate how with its back to the wall our government is on this matter. Despite much promise, the reform plate of the Buhari administration is thin. Midway into its second term, we are still as dependent on oil exports for the bulk of our foreign exchange receipts as we have been at any time in the last 60 years. Much of government spending remains as inflationary as it has always been ― seeing as the larger portion goes to paying salaries and meeting overheads.

One could argue that with two-thirds of domestic output (by expenditure) accounted for by consumer spending that large contingent of civil servants can not be an altogether lousy experience. But that is if the resulting slack by government in investment in the new capacity needed to keep the economy ticking were taken up by the private sector. But more than any of the governments we’ve had since 1985, the incumbent administration’s guttural loathing of the private sector is uncommon. Not just has it done little to boost private sector supply responses, including through reforming the public sector expenditure management framework, it has gone on a borrowing binge, which it chooses to explain in terms of the domestic economy’s crying need for investment in infrastructure.

These lenders insist that to lend money to an economy in the habit of spending hand over fist as gleefully as Nigeria does is to forsake all chances of repayment ab initio. Besides, the reform they are insisting on, by ensuring that users pay for the services they consume ought to help discipline domestic consumption.


There are those who still argue that a far better response to the economy’s infrastructure challenge would have had government de-risk the affected sectors as a prelude to attracting private sector investments. This did not happen. Instead, the public sector’s borrowing has ballooned just as its capacity to meet its sundry obligations have shrunk. Then along came COVID-19 and its demand-dampening effect on the global economy. Inevitably, we are back, cap-in-hand, knocking at the doors of bilateral funding agencies hoping to source the bridging loans that should tide us through this difficult period.

These lenders insist that to lend money to an economy in the habit of spending hand over fist as gleefully as Nigeria does is to forsake all chances of repayment ab initio. Besides, the reform they are insisting on, by ensuring that users pay for the services they consume ought to help discipline domestic consumption. Apart from improving the chances that the loans will be repaid, according to the terms of the loan agreement. Alas, nothing in economics is as cut and dried. Yet, when large portions of the left in the country scream blue murder at these reforms, they miss several tricks. Take the nation’s management of the naira’s exchange rate. At the hint of a possible devaluation, the poor and their interests are marched out as the main losers from such policy.

The biggest loss, though, is to the economy. Billions of scarce United States dollars spent to support different prices for the naira – for imports; for holidays and travel; for school fees ― is money that is simply no longer available for development. These activities enjoy access to subsidised dollars. Not just do the poor not have access to any of them, but companies that access their letters of credit from the central bank at subsidised exchange rates go on to invoice their goods at the black market rate. And it is this later rate that the poor are familiar with. What does it take for us to ask which is the best use of scarce resources: spending on development or on zany schemes?

The fact that our subsidy programmes are simply fiscal transfers to the middle class and other classes above it has been most emphatically illustrated in the evidence of corruption in the management of fuel subsidies. Yet, our left-wing activists still turn to the interest of the poor in their opposition to market-determined prices.


The fact that our subsidy programmes are simply fiscal transfers to the middle class and other classes above it has been most emphatically illustrated in the evidence of corruption in the management of fuel subsidies. Yet, our left-wing activists still turn to the interest of the poor in their opposition to market-determined prices. Doubtless, the poor will see stinging increases as transport and food prices go up on the back of the current reform effort. And because these expenditure items make up a large portion of their monthly spend, the incidence will weigh heavily. But the greater loss is to the subsidy mafia and the two-car families that make up our upper middle class.

Just as the biggest gain is to government. An opportunity, then, to reform how government spends its money ― especially by automating those places where its activities touch the citizens? Without argument. Digital interfaces, by linking voters card details with citizens’ bank verification numbers, and national identification numbers, will not only make elections more transparent, it will make the management of conditional cash transfers to the poor and vulnerable that much easier. All reforms that the Buhari administration had suggested were possible while it was on the hustings, but all of which it promptly went to bed on as soon as the elections were called.

Crises force on us extremely hard decisions. And often victims are left feeling hard done by these. But good government is about acting always in the best interests of the citizenry. Waiting until policy options are whittled down to either or options is an unbelievably bad way to run government.

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