It has been long since I wrote and events have occurred both in Nigeria, Africa and the rest of the world. APC has been registered by INEC, people sent home from lagos, Samsung has become the number one selling mobile smart phone in the world, Zimbabwe, has conducted elections alongside Mali and bomb blasts everywhere, especially in Kano, killing southerners, majority of them Igbo’s.
But I’d like to know what the role of government is in governing her people. While watching a program on Channels TV on saturday, an economist I hold much respect for, Mr Henry Boyo, who was a guest on the show, made it clear that the interests rate being given by the CBN is not good for business men and women and the Nigerian economy. It was also stated that the fiscal policy of government is not in tandem or unity with the monetary policy being offered by the CBN.
Let me explain, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. Fiscal policy refers to the use of the government budget to influence economic activity. While, Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment.
Monetary policy differs from fiscal policy, which refers to taxation, government spending, and associated borrowing. Monetary policy rests on the relationship
between the rates of interest in an economy, that is, the price at which money can be borrowed, and the total supply of money.
The organization that is entitled in controlling the flow of money in the country, the Central Bank of Nigeria or CBN, has an exorbitant interest rate that does not help the Nigerian economy. It ranges from 13 to 25%. The fiscal policy of the Nigerian government does not agree with the monetary policy of the CBN. The federal government spends more money on re-current expenditure in it’s yearly national budget, than it does in it’s capital expenditure. The re-current expenditure is used to pay the arrears of government workers and the needs of the government or people in power. Majority of that money goes to the National Assembly and it’s members and the executive arm of government, the presidency itself.
Even though the FG quotes billions of dollars in the capital expenditure (money used in building infrastructures), we are yet to see the impact in Nigeria. The so-called transformation agenda of the FG is taking to long to occur. It’s privatization program is something I am yet to understand. How can you use your money to help someone who says he can provide solutions to your problems? That individual needs to use his money to do the job and then people would pay him in return. The PHCN is an example of governments wasteful attitude. They have spent money building independent power projects with no gas pipelines being linked to these power stations. In June, a BBC commentator made fun of our government on this issue. She found it quite laughable. And the man who started this foolishness of building gas power stations without having pipelines linked to them, would appear in the same news channel, talking about our problems and offering solutions to them and when he was president he didn’t achieve anything (Olusegun Obasasnjo).
The CBN, which controls the flow of money in government, hands over this money to government, and allows them to spend it as the like. Majority of governments money is put in banks who borrow it back to government at 13% or more to them. Most of the Nigerian Banks today can not survive without the FG’s money. Nigerian business men and women who need loans, especially long term loans, can’t get them because the high interest rates discourage them. The banks give short term loans with strict conditions. They don’t even get involved in equity investments, which would encourage these businesses.
We know how substandard government projects are. They use one-third of the money to carry them out and put two-third of the money in their local and foreign accounts. I totally support privatization and believe it would help in reducing government’s reckless spending. One way of stopping this is by ensuring that government doesn’t award contracts and should privatize all it’s capital projects. Government’s major role or sole responsibility is to secure the rights and
freedoms of it’s individual citizens and also to ensure good governance, to maintain the rule of law, to protect the less privileged in society and those in the minority and not getting involved in business. Government has no business being in business. It is because of this involvement in business, that we have a high level of corruption in our country today.
Privatization is the key. Since the privatization of the telecommunications industry, at least the number of people who have access to these industry has increased since NITEL was the major player. If we privatize other industries, and reduce the involvement of government, then more people would have more access, enjoy better services and unemployment in Nigeria would reduce drastically. Government would then make it’s money by placing taxes were approachable. Even the construction of roads, railways, airports and sea ports should be privatized and government should generate their money by placing taxes too. It would reduce the number of people working for government and then government would then concentrate it’s resources in recruiting people in services like security and utility services that we badly need.
I still repeat and maintain what I earlier said, GOVERNMENT HAS NO BUSINESS BEING IN BUSINESS, it’s role is to secure the rights and freedoms of it’s individual citizens, provide good governance by ensuring the rule of law is maintained in the society, protect the less privileged and those in the minority and consumers who use the products and services of product and service providers. They should make no room for exploiters to take advantage of the people they govern. Can we say that of the Nigerian government? Definitely no!!!
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