Policy Briefs

Recession: wayward consequences of good intentions

By Oseloka H. Obaze —

Good governance requires dexterity in political pointillism – connecting the dots between purposeful leadership and service delivery.  Just as it is axiomatic that the road to hell is paved with good intentions; so too, is the road to economic recession paved with good intentions.  Painfully, Nigerians now know that promises premised on good intentions can have wayward consequences. Though oxymoronic, the notion of good intentions gone bad has assumed increasing validity in Nigeria.  Nigeria being an outlier means that dealing with it as a normal nation becomes consequential and a huge mistake.

Political promises and decisions tend to induce public trust. Yet, a promise undelivered is no promise at all. And good intentions espoused, but not concretized, remain a fluke with immense undermining capacity.  As such, any unfocused leadership will falter, regardless of its abiding expression of good intentions. When that faltering happens, vexation, agitation and ennui are natural responses, as is now the case in Nigeria.

It’s gratifying that Nigerian policymakers have been tasked to think outside the box. They must with good intention, come up with plausible policies that take into account competing priorities and fiscal constraints. Yet, good intention will not always amount to good policies.  Extant policies and economic realities attest to this fact. Ironically, thinking outside the box may have translated to recent calls to sell off some of the nation’s oil assets. With external reserves plummeting to $24.8 billion in mid-September, government hopes to sell off some assets to support recurrent expenses and bridge revenue gaps in the N6.06 trillion 2016 deficit-laden budget. How can this be of benefit to Nigeria?

The first good intention mistake was to adopt a deficit-based budget instead of a zero-based budget. But then “change” had to be financed. At the current weak exchange rate, such oil assets will yield some $13 billion if sold, an amount slightly less than what the same assets will yield in revenue over a four-year period. Record shows that previously privatized assets did not yield desirable returns.  As National Council on Privatization disclosed, “only 10 out of the 400 companies privatized so far were assessed to be on relative sound footing.” In plain language: government assets sellers, sell to their cohorts or to themselves via fronts and then cream off the accruing dividends. It’s not farfetched, even with good intentions, that any oil assets if sold now, will likely follow that same pattern. For Nigerians that’s losing proposition!

An overview is worthwhile. Good intentions led to the establishment of Niger Delta Development Commission (NDDC) sixteen years ago. Since then, the Commission has gulped up N40 billion, with nothing concrete to show in development returns.  Presently, the NDDC has a contingent liability of N1.3 trillion.  It is owed some N500 billion by its funding partners.  NDDC is indebted to about 8,000 contractors.  Good intention may compel President Muhammadu Buhari to pump in more funds to stabilize the Commission; but the critical policy decision rests in appointing a focused management team dedicated to turning the region around through faithful mandate implementation, as he has done with Senator Victor Ndoma-Egba and Mr. Nsima Ekere.  The duo must run NDDC efficaciously.

With good intentions, the Buhari government spent some N6 trillion between 2015 and 2016 on public interest policies and projects. It bailed out cash-strapped and heavily indebted states- but hardly addressed risky and runaway state borrowings. The return on that huge investment is a debilitating recession.  With good intention and to check corruption, the Federal Government introduced the Single Treasury Account (TSA), which not only mopped up liquidity, but created a cash crunch that stymied spending. Relatedly, Nigerian government with good intention, supported the deregulated aviation sector, yet fell short of creating the enabling environment required for Aero Contractors to survive. Now government is talking, presumably with good intentions, about helping Aero Contractor refloat.

Apropos Nigeria’s depressed economy, and in the context of “change”, the immortal words of President Richard Nixon during his second inauguration on 20 January, 1973, is worth recalling. “Today I offer no promise of a purely governmental solution for every problem. We have lived too long with that false promise. In trusting too much in government, we have asked of it more than it can deliver. This leads only to inflated expectations, to reduced individual effort, and to a disappointment and frustration that erode confidence both in what government can do and in what people can do. Government must learn to take less from people so that people can do more for themselves.”  These words are instructive in the context of everyday governance and the persisting calls for restructuring Nigeria.

Opposition politics in Nigeria remains starkly partisan and oftentimes, unnecessarily virulent. History shows that politics in Nigeria transcend the realm of competing interests; self-centeredness remains prevalent and most times, predominate. Also, hyper-partisanship and ethnicity, gets thrown in for good measure, even as we publicly disavow them. Inevitably, it’s these values that compel politicians to make promises and express good intentions they never intend to honour.  The upshot is that government policies and projects fail when driven by transactions instead of public interest considerations. As I have averred elsewhere, “transactions becomes in the end, the ultimate factor that compels the articulation and execution of policy.”

Moreover, absence of political ideology and party discipline compounds the challenge.  Indeed, it is a fallacy to believe that positive electoral outcomes derive from praying for good leaders to emerge. The correct route is voting in such leaders or voting out the pretenders.  Awkwardly, politicians tend to be clever by half. They seek electorate support regardless of whether they delivered on their prior promises or not. This brings me to the core topic of change, by any other name.

Desirable change is presumably positive. But undefined, a promised change can be negative.  As several Nigerian States queue up for gubernatorial elections, what form of change can the people envisage?  In several States, incumbent governors are pursuing succession plans or second tenure. Hope waxes strong in both instances, as does campaigns promises and expression of good intentions.  But such promises are ever hardly commensurate with dividends delivered. Were elections a strict science, the electorates in States with upcoming elections should be evaluating unfulfilled promises, past patterns, precedents and similarities.  They should be undertaking comparative analyses and asking; despite the avowed good intentions, if such dismal governance performance could happen in other states, why won’t the same or worse happen to us?

More likely than not, bad leaders rather than good leaders are thrown up by our warped political system.  Atiku Abubakar rightly characterized such as “accidental leadership”. Whereas bad leaders are supposedly an aberration in a democracy, in Nigeria they are becoming the norm at all levels.  Such leaders govern with near impunity and lack of foresight; muzzling the opposition and alienating the electorate. Such leaders fail to consider their mandate as a sacred trust; rather they see their emergence as divine manifestation and thus seek renewed mandates even when clearly underperforming.

Chastising elected Nigerian officials has become awfully tedious. It’s almost impossible to remove failed elected officials. Since intense partisanship tend to render bi-partisanship arduous, politicians and constituents alike, routinely play the “People go along to get along” game.  Such disposition conveys good nature, good intention and in local political jargon; “politics without bitterness”. So going against the grain is considered anti-party. In reality, however, electorates that acquiesce to bad leadership only mortgage their developmental prospects. Though Wayne Dyer suggests that “our intention creates our realities”, bad decisions made with good intentions, remain exactly what they are — bad decisions.  And this has been the bane of public policymaking efforts at the local, state and federal levels.   What Nigeria political leaders, often overlook, and conveniently so, is that “History is a better guide than good intentions.” If not, how come Nigerians continue to repeat the same governance mistakes?

In seeking to extricate Nigeria from the present recession, we must remember that the good intention of bailing out indebted states, only spurred some States into deeper fiscal profligacy. The consequences — an irrefutable recession – are certainly wayward.  Our parlous economy continues to elicit frustrations and erode confidence in government. Hence efforts at ending the recession must go beyond make-believe policies. Offsetting bogus federal and state debts or servicing the 2016 budget with the sale of long-term revenue-yielding-assets, will result in Nigeria being trapped in a debt peonage and sustained national assets deficit. The fast track exit from this recession is simply “spend and cut”; we must offer people more money to spend, while cutting the cost of running government.

Confidence is eroded when leadership performance is sub-par and government fails.  In such instances, the people must retake or withhold their mandate. Not doing so, only postpones the inevitable — enduring bad governance and suffering.  Consequently, our leaders must, opt for governance pointillism, which connects the policy-dividend-delivery dots and result in good governance.


Obaze is MD/CEO of Selonnes Consult Ltd.


Oseloka Obaze, MD & CEO

Oseloka Obaze, MD & CEO

Mr. Obaze is the former Secretary to the State Government of Anambra State, Nigeria from 2012 to 2015 - MD & CEO, Oseloka H. Obaze. Mr. Obaze also served as a former United Nations official, from 1991-2012, and as a former member of the Nigerian Diplomatic Service, from 1982-1991.

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