Pr ofessor Pat Utomi is a communication expert and political economist with profound insight into Nigeria’s political and economic landscape. The former presidential candidate of Social Democratic Mega Party is one Nigerian whose cerebral contributions to contemporary Nigerian situation compel attention. In this interview with Saturday Vanguard following government’s plans for austerity measures to save the country , Utomi offers insight into the mismanagement of the country’s economy and the huge cost of managing political actors and bureaucrats in the country.
excerpts. This was before this week’s further crash of oil prices below the country’s budget bench mark.
By Hugo Odiogor
We seem to have returned to another regime of austerity measures in spite of the huge gains we made in the years of high oil prices. What does this say of our management of the economy?
First and foremost, I think it is a normal process when the country’s revenue begins to shrink and become more sensitive to our spending profile. As a matter of fact, there is nothing extraordinary about cost – effect measures becoming more sensitive economic realities. What seems to be more puzzling about the whole process is really twofold. First, the oil prices are not below the budget benchmark of $75bpd that was set for the budget so as to result in such panic measures in response to the dropping oil prices in the global market.Jonathan-austerity
Secondly, the budget does not reflect the reality of what goes on in the domestic and global economic environment. Put differently, our budget and budgeting process are just window- dressing. Our budgeting process reveals that government officials do as they please. The report of over spending by government ministries, departments and agencies has just been released and the current austerity announced by the government just confirms the fact that the budget has not really been the guide to spending and management of our revenues. If the budget is truly what it should be, what should be shrinking should be our savings, not what is required for running the government.
The austerity measure is an opportunity to reflect on what I have talked about so many times in the past. We have no clear strategy that responds to the scenario that are evolving in respect of the volatility of global oil prices. The oil prices have always been volatile. The only reason why they have remained stable in recent years is because of the economic activities in China and India, otherwise it would have tumbled ten times over like it had done in the past. The issue is; how come that something like this seems to have taken us by surprise? And this is to the extent that we are back to introducing panic measures again?
Many years ago, I had suggested that we should have three set of accounts to manage our revenue from the sale of crude oil. The first will be a distributable pool fund like we have in FAAC and this will be a pool fund that will be funded with certain benchmark that is so conservative that it reduces the appetite for over spending on the part of the government. More @ http://www.vanguardngr.com/2014/11/utomi-fumes-poor-governance-austerity-measures-says-govt-killing-nigeria/
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