When it comes to economics, Nigeria seems to live in a world of virtual reality. Everything works on paper but nothing does in real life Pini Jason reports.
It has now become customary for the Nigerian government to use the annual budget presentation as an excuse to preen itself on its economic performance. In this it did not disappoint during the 1998 budget presentations by Head of State, Gen. Sani Abacha and the Finance Minister, Chief Anthony Ani.
According to government: "1997 recorded some positive developments in the economy. Inflation tumbled from 29% in December 1996 (from 72.8% in December 1995) to 8.5% as at December 31, 1997. The exchange rate of the naira remained stable (at N84 to the US dollar). Estimated growth rate in 1997 was 3.77%, a marked improvement on the 1.3% recorded in 1994, 2.2% in 1995 and 3.25% in 1996.
What the presentation did not say was that the growth rate of 3.77% fell far short of the 5.5% projection for 1997.
More statistics were rolled out: Capacity utilisarion increased from 32.5% to 33% in 1997. Yet the manufacturing sector, according to the government, recorded a decline from 1.02% in 1996 to 0.72% in 1997.
But statistics, as we all know, can be made to say anything. The reality is another story altogether.
For example, the first quarter allocations of the 1997 budget were not released till well into the middle of the year, while the second and third quarter allocations were only released at the rail end of the year.
As the Minister of Finance and the Petroleum Resources Minister publicly bickered over the release of funds, Nigeria's four refineries ground to a halt, unleashing a fuel scarcity unprecedented in the history of the country. And the government, which boasts of financial prudence, has been importing petroleum products for domestic use since June 1997.
The 1998 budget proclaimed many grand objectives among which were job creation, sustainable growth, expanded production, sustained fiscal discipline, improved social and economic infrastructure, and sustained transparency, accountability and comprehensiveness in the conduct of government. It has also promised privatisation of state-owned enterprises to improve their performances and efficiency.
But, once again reality intruded. By April 1998, Nigerian crude was selling at $13p/b, well below the $17p/b used as the budget bench mark. Domestic fuel crises persist in major Nigerian cities, crippling economic life as Nigerians spend most of their...