There is certainly a seeming lack of policy coordination in reform implementation (both vertically – between FG and other tiers, and horizontally – within the FG itself) – which is neither new nor surprising. Public policy coordination has remained an age-old issue in government and a fundamental problem for efficient service delivery in public administration and policy.
The President and his team are probably overwhelmed. This is a price they must pay for embarking on a journey of reforms without, it seems, sufficient diagnostic assessment and consultation, without adequate preparations and perhaps with scant ideas of the final destination.
The ‘bad’ news is that the journey has only just begun. First, the storm is always after, not before reform implementation. Second, market-based reforms come in a carefully prepared package which must be unpacked before the full benefits to the economy begin to manifest. For the complete ‘package’ one would expect more of these market-based reform measures in the coming days and weeks, including cost-reflective electricity tariffs, right-sizing of government, privatization of State-owned Enterprises (SoEs) and, possibly, budget cuts designed to ‘discipline aggregate demand’ etc.
Here are five options to table before the President.
1. Roll back the reforms? I doubt if this will find any favour with Mr. President. Reform roll back, so early in the day, will send conflicting signals to prospective investors and reduce their appetite to take risks and invest capital. This is certainly a no-no. This isn’t an option. Not recommended.
2. Go ahead with reforms full throttle? Those around the President and reform enthusiasts from afar would nudge him on: Afterall, first, the government is already celebrating that the initial reforms rolled out are beginning to pay off as Nigeria’s fiscal space gets bigger. States and Local Governments are swimming in cash! Second, the benefits of market-based reforms take time to manifest. It is a ‘long term thing’ they will argue. Mr. President, they will say, ‘unless you go whole hog, the reform benefits will be lost’. But as Keynes would argue, ‘the long run is a misleading guide to current affairs….in the long run we are all dead’. Unleashing relentlessly, waves of reforms is not politically expedient. Mr. President should be more circumspect.
3. Review the reforms to make ‘adjustments’ based on new realities. I have always believed that all reforms must be subject to periodic reviews. Policy makers must pause, between ‘episodes’ of reforms, reflect and update the situation based on new ideas and information generated from the assessment. For example,
3.1. I will argue strongly for a review of the new FX management policy. Perhaps a managed or ‘dirty float’ as opposed to the current free or ‘clean float’ will be a more attractive option. Currently more than 40% of all countries use some sort of a managed floating regime. Mercifully, the transition from free to managed float can be seamless, without pain.
3.2. On fuel subsidy it will be unthinkable to journey back to the opaque regime of yesterday with so much scope for arbitrariness and corruption. However, we must accept the inevitability of subsidy which should be seen as part of a robust social protection programme. What we then need is a framework for social protection that provides for what activities to subsidize, how much to spend on subsidy, who should benefit and how the subsidy should be administered. We can easily agree to provide up to XXX amount on fuel subsidy…beyond which the public must bear the burden.
4. Go ahead with the reforms but improve the government’s handling of negative reform outcomes. The truth is that the palliatives being administered aren’t working at all because the government is not applying the balm where it pains most. Yet, implementing transformative interventions- not palliatives- to mitigate the risks associated with market-based reforms is key to sustainable outcomes. The interventions must go beyond conditional cash transfers- which, in any case, have been tainted by several corruption allegations. Government must focus on Programmes for enhancing incomes and jobs through asset creation, fiscal inclusion, human capital development and rural infrastructure rehabilitation and maintenance. So, should we suggest the following?
4.1 The reform agenda must be re-calibrated to be consistent with new realities and grounded in realism and compassion. The agenda must seek to protect the economy against a much deeper crisis by preventing business collapse; it must offer genuine support to the poor and vulnerable and provide immediate comfort and security to enable them navigate the stormy seas.
4.2 In collaboration with the states, the government should set up a Special Purpose Fund -defunct PTF-styled- for the utilization of all monies saved from subsidy removal in building infrastructure in education, health and the empowerment of women and youth.
5. Going forward: Mr. President needs to set up a war room immediately, under the direction of the Vice President. Ad hoc committees and emergency meetings with governors won’t solve any problems. The war room will monitor reforms and reform fallouts, keep up with shifting priorities and difficult circumstances. The Office of the VP is best suited to oversee the War Room. Para. H 18 & 19 of Schedule III to the Constitution provides that the National Economic Council, which the VP chairs, shall have power to advise the President concerning the economic affairs of the Federation, and in particular on measures necessary for the co-ordination of the economic planning efforts or economic programmes of the various Governments of the Federation. By legal design, the Vice President (VP) is also the chair of the National Planning Commission, when it exists. He Chairs the Board of the Debt Management Office, etc.
ABOUT THE AUTHOR
Muhammad Sagagi is a a public affair commentator.
