By Idowu Sobowale
“History does not repeat itself; man does,” – Harvard Prof. Barbara Tuchman
My heart sank after reading the summary of the 2024 Budget and the promise by the Tinubu government to create a $1 trillion economy in ten years. Now, I am inclined to believe that Nigeria will never become the global economic power we yearn for as long as we continue to elect men seventy years and above as Presidents.
They all belong to the same generation making empty promises; thinking that they were inspiring their listeners.
All our Presidents, since 1999, including Jonathan, are far less informed about economics and social trends than many of their own citizens with good Master’s Degrees from reputable universities.
The $1 trillion economy promise is a product of the same mindset as Buhari’s vow to lift 100 million Nigerians out of poverty, in ten years, in 2015.
These are laughable utterances because they defy easily demonstrable analysis.
Buhari stubbornly clung to his ridiculous promise even during his second term; when Nigeria was already firmly established as the poverty capital of the world.
Tinubu will most probably do the same with his VISION $1TN ECONOMY.
To help promote this pipe-dream, Tinubu has re-cycled Dr Shamsudeen Usman, a former Minister of Finance, and an avid canvasser for VISION 2020 – which was a colossal failure.
It gave me immense pleasure to repeatedly expose Usman and all the other apostles of VISION 2020 – which was based on witch doctor economics. Don’t be surprised if Tinubu inaugurates a committee, headed by Usman, to drive the illusion of $1 trillion economy in six years.
Like VISION 2020, this one also promises to be a waste of time and resources.
None of those selected to work on this project will have the honour and guts to tell Tinubu to forget it.
Very soon, “financial experts”, engineers, surveyors, bankers, “youth groups”, accountants, lawyers, pastors and imams, cooks and bus drivers etc, will flood newspapers with suggestions about how Nigeria can perform the miracle.
That was what happened with VISION 2020 – until the year started and ended. Nobody was decent enough to apologise to Nigerians for building false hopes from 1992 to 2020.
We are getting ready for another scam.
WHY TINUBU SHOULD FORGET IT
“Behind the facts of economics are the facts of psychology…the emotions of fear and confidence; the judgments of doubt and certainty, constitute a very important medium through which we see economic values” – Arthur Stone Dewing, Harvard Business Review, October 1923.
Nigeria, under Tinubu, will not re-invent economic principles, re-write the metrics governing economic development, or draw up a new table for compound interest.
All these have been done before; they serve as caution to governments embarking on ambitious or unrealistic growth of the Gross Domestic Product, GDP, of their economies.
For me, all the noise about $1 trillion economy merely reminds me of the promises to deliver housing, education, employment for all by 2000 in the early 1990s.
Then, as now, everybody in government echoed the announcement by the President.
Only “prophets of doom”, like me, drew attention to the limiting factors – which would make the targets impossible to achieve – published our dissenting views.
We were dutifully ignored by the leaders and praise-singers.
Again, in 2000, I drew the attention of the promoters to the fact that none of the promised welfare packages had been delivered.There was silence all around.
On at least five different occasions in the past – Housing etc for All by 2000, VISION 2020, Obasanjo’s SDG by 2015, Jonathan’s 10,000MW before 2015 and finally Buhari’s pledge to lift 100 million out of poverty – I have warned all the Presidents not to tarnish their reputations by promising more than they could deliver.
I was always the prophet of doom – who just happens to be right most of the time. I can bet that $1tn in six years is impossible.
Tinubu is following the foot-steps of his predecessors by talking about a $1 trillion economy in six years.
From what had been revealed as his educational background at the university level, genuine or not, it is evident that his grip on economics is not sure. That is being polite.
That was why it was easy for him to stray into the same economic quick sand as his predecessors.
It will be in his own interest, as well as ours, if he drops the subject now; instead of investing valuable time and resources in a lost cause.
Here are the reasons.
At the risk of repeating myself, I must point out, once again, that employed as a Financial Analyst by a top Fortune 500 company in the 1970s, my department consisted of economists, mathematicians, historians, statisticians, computer programmers, sociologists, engineers, retired military officers and even two futurists.
Hard as it might be to believe, our primary mandate was to, as much as humanly possible, to predict the future for the firm.
Ours was a department which had no starting or closing time, no week-ends and where everybody read books, papers and magazines and watched television as if our lives depended on it – which in fact it did.
We were retained based on the percentage of forecasts we got right.
So, for me, peering into the future was a job – not a hobby.
One of the most useful skills we all learnt was borrowed from communist Soviet Union.
It was called the Input-Output Table; which was the key to planned socialist economies.
Very complex, but, when mastered, it would enable the individual to quickly decide if long term national or corporate programmes are feasible or not.
Every radical departure from current trends promising rapid growth must contend with limiting factors hindering progress.
Dictator Josef Stalin had millions of his fellow countrymen killed because promised targets were not achieved; and we discovered that the failure invariably occurred right from the start.
The targets were over-ambitious.
Nigeria’s GDP was $440bn in 2021; it is projected to reach $477bn by the end of 2023.
To reach $1tn in six years time, the country must add $523bn in that period. If somebody in the Ministry of Finance or the Budget Management Office had bothered to put on their thinking caps, they would have told the President that it would require an annual growth rate of roughly 22.5 per cent per annum to reach that target.
We have the projections by government for 2024, 2025 and 2026. They are 3.76%, 4.22% and 4.78% respectively.
Thus, in the first three years of the six, the national GDP growth is estimated to be below five per cent; meaning that faster growth rates will be required in the last three.
No nation in history has ever achieved anything close to that.
Furthermore, above 10 per cent GDP growth does not come by wishful thinking or as a result of good intentions.
Investments constitute the backbone of the growth; and what will be needed to grow at 10 per cent is about 300 per cent what we now have and at 22 per cent per annum, we shall be needing about 750 per cent more investment than we can expect in 2024.
Where exactly will the funds for investments, of that magnitude, come from?
The Medium Term Expenditure Framework, MTEF, three years projections, 2024, 2025 and 2026, proposed by the government, barely lift GDP each year above four and a half percent per annum on the average.
Tinubu, in particular, has a major problem. Despite his frantic trips abroad and the promises by Presidents of various countries to help Nigeria, he needs to be reminded that the investments which lifted China, Singapore, India – to mention three – were not made by governments but by the private sector whose judgments are not clouded by political considerations. For them, “the psychology of fear and confidence” is a very serious consideration.
Among other things, they will weigh the character of the Nigerian nation, the stability of government policies, the reliability of promises made to them and, lastly, the experience of companies now operating in the country.
Before and after the election, Nigerians have done a great job destroying the reputation of their President.
Anybody who thinks that foreign investors are not taking notice of all the things we have said or written about Tinubu must have rocks where brain should be in his head.
It will amount to monumental blunder on Tinubu’s part if he fails to realise that every foreign leader he meets would have been fully briefed about his track record – whatever that might be.
Despite the diplomatic plastic smile worn on their faces, there is only one question in their minds: “Can I trust this man”?
And, unless Tinubu works on improving his image, most of the promises made to him might not be redeemed.
He should call (not go please) the President of Pakistan who gathered $6 billion global pledges of support after the 2022 flood devastated his country. Less than half of the promises have been received; and many, presumed to be grants, have turned to “soft loans”. Tinubu should beware about relying on promises to help build Nigeria.
