You bring back hope to despairing minds; add spirit and strength to the poor…Horace, 65-8 BC.VBQ, P 94.
IN a December 25, 2016 article titled HOPE RETURNS WITH 2017 BUDGET – IF WE BELIEVE IN OURSELVES, Nigerians had been classified on January 1, 2017, into two groups regarding the 2017 Budget: pessimists and optimists.
Ordinarily, it would have required up to the second half of the year for those in the minority to start saying “I told you so!” But, fortune and research had combined to provide optimists an early advantage in the competition for the minds of Nigerians. For this writer, this turn of events was expected and the reasons had been pointed out in the December article. But, the pessimists might have ignored it as hearsay and unreliable information, while the optimists might have missed its significance altogether.
PARIS CLUB REFUND TO STATES
On Saturday, January 7, 2017, the NATION on its front page published the list of thirty-five states which received refund from the debt settlement of the Paris Club loans to Nigeria in 2004 by the President Obasanjo regime. Confession must be made that some of us with our noses to the ground and in search of reasons for hope for economic recovery in 2017 were aware that the states were about to receive this windfall.
The only state inexplicably left out of this bonanza is Kano. This is, however, not the time to start making inquiries into the exclusion. For now it is important for us to examine the significance of this stroke of good fortune at this time and its impact on the robust debate between the eco-pessimists and we the eco-optimists.
The states are ultimately entitled to N522.74 billion. But, right now, they have N388 billion jingling in their pockets. In order for readers who are not economists to place this development in true perspective, six states, one each had been selected from each zone had been selected for comparative analysis between what the states had received from the Federation Account in some months of 2015 and 2016.
Ordinarily, the table should have been sufficient to declare that “the difference is clear.” But, in Economics, figures don’t usually speak for themselves. At any rate they seldom say all there is to say.
Simple arithmetic would demonstrate that what the states have received as unexpected windfall amounts to multiple months revenue as follows: Bayelsa 2.3; Borno 4.3; Katsina 4.6; Niger 4.7; Imo 5.2 and blessed Osun 33 months!! On the average the states of Nigeria had received in January 2017 three and a half months extra dividends. That explains why economic recovery will start from there.
Furthermore, there is the equivalent of a month’s bonus to be collected later in the year. When the ripple or multiplier effects of these providential showers of blessing are added together, the result will be staggering. These are some of the reasons for cautious optimism and a point the pessimists missed. Yet, that is not all in this year when states will, for once, become the engine rooms of our nation’s economic growth.
GO EAST MY SON
Encouraging as the report above is, it pales by comparison with what is about to occur in two South-East States – Abia and Imo. But, before letting readers into the secret, it is pertinent to take a look at history which should always guide us.
Back in the early years of settlement in America, the Pilgrims first landed on the East Coast. As the population grew and job opportunities became scarce they discovered that there were hidden resources and opportunities on the West Coast. So, as sons grew up and were jobless, the advice to them by the older generation was “Go West my son and prosper”. And they went and developed states like California and became billionaires.
Today, in Nigeria, the advice is “Go East, especially Abia and Imo.” In April 2011, former Akwa Ibom State Governor, Godswill Akpabio, was declared the first “one trillion naira governor in Nigeria” – right here in VANGUARD. In just over five years, Akpabio had collected from the Federal Government almost twice what his predecessor, Governor Victor Attah, received in eight years in the same office. That was a record still unbroken till now.
In 2017 the incumbent governors of Abia and Imo States are about to break Akpabio’s record – in one day. For reasons too lengthy to discuss here and need not delay us, the two SE states are poised to lay claim to about N7 trillion (shine your eyes) on funds which had been lying in an escrow account in the Central Bank of Nigeria in their favour for more than ten years.
That is about the same amount as the Federal budget for 2017. Granted for a lot of reasons the entire amount will not be released to them this year; but, even twenty five per cent will lift the two states past Lagos State as the states with the biggest annual budget for the first time in our history. Change? Perhaps.
And, it will not be for 2017 alone, it might continue for about four years. The rapid economic growth the two states will experience will certainly impact positively on the states surrounding them and might even promote reverse migration of the states indigenes from other parts of Nigeria as well.
Again, the multiplier effect of additional N1.8 trillion being pumped into the economy from the two states cannot be easily quantified; but, it will be enormous.
Finally, the price of crude oil climbed to $65 per barrel for the first time in twenty months – meaning more petro-dollars are on the way. God has taken control.
We conclude where we started. Newly available evidence points to the likelihood of a robust first quarter of the year 2017 and if the Federal Government speeds up the release of funds to Abia and Imo from the escrow account, the debate about the direction of the economy in 2017 is over. The eco-pessimists can go fishing. The Nigerian economy will grow positively, perhaps as mush as three to four per cent this year.
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