By Duke of Shomolu
Now there is something every Government since Obasanjo has faced which is the growing cost of governance
The cost of running our democracy is one of the highest in the world gulping trillions of Naira
To service the three arms of Government, the many agencies under the Executives, the state Government and even up to the legislature requires humungous amounts that is serviced mainly by the Oil industry and IGR.
Every Government prior have found a way of servicing this monster.
Some have tried service reforms, others have tried blockages of leakages, yet others have printed money and still others had used the ways and means as its piggy bank. Most have despite these tried to shield the masses thru subsidies abd varying buffers.
This present government has taken the lazy approach – price increase.
From what we have seen so far, they have just allowed an increase in everything to mostly cover their running costs
From my point of view, every Government service have been increased from drivers license, to dues at the ports, to issuing International passports, its as if they see it as the only solution to everything
Withdraw subsidy, free up funds, ramping up price of fuel all in a bid to raise enough money to cover a growing monster which is Government expenditure.
We see spendings on travel and other logistics not easing up despite the announced restrictions in official travels.
We see huge donations by Government and people close to them, we see a Government expenditure in full flight like we are in an era of bouyance
Sacrifices being made by the people to cut their own running costs is not being replicated in governance.
All tiers of governance and its agencies are running expenditures that are off the hook being funded by the growing increases in their services and the almost total withdrawal of subsidies from almost every aspect of governance.
This has drastically reduced purchasing power which has impacted goods and services sold, hitting bottom lines and driving unemployment.
Obviously inflation will go up, damamging replacement cost and excarcebating an already horrendous cost of living and impoverishing the people.
This is driving crime, despondency deepening human misery ratio
Yet, the Government keeps pushing. It keeps increasing. cost of power which is already beyond affordability and yet we hear of an impending increase.
Fuel keeps going up with arguments that we are still buying cheaper fuel than the rest of the world or more recently, that it has nothing to do with them since its tied to international trade.
For the first time, the economic situation has hit the informal sector. The unbanked who formed the bulwark for economic stability.
The unbanked and cash driven retail economy ensured some form of stability cos they were not linked to the system and as such the import driven inflation did not really impact them making them serve as a buffer to the economy.
But as economic headwinds continue and with the aggressive financial inclusion of the last Government they have started being vulnerable to the vagaries of the economy and the errant policies of Government.
Much more importantly , is the fact that they are also being impacted by the effects of the fleeing middle class who have downshifted their economic needs to that of the informal sector thereby putting pressure on prices with an increased demand in those places.
Check out the prices of bread and pure water – informal sector stables. Check out house rents in suburbs, check out land prices in deep rural areas and you will see.
Government has to first remove personal interests in Government policy formulation to begin to tackle the economy
Then like we have all been shouting, it must as a matter if urgency block leakages, fight corruption, reduce cost of governance and free up funds that would now be deployed to buffering strategic areas in the economy.
It has to bring back some form of partial subsidy to hold down cost of power, fuel and things like fertiliser.
It cannot be taking away these subsidies only to be wasting the funds away on large Government spendings with little or no impact on the people
What we are seeing here now is a robbing peter to pay paul type scenario.
The only people who are making any sense of anything now are those in Government and those close to them.
Prices and cost of living can’t keep going one way-up, something has to give and something will give when we hit an economic threshold.
The time to act is now
Thanks
Duke of Shomolu
