Adeosun
by Sanya Ademiluyi
Perhaps, Finance Minister, Kemi Adeosun may be better known for her prominent British accent than her actual performance as chief of the Nigerian economy. She may also have deepened her uninspiring reputation as the country’s finance chief by her frequent prominent announcements of discoveries of ‘ghost workers’ on the government’s bloated payroll.
By the last count, Adeosun had discovered 60,000 ‘ghost workers’, which have been promptly removed from the government salary bill—supposedly lightening the burden. But the Finance Minister, now one year in office, seem to have had nothing to say to the country’s Private Sector businessmen and women—who have eagerly awaited clear signals about the Buhari administration’s economic philosophy and policies.
But last week, Adeosun appeared to have broken the trend somewhat when she announced a wide range of fiscal policies, howbeit, which were limited import duties incentives and of course, disincentives on various raw materials and semi-finished goods. The fiscal measures, you may wish to call them policies, are aimed at encouraging local production of goods and services, especially foods, while discouraging imported finished products.
The long list of items are mainly intermediate or semi- finished industrial materials and processed foods,including fats of sheep or goat and under-natured ethyl alcohol used in the manufacturing of medicines.
Rather, she has been needling the civil servants, seemingly trying to set them in line for the task ahead. Last February, Adeosun had ordered all ministries to set up efficiency units. The rationale? She said that the government agencies had to seek ways to optimize the meager resources available to government to achieve the goals of the Buhari administration. ”We have to avoid waste” she said.
But many civil servants saw this as another way to micromanage them, further deepening tensions between themselves and the minister. Some of that tension boiled over at the Ministry of Finance when the civil servants staged a protest against Adeosun calling for her removal. This included the symbolic ‘sweeping away of feet ‘, a ritual performed by the civil servants to express their rejection of their political leaders at various ministries.
If that was a little storm in the backhouse, Adeosun has faced growing charges of incompetence among Nigerians. Mid-last year, she flashed on the public radar again when she tweeted that—Recession is just a word.’ Recession just a word’ Many Nigerians screamed especially on social media, incredulous that the Finance minister could make light of a very serious situation as the country falling into economic recession.
As the country’s economy contracted further and the International Monetary Fund, IMF publicly confirmed the country’s recession after two quarters of negative economic growth, Adeosun has had to eat humble pie.
Surprisingly, Governor of the Central Bank of Nigerian, CBN ,Godwin Emefiele appears to have been taking much of the shine off the Finance Minister, while at the same time ,taking most of the public flak. Whereas ,Adeosun seems to have conveniently keep a low profile.
When the CBN governor first came out with a list of itemed banned from being imported into the country, he was stepping into Adeosun’s territory which is fiscal policy.
Adeosun told the Senate during a hearing Monday, January 16 that the banks may be suffering as a result of the implementation of the government Treasury Single Account policy, but in the long run they will be the better for it. Because they are not doing actual banking. How many people can get a personal loan to buy a car from the bank? But now. she says, the banks have to return to real banking. Adeosun does not comment to criticism that it does not make economic sense to warehouse this money for public expenditure with the Central Bank of Nigeria. especially at a time we need to spend our way out of a self-imposed recession.
The former investment banker and West London University Applied Economics graduate also took a shot at the so- called foreign exchange ‘black ‘ market where the exchange rate of the Naira vis-à-vis the US dollar has continued to fall.
“The parallel (black) market would soon disappear” said Adeosun.”Because it is not supported by any fundamentals. No fundamentals at all,” she said emphatically, adding “the forces driving down the naira in this market are irrational and emotional.” But perhaps, to quote the famous words of American humourist, Mark Twain,’ all accounts of the death of the ‘black’ market have been exaggerated.” Indeed, the ‘black’ market,( which is actually the open market for forex,) has survived countless predictions of its impending demise since forex shortages first begin about 35 years ago. Thus, Adeosun’s latest prediction may not be an exception,except she knows what Nigerians don’t already know about their wobbly forex exchange markets.
Curiously, the governor of the Central bank, Emefiele and ranking officials of the bank were conspicuously absent at the hearing although they sent representatives. Did they stay away to show their displeasure with Adeosun?
Meanwhile,Adeosun has been warming up to the business of raising foreign debt for the Buhari administration. The former investment banker should be at home with debt raising. Few weeks ago she announced that the Federal government intends to issue a $300million Diaspora fund meant to raise that amount from Nigerians in the US and Europe.
In the past few years but one, Nigerians abroad sent home an average of $22billion per annum. But this remittance appeared to have suddenly dried up in 2015 after the advent of the Buhari administration in May,2015. Now, Adeosun thinks the Buhari administration has built enough confidence among Nigerians abroad that would make the offer a success. And only on Tuesday, January 16,Adeosun announced that the federal government would issue a $1billion Eurobond debt offer in march. In late January however, the bond was successfully issued with Adeosun gleefully announcing that the offer was oversubscribed by 800 per cent. its the reason she proffered for its oversubscription that seems misleading.
“The oversubscription of the offer shows the level of confidence the international investors have in our economy,” she said. Not so fast Adeosun. The offer has a 7.8 per cent interest yield, whereas, most offers on the global markets were in the range of two to five per cent.
Says one financial analyst,” the investors let their appetite for attractive returns, override their
risk considerations.” A finance expert, Dr Uche Uwaleke associate professor and Head of Banking and Finance Dept. Nassarawa State University puts it this way.” The Eurobond was oversubscribed because we offered high returns relative to other bonds(on the markets).The average bond yield of sub Saharan Africa countries is between 5 to 6 per cent. We sold our bond very cheap”, he said. ”So the high risk investors responded (positively).”
Uwaleke who was speaking at the recent Finance Correspondents Seminar in Sokoto organized by the Central Bank of Nigeria, CBN further noted that the %1billion raised by Adeosun was small and a bad deal given that less than two weeks later, she was rushing back to the same markets to try and raise a further %500 million meant to finance deficits in last year’s(2016) budget. Nigeria would have to pay sundry charges and commissions to international arrangers of the two Euro bond deals.
Curiously despite eagerly raising funds from the global financial markets, the finance minister appears unconcerned about continuing losses of the Nigerian Stock Exchange, NSE and the widespread lack of investor confidence in the capital market. Last year, equities lost about N604 billion of their value during the year, severely burning investors especially small individual investors with lifesavings put into stocks on the NSE. The stock market losses for the year would have gone much higher but for the fact that the market rallied in the last three days of 2006,gaining a whopping N133 billion, as if determined to give the New Year,2017 a welcoming gift. The market has since relapsed to a poor performance. That may as well be water off a duck’s back to Adeosun.
Wale Ayodele, an analyst writing in the Daily Post Nigeria, an online portal, January 7 said: “ If one is to rank the claimed achievements of the Finance Minister Mrs. Kemi Adeosun, the removal of 23,000 ghost workers from the federal payroll will easily top the list. But why would any serious Finance Minister gloat about such an achievement when the basic public finance infrastructure that made it possible was designed and implemented by her predecessor?”
“After over a year of occupying one of the most important ministerial positions in the constitution, this seems to be Adeosun’s only substantial achievement. At a time that the country is facing the most serious economic challenges of a generation, with businesses folding up, jobs drying up, key economic indicators down and families experiencing evaporating real wages, the obsession with ghost workers speaks volumes about the priorities of the Finance Minister”, he concluded.
Asked to rate Adeosun’s performance as the country’s Finance minister, Olufemi Awoyemi, chartered accountant/ financial analyst and CEO Proshare Ltd said: “I will consider a below average performance, given the effect (of her performance) and the output.”
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