Austerity: What lies ahead?

which were recently announced by the Minister of Finance and Co-ordinating Minister of the Economy Dr Ngozi Okonjo Iweala, with respect to the forth coming Budget 2015. Beyond its import of launching a state of panic in some quarters, it is difficult to see what special value the term ‘austerity’ has added to the government’s […]

which were recently announced by the Minister of Finance and Co-ordinating Minister of the Economy Dr Ngozi Okonjo Iweala, with respect to the forth coming Budget 2015. Beyond its import of launching a state of panic in some quarters, it is difficult to see what special value the term ‘austerity’ has added to the government’s fiscal plan for next year.
Barely two months after the global price of oil, the mainstay of Nigeria’s economy dropped by an average of 30%, the Minister is placing the nation on red alert, as if a cataclysmic outcome – perhaps unknown to Nigerians, is envisaged. Needless to aver that the reaction of the Minister is inappropriate, as hardly can a state of panic be deserving to Nigerians, since for the past five years or so, clear cut signals with respect to the incidence of the present state of affairs was predicted, and the nation had enough early warning signs to prepare.
Granted that a major factor for the oil price fall is the drop in the purchase of Nigeria’s oil by the United States of America (US), following the development of its shale oil resources, that should hardly justify Nigeria’s economy catching flu. The use of surface-occurring shale oil is centuries old, and even predates extraction of hydrocarbons from drilled wells. In the light of convolutions in the politics of the global oil market, it would be presumptuous that a high-tech driven nation like the US, would not seek solace in diversifying its energy base, even if it requires the exploitation of its vast shale oil reserves, at a cost that may be justified only by strategic considerations. The state of panic launched by Dr Ngozi Okonjo Iweala, through the austerity mantra would imply that not much defence for the Nigerian economy was mustered, even with the clear-cut early warning signs.
Returning to the earlier question over the return of austerity, answers will invariably depend on the circumstances of various respondents, ranging from their ages to social status. For instance, the very young ones who were not yet initiated into the dizzying drama of Nigeria’s political life during the hey days of the Shehu Shagari administration – specifically between 1981 and ’83, could be pardoned for accepting that austerity has returned to Nigeria.
But for the older Nigerians a yes answer would betray a poor reading of the affairs of the nation. For the recent adoption of the term ‘austerity’ by the Minister of Finance spawns an uncanny recall of a similar image in 1976 and ’77, when then Head of State General Olusegun Obasanjo launched a belt tightening regime, under his ‘low profile economy’ initiative, under which he initiated a series of stringent economic policies aimed at curbing ostentatious life style of the rich class. The term was to enjoy a up-grade when in 1982 when then President Shehu Shagari secured the passage of An Economic Stabilisation Act by the National Assembly in Lagos, to launch his Western style package of austerity measures.
Citing similar reason like Obasanjo’s earlier, Shagari’s administration had hoped that the initiative would heal the economy.  Rather, due to factors related more to mismanagement of the package, it turned out to be the government’s albatross, as circumstances surrounding the initiative contributed largely to a cocktail of factors such as the near meltdown of the economy and the political crisis of 1983, which were cited by the military as justification of the coup of December 31 1983, which ushered in the General Muhamadu Buhari regime.
The Buhari regime launched a series of draconian measures which deepened the austere conditions of life for Nigerians. By 1983, the General Ibrahim Babangida regime overthrew the Buhari administration and formally led Nigeria into the firm grip of the Bretton – Woods institutions:  the World Bank and International Monetary Fund (IMF), whose complement of prescriptions are yet to avail the long suffering Nigerian masses any modicum of relief from austerity pains. Babangida’s anointed successor Chief Earnest Shonekan was too busy sorting out the machinations of the power hungry military top brass, to focus attention on the harsh bite of the austerity grip until he was eased out of office by the General Sani Abacha junta in August 1993.
From the benefit of hindsight it became clear that Abacha’s commitment to easing the austerity pains was suspect as his tenure featured a mindless looting of the nation’s treasury even as he promised Nigerians something else. At the death of Abacha in office it was the lot of General Abubakar Abubakar to steer the ship of state. His brief tenure featured a one point agenda of leading the country back to civil rule in the possibly shortest time, hence could be pardoned for little credit in alleviating the austerity measures.  
If the civilian successor administrations to Abubakar’s had not reversed the austerity measures substantially, it is not surprising. Austerity measures being essentially economic policy playouts, are not reversible by the simple act of making authoritative pronouncements to that effect. Rather they are achieved by careful planning and purposeful execution of such plans, as well as political brinkmanship.
In this respect the Obasanjo civilian administration and Musa Yar Adua’s tenure had gained significant steps in consolidating democracy in Nigeria and thereby freed the Goodluck Jonathan government to address the economic challenges, including austerity.  But for Jonathan, the reforms in the power sector would have been in abeyance. But for him there would be no mention of linking Lagos to Calabar by rail. These are just a few of the projects that provide credit for the Jonathan administration.
Yet the ambit of austerity goes beyond the few salutary cost-cutting measures mentioned by the Finance Minister. For instance, there was no mention of when the fuel subsidy will be withdrawn since it is not compatible with an austerity programme. Also silent is the government over when the Naira will be devalued, as a mandatory component of fiscal adjustment under the Western style austerity regime that is instigated by falling national revenue.
Maybe, after the 2015 general elections.