For almost seven years, President Muhammadu Buhari had rebuffed calls for the appointment of a chief economic adviser who would be saddled with the task of formulating, coordinating, and monitoring the implementation of his economic policies. But with barely a year to the end of his tenure, President Buhari recently appointed Dr. Doyin Salami as his Chief Economic Adviser. Whatever may have informed the presidential change of heart, the task ahead is huge. Fortunately, Salami’s experience as the Chairman of the Presidential Economic Advisory Council (PEAC) since October 2019 and his role as a former member of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) makes him an ideal candidate for the job at hand.
In August 2015, just about three months into Buhari’s first term in office, the CBN had indicated that fiscal policy gaps and other factors outside its control had constrained the ability of the apex bank to impact price stability in the economy. “The drivers of the current upward inflationary spiral were of a transient nature and mostly outside the direct control of monetary policy. Consequently, the opportunity for further policy manoeuvre remains largely constrained in the absence of supporting fiscal measures,’’ stated the CBN that compelled our intervention at the time.
As we argued back then, at a time the country is in an economic mess that demands clear direction and competent hands, the CBN could not be left alone to continue to superintend the fiscal, trade and monetary policies, all at the same time. And with its capacity to defend the value of the naira being increasingly constrained, the CBN has desperately been throwing everything at the problem without any tangible results. The question now is, in the face of a burgeoning debt profile, staggering unemployment, high inflation and unstable exchange rate figures, can Salami help the president to turn the economy around in the last full year of his administration?
The statement from the presidency heralding his appointment said Salami is expected, “to address all issues on the domestic economy and present views on them to the president; closely monitor national and international developments, trends and develop appropriate policy responses; develop and recommend to the president national economic policies to foster macro-economic stability, promote growth, create jobs, and eradicate poverty, among others.”
Consistently, the nation’s fiscal authorities have blamed our economic woes on paucity of funds occasioned by perennial revenue shortfalls. But what is evident in the public space is that the bane of the economy transcends inadequate revenues. It finds expression in the inefficient and criminal application of available funds. The humongous leakages and wastages in the public service are areas that need to be looked at. Besides, Salami may also wish to fish for quick wins in the federal government’s medium-term National Development Plan (NDP 2021-2025) which was unveiled towards the end of 2021.
The unbridled resort to borrowing has become a deep source of worry, while the oft-bandied argument by government that Nigeria does not have a debt sustainability challenge is hollow. A nation that services debt with over 80 per cent of its earnings is certainly in a quandary. Salami must rise against piling up more debts to the already accumulated stock of about N40 trillion. He must also help the government to find ways of whittling down the high unemployment and inflation rates.
As a former MPC member of the CBN, Salami may have to collaborate more with the monetary authorities to address the foreign exchange problem, which is a major ingredient to inflationary pressures. As late in the day as it may seem, Salami’s appointment perhaps signals the aspiration of President Buhari to reset the economy and correct some glaring distortions that have undermined investors’ confidence.