SYSTEMATICALLY ADOPTED AUSTERITY MEASURES BY GOODLUCK JONATHAN LED-ADMINISTRATION abusidiqu/systematically-adopted-austerity-measures-goodluck-jonathan-led-administration-ismael-taiwo/ Austerity measures can be attributed to the state of reducing government spending and increasing frugality in the financial sector. Austerity measures generally refer to the measures taken by government to reduce expenditures in an attempt to shrink their growing budget deficits. These policies may include spending cuts, tax increases, or a mixture of the two. Without gainsaying, what we are experiencing now in Nigeria is a systematically way of introducing AUSTERITY measures being practiced in some countries like Greece, Italy, Britain and some Europian countries. It might not necessary for the measures to be debatable in our National Assembly before the adoption because of too much powers vested in our Executive Arm of Government but it is very important in a country where democracy is being practiced to seek the opinions of the people through their Representatives before embarking on any policy. It took a long time in the Parliament of Greece before the measures were adopted as there were debates and public enlightenments before the bill was passed into law. Many people believed that the measures will be used to tackle budget deficit in the country but it brought hardship to them and later turned to public unrest as a result of protests by aggrieved youths. Nigeria is a country whereby our leaders will just wake one day and forcefully introduced anti-masses policies without taking a critical look at the adverse effects the policies might bring to the people. In a country whereby the National Assembly passes law without implementation by the Executive, you will recall that sometime ago there was power tussle between the National Assembly and the Executive Arm of Government as a result of failure to implement 2013 approved budget to certain percentage. It is very glaring that theres reduction of money in circulation, wages and salaries can no longer meet the needs of civil servants; unemployment is gradually increasing day-by-day; taxes are increasing day-by-day; developmental projects have been drastically reduced and all these are the effects of Austerity measures. Austerity measures are typically pursued if there is a threat that a government cannot honour its debt liabilities. Who knows whether our government has borrowed money from international organizations on our behalf? In such a situation, banks and investors may lose trust in a governments ability and/or willingness to pay and either refuse to roll over existing debts or demand extremely high interest. Many banks are refusing to grant loans to investors because of unfavourable liquidity ratio, high interest rate in a case where they accept to grant loans. What a country? The masses are shedding tears and living in egregious suffering everyday because of unavailability of funds to meet their expectation. Many graduates can no longer find employment to cater for their wellbeing because the Investors could not find enough capital to invest; the private companies are folding up as a result of unfavourable environment; the employers are considering termination of employment for their employees because of inadequate funds to pay their salaries and wages. Some Economists have opined that the introduction of Austerity measures either declared or undeclared in a struggling economy will be counter-productive because it appeals to the wealthier class of creditors, who prefer low inflation and the higher probability of payback on their government securities by less profligate government. The subsidy removal and the bid to introduce five thousand naira note without proper consultation still fresh in our memory and based on adverse effects of Austerity measures which we are experiencing now; i have no doubt than to conclude that our government is systematically adopting the method. It is on this note I charge Nigerians to request for an explanation from our Coordinating Minister of Economy for the drastic reduction of funds in the circulation. Written by: Ismael Taiwo A. PRO, NANS-JCC Oyo State.
Posted on: Sun, 26 Jan 2014 12:12:12 +0000