What do you remember when you think of SAP?
I remember hearing the word ‘austerity’ a lot as a child. It was always a strange word for a couple of reasons. While I didn’t know the dictionary definition, I knew that it connoted hardship (and nobody likes the thought of that). Also, my father’s name is Austin, so whenever someone said ‘austerity’, I would think of him. I still do.
The subconscious mind is a fascinating thing really.
“Nigeria is a special snowflake.”
A friend of mine says that all the time. I first met him nearly 25 years ago, and in that time, I’ve not met anyone with a comparable ability to combine dry wit with sarcasm, and hit the nail on the head every single time. It’s a skill I hope to learn, to keep me entertained in my wise old age.
The ‘special snowflake’ analogy is really not that uncommon, nor is it difficult to understand, even if you’re really not familiar with (or interested in) snow. But whenever he says it, I find that I am intrigued.
So this past week, I’ve been thinking about snowflakes. Also this past week, there was unusual snowfall in Saudi Arabia. And since the Saudis will be important determinants of our fiscal fate for the next three and a bit years, I’ve taken that as a sign that I’m on to something.
The journey from there to here was a perfect storm in some ways and a comedy of errors in others. Two inevitable things happened along the way: oil prices took a hit (albeit at break-neck speed) and the political economy took over in a historic election year. With the dust having cleared, one doesn’t need too much sophistication to sense that we’re in much leaner times.
President Buhari’s government will struggle to deliver on its big ambitions with less oil rents to play with. Throw in a weak reserve position, and all those very good promises to invest in infrastructure and education, stimulate SME growth, make conditional cash transfers to the poor and frankly continue to subsidise manufacturing and trade with an artificially high Naira (but nobody likes to put it that way), while funding a counter-insurgency in the North-East, start to sound expensive.
Mr President was very clear during the ‘maiden’ Presidential Media Chat. Between capital projects, established commitments and supplying FX to parts of the economy, he put it quite bluntly: “we don’t have any hard currency now”. In short, there’s no room for sudden or false moves. What is in the pot is already spoken for.
So, now what?