The president of the Federal Republic of Nigeria can alter the composition of his cabinet at will. Accordingly, the recent removal of Mr Wale Edun as the country’s Minister of Finance and Coordinating Minister of the Economy ought not to matter that much. Matters of ill health apart, though, one possible reason for a minister’s removal is the extent to which his/her performance in office furthers the pledges made on the stump by the government in power. It is in this sense that Mr Edun’s defenestration matters: the office of the Minister of Finance and Coordinating Minister of the Economy is critical to the achievement of just about every item on a government’s to-do list. In this reading, the circumstances of the officeholder’s exit should provide evidence of the extent to which the incumbent administration is achieving its goal for the economy.
If the newspapers are to be believed, and as this newspaper put it recently, “The tension” that led to Mr Edun’s exit from the cabinet “stemmed from widespread complaints about low capital budget releases and slow budget planning by the administration, which has serially disrupted the country’s January-to-December budget cycle.” Apparently, not just have ministries, departments, and agencies (MDAs) been experiencing funding shortages, and difficulties paying their contractors, but federal lawmakers also “accused Mr Edun of recording ‘zero implementation’ of the 2025 capital budget despite the National Assembly approving a ₦1.15 trillion request to fund capital components”.
Mr Edun, on the other hand, appears to have anchored the funding shortfalls on the straitened circumstance of government finances, and the fact that under his watch, the Tinubu administration had foresworn the “unsustainable” practice of monetising the federal deficit to pay contractors. In disagreements of this nature, the truth is the first casualty. It helps, therefore, to get a feel of the stories that the numbers on the budget tell. Between 2014 and 2024, the federation’s earnings rose from ₦13.74 trillion to ₦50.38 trillion. For the Federal Government, the revenue figures over the same period showed an increase from ₦10.06 trillion to ₦34.71 trillion. Over the same period the federal government’s aggregate expenditure rose from ₦4.59 trillion to ₦35.06 trillion. And of course, buoyed by this massive inflow of monies, the disbursements from the FAAC reached ₦2.5 trillion in June this year.
It would look from these numbers that Mr Edun was actually simply sitting on a well-endowed funding nest. Until you remember that these are all nominal figures – i.e. before accounting for the effects of inflation (or the naira’s devaluation). In dollar terms, however, and this is no proxy for the effect on income or spending of rising prices, the Federal Government’s revenue fell from US$63.50 billion in 2014 to US$23.56 billion in 2024. Need we run the expenditure numbers in dollars? The point is that in dollar terms the profile of government expenditure over the last decade is no better than the revenue numbers show. Yet, the expenditure bit matters. Because for many things – from the servicing of the country’s external debt to the payment of gas vendors to the national grid – the nation’s spending is invoiced in dollars.
As a friend, who is informed on these matters, insists, the one thing that Mr Edun’s fallout with the incumbent government underlines is the severity of the country’s affliction with the “money illusion”. Unable to distinguish between nominal value (i.e. the amount of money in currency terms) and real value (the purchasing power of that money adjusted for inflation and exchange rate changes), our policymakers continue to conflate the number on the national paycheque with what that paycheque can actually buy. Indeed, the Tinubu administration is wont to advertise the increase in its naira income as evidence of the efficacy of its approach to governing.
Nothing is further from the truth. And the truth is that our current budget cannot buy much. But even this is only the tip of the iceberg. For according to my friend, when we tote all that needs to be fixed in this country, the discussion that we have been having so far is clearly couched in the wrong terms – based, as it were, almost entirely on an understanding of the state of the national purse that only considers nominal aggregates. While we may sympathise with the plight of incumbents, whether at the national or provincial levels, it makes no sense that even opposition politicians continue to pledge themselves to national growth and development goals without as much as a pause to consider how the processes leading up to the realisation of these goals are to be financed.
Given that over the last decade-and-half the country has also experienced a sharp fall in investment in the economy, there is an urgent requirement for a no-holds-barred conversation around the model that this country needs to drive development in the face of its increasingly limited resources. If, in the end, this is the only outcome of Mr Edun’s sack, it would have been worth it.
Uddin Ifeanyi, a journalist manqué and retired civil servant, can be reached @IfeanyiUddin.