Nigeria…Recession, Confusion, and Depression
I would start my column this week with this story...one I am sure that we have read or seen at one point or the other. I want us to reflect on it, and the following narratives about the United States will suffice, and then see my conclusion.
It is raining, and the little town looks totally deserted. These are tough times, everybody is in debt, and everybody lives on credit. Suddenly, a rich tourist comes to town.
He enters the only hotel, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to choose one.
The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher. The butcher takes the 100 Euro note, and runs to pay his debt to the pig farmer.
The pig farmer takes the 100 Euro note, and runs to pay his debt to the supplier of his feed and fuel. The supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town's prostitute that in these hard times, gave her "services" on credit.
The hooker runs to the hotel, and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.
The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything. At that moment, the tourist comes down after inspecting the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.
No one earned anything.
However, the whole town is now without debt, and looks to the future with a lot of optimism. “
In the United States the Trump Rump had talked so much about the "Infrastructure Bill"... A reading at the Brookings says, “Until Congress decides what they want to build and how they’ll pay for it, we don’t see a major infrastructure bill passing anytime soon.”
Simply put, there is a reason Congress and the Executive Branch split-up infrastructure activities—they are not that comparable. Each sector has its own planning ambitions, construction methods, governance challenges, and funding streams. Developing a single “infrastructure bill” would require a Congressional Tower of Babel.
Of course, the Trump Administration could try to sidestep many of these complexities by relying heavily on private-sector involvement and using the U.S Department of Treasury as the primary agency touchpoint. After all, letting the private sector decide which projects get built and where that work takes place is the spirit of the Trump campaign’s proposal for construction-focused tax credits, co-authored by new Commerce Secretary Wilbur Ross.
But this approach has already run into a political buzzsaw. To make private infrastructure construction and operation pencil-out, financiers need to find durable revenue streams to offset their large capital outlays.
However, many parts of the country do not maintain the population levels or economic activity to create investor confidence, and many projects—from public transit to water—are structured to provide more of a public benefit than a pure private-sector return. As a result, rural and urban representatives alike already questioned this exclusive approach.
There are other ways to design a single infrastructure package, but none seem palpable in the current political environment. The 2009 Recovery Act funded a broad suite of infrastructure programs, touching on both traditional categories as well as more broadly defined infrastructure like child development centers. But the Republicans spent the last 8 years haranguing the program’s design and its impact on the federal debt. It is hard to imagine the party doing an about-face and suddenly passing their own version.
A national infrastructure bank could split the difference, leveraging the advantages of a private financing model but keeping project selection at the federal level. But here, too, the initial capital to get the bank started would either add to the debt or lead to even more complicated questions during large-scale tax reform. Even if legislators solved that puzzle, they’d still need to design project selection criteria that encompasses all infrastructure categories.
Add it all up, and an all-inclusive infrastructure package feels like short-term fantasy.
Instead, we recommend legislators and the administration take advantage of broad public support to construct a national policy step-by-step, bill-by-bill. First, federal policymakers need to establish clear objectives for the country. We recommend prioritizing maintenance and connecting people and businesses to economic opportunity. Second, leadership should explore more sustainable, cost-effective strategies to invest in infrastructure, including flexible approaches like Build America Bonds. Finally, this is an invaluable opportunity to improve data collection, update performance measures, and democratize that information to the public. We can modernize our management systems at the same time we modernize our infrastructure.
And here’s the thing—there’s no need to rush. Infrastructure lasts for multiple generations, and it often takes years to complete projects. Most agencies do not even have key political appointees in place yet, creating a leadership vacuum. We also can bundle separate bills into one package, and use extra planning time to find extra funding and not force collaborations that don’t make sense.
The Trump administration and Congress are better served to take their time, design policies that work for the whole country, and deliver projects that maximize the public good. There is a legacy to be had here, but it’ll take more than rhetoric to deliver it.
All the entire political economic grammar above is in a nation that seemingly has a plan or is trying to layout one. In my beloved Nigeria, there is no plan, no one can see any infrastructural layout, bill whatsoever…by the day rather 2019 is more visible, in-fighting by the ethnic and faith nationalities. Supremacists battles on the political front involving boxers at both legislative, executive, judiciary and political party level; with everyone leveraging on citizenry apathy and division.
What have we gained, what intellectual rigour has our economists put into bear that can salvage Nigeria beyond virtual reality. All the messianic chorusing and gambit of corruption fighting corruption, what is the way forward, how can this nation with irredeemable potential be put on an infrastructural map, when and how—Only time will tell.