With the global financial crisis of the 2008
driven by the collapse of the US housing
market , world leaders and economists were
debating policy prescriptions to revive their
economies. There were all sorts of economic
theories and ideas advanced from different
schools of economic thought. There were
economists from the Keynesian School that
said what was needed is to increase spending
in a downturn economy which will stimulate
consumption and production. Believers in
Miltonian School of Economic Thought said the
solution is cutting taxes and reducing
government spending to revive the economy.
Economists from Austrian School of Economic
Thought believe it is too much regulation and
government intervention, therefore to get the
Western economies back on track, they said
less regulation and government interference
was needed. In Nigeria, Ngozi Okonjo Nweala,
an MIT PhD trained Economists, a former MD
of the World Bank has decided to throw away
her much-cherished credentials and
experiences to transform to a founder of a
new school: The Otuokean Economics School of
Thought, to deal with our Nigeria’s daunting
economic challenges.

The Otuokean Economics School of Thought is
an interesting one that embodies the failed
economic policies of the PDP government in the
last six years promoted by Goodluck Jonathan.
This school of thought derives its name from a
village called Otuoke, the hometown of
President Jonathan, in Bayelsa State. The
first and center piece theory of this new
school is “The Blame Game Theory”.The concept
of blame game theory is similar to a village
market woman blaming all her non business
prospects on others instead of her failed
market strategy.


To Ngozi and the PDP Government, this
dramatic fall in oil prices was unforeseen.
Ngozi knows that is not the case, but in her
current field of expertise of the Otuoke
Economics school of thought, it has to be so.
All other Economists including Ngozi, knew
that the Quantitative Easing (QE) that has
been going for the last 5 years by the US
Federal Reserve, and currency manipulations
in Japan and China would come to this: A fall
of commodity prices including oil. This is
exactly what is happening. The moment Janet
Yellen, announced the end of quantitative
easing late October and the plan to raise
interests, the global oil market started
responding appropriately.

For most of us that do not know what
Quantitative Easing is, in simple terms it is
just a way of increasing money supply
(printing money) by issuing bonds to investors
and banks by a central bank. The US Fed
reserve kept interest rates low at below 1
percent for almost 5 years to enable the US
economy recover, and issued bonds running to
trillions of dollars. During this same period
because of increase in money supply, the
prices of commodities including oil went up due
to excess liquidity in banks and stock markets.
It was a great period for our dear country
except that our economic manager allowed our
excess crude and all earnings to be
squandered, while showing up on TV with wide
smiles stressing how the fundamentals of the
Nigerian economy are so strong. This is only
possible from an Otuokean perspective. As the
exchange rate of Naira continues to slide, her
only solution is to ‘blame’ the Governors for
insisting that excess crude account revenues
be spent. She forgot that she is not only the
Minister of Finance, but the Coordinating
Minister of the Economy, whatever that
means.

It is interesting that Ngozi found it necessary
to warn Nigerians of the dire straits the
economy is going to be only few months back..
It should be obvious to every layman economist
what the consequences of the end of
quantitative easing will be on commodity
dependent economies like Nigeria. Our
situation will have been more manageable if
not for the fact that the missing billion dollars
from the central bank is what is needed now
to defend the Naira. Unfortunately, that the
money is unaccounted for, we are now faced
with a painful scenario of devaluing our
currency which implies indirect taxation on the
masses .

It is of course not only the Quantitative
Easing that is responsible for the fall in oil
prices. There are issues of excess supplies in
the market due to shale oil production in the
USA, and additional oil coming to the market
from Mexico and Canada etc. There is also low
oil demand in China and EU due to sluggish
economic growth. However, our problem in
Nigeria is the mismanagement of our oil
revenues and the massive stealing being
‘coordinated’ . The Finance Ministry has failed
to do a good job of tracking commodity prices,
global oil production, and its impact on our
economy over the years. There are no serious
policy briefing and research papers on what is
likely going to happen after the period of oil
boon. The only thing Ngozi kept saying is the
‘fundamentals of the economy are strong’. I
heard her say that it is a dangerous job to
forecast oil prices, I would have to remind her
that it is not dangerous, it is a lucrative job
on Wall Street. Gary Cohn, President of
GoldMan Sachs Group Inc, is forecasting oil
prices may hit $30 per barrel in the coming
months: http://www.bloomberg.com/news/
2015-01-26/goldman-sachs-s-cohn-sees-oil-f
alling-to-30-in-extended-slump.html Madam
Finance submitted our budget with a
benchmark oil price of $65 dollars to the
National Assembly. How is the budget going to
work this year? Are Nigerians going to vote
for this incompetent Government for four
more years?

With the falling oil prices and the massive
looting that has taken place, Nigeria will have
to be loaded with debt again as the only way
to finance Nigeria’s budget deficits. There are
reports by Bloomberg News of the Government
plans to borrow money from the bond markets
to even pay Police allowances before this
election. http://www.bloomberg.com/news/
2015-01-27/nigeria-borrowing-won-t-come-
cheap-as-cops-want-salaries.html . This is
very serious. I hope the policemen will not
allow themselves to be used to rig this
election. It is possible that after the
elections, the police may not get their salaries
for months to come: use and dump tactics.
Because of the poor state of the nation
finances, the yields on Nigeria’s bond is 7.58
percent, compared with 6.82 percent of
Ethiopia today.What that means is that
Investors have more confidence in Ethiopian
Bonds than our own, and so we have to pay
more interest to borrow money. Very sad
indeed! Nigerians are waiting for the audit
report regarding the missing 20 billion dollars.
If the PDP goons will not allow the report to
come out, I think the most honorable thing to
do for the Finance Minister is to resign and
move on. This Government is not interested in
solving Nigeria’s economic problems. Jonathan
and his cronies want four more years of
continuous looting even in the face of
dwindling oil revenues and hardship for
ordinary Nigerians.


The second theory of the Otuoke school is the
“Sharing Theory” which was formulated by our
retired Permanent Secretary from Bayelsa,
Mrs Patience Jonathan. From sharing of
excess crude oil revenues, to sharing of the
fuel subsidy to marketers, to sharing of
electricity assets to party loyalists, comes the
ultimate of all sharing: the “blood they have
been sharing who ever they are” as she said.
Chai Chai there is God o!. In Otuoke
Economics, it is all about “Sharing”, which is
a fundamental concept that drives the
Government and it has bankrupted Nigeria.
The finance minister is presiding over sharing
and sharing and sharing...Suddenly then the
Government after stealing all the money,
came up with a crazy idea of raising taxes on
businesses, and import duty on goods. There is
no new innovative way to drive the economy
and diversify the revenue base despite our
agriculture and minerals potentials. In 2008, I
experimented on the value of our mineral
resources. I was told that there was a mineral
stone of value in Nasarawa State, it is called
Tourmaline which is used in making really
expensive jewellery. I decided to buy a small
piece the size of my fingertip, and I was told
to pay fifteen thousand naira (about $100
dollars). I thought the gemstone was
expensive, but because I wanted to
understand the market, I paid the young
Geologist to get it and send it to the USA. I
made an appointment with a Professor of
Mineralogy so that I can learn about the
gemstone. He told me to come with my
gemstone for him to explain what it is and
figure out its value. I went to his office, sat
down and brought the gemstone out. The next
thing he did really surprised me; He went
straight to a hidden safe in his office, opened
it and brought out the same kind of gemstone,
a little bigger than mine, polished and cut to
shine. He told me the gemstone was a donation
to the Geology department by an alumnus, and
the price written on it was $3500! Not only
that, the stone’s origin was Nigeria ! Now
that oil price is falling , is the price of gold
not going up? Don’t we have Gold in Zamfara
and Ilesha, and what have we done with the
deposits over the years?

The third theory from the Otuoke School is a
shocking display of indifference and open
support for impunity : “The Stealing is not
Corruption theory”. Who is in a better
position to advance this new theory than the
Dean of the School? The President strongly
believes that corruption should not be
punished, and he is on the campaign trail
saying it shamelessly. We have massive cases
of corruption such as Malabu Oil deals, Stella
Oduah’s bullet proof jeeps, fuel subsidy fraud,
immigration recruitment scam, etc that have
not been logically and seriously dealt with.
Why is it so? It is the president’s philosophical
disposition to corruption. The consequence of
this is GEJ has presided over a period of oil
boom never witnessed in the history of this
country, but ironically all the economic
indicators have deteriorated considerably. The
unemployment rate is up, Poverty levels are
up, Our growth rate is not commensurate with
the revenues we have earned, and our
domestic and foreign debt profiles are rising.
While the PDP campaign is lying that Nigeria is
the third fastest growing economy according
to CNN at 7.3 percent, the IMF stated that
our economy is going to grow this year at a
lame 4.8%, the slowest in 8 years: http://
www.imf.org/external/pubs/ft/weo/2015/
update/01/pdf/0115.pdf . The presidential
campaign is all about lying.

Otuoke School of Economics has turned all well
known and tested economic theories upside
down. It has stood economics on its head, and
it is standing Nigerians on their heads too.
Presently, the exchange rate of Naira to
Dollar is about 210 Naira at the global oil price
of $45. Oil prices are likely going to keep
falling to $30 per barrel, the question is how
much devaluation of Naira will be enough?
Probably 250-300 naira per dollar. Reuters is
reporting that the biggest bank in the world,
JP Morgan, says it could remove Nigeria from
the key bond index it manages because of a
lack of liquidity in the African country's
foreign exchange and bond markets in the next
3-6 months http://www.reuters.com/
article/2015/01/16/nigeria-bonds-id
USL6N0UV2DH20150116 . What this signals is
that in the next 3 months our Naira will have
less value, and we are going to have less
reserves that our own foreign reserves banker
wants to drop us from their index, as in we do
not matter anymore to them. The Otuoke
Economists have destroyed our economy and
kidnapped our Naira. Unless one is a
beneficiary of the missing billion dollars Sanusi
was talking about, I do not see how voting for
the continuation of these failed policies will
benefit us as a country. To vote for
continuity of these, is choosing to walk with
your head and not legs for four more years!
The pains and awkwardness of such a walk is
better imagined. That is why we need CHANGE!

Nigerians cannot continue with this Otuokean
Economic theories and their painful
prescriptions. Nigerians were suffering even
when oil was selling at $118 per barrel and
above in the international market. Now that
oil is at $45 and may continue to fall to $30
dollars as speculated, what is going to happen
if we continue on this path of mismanagement
and looting? We need a new Government of
APC that will retrieve our stolen billions of
dollars which can be used to defend the value
of Naira, and restore our economic glory. The
great singer Fela, sang about double wahala
for the dead body. It is double wahala for
Nigerians to be robbed billions of dollars of oil
revenues, and then be asked to pay taxes in
form of currency devaluation to the robbers.
Nigerians will say no to this bitter economic
prescription by voting out PDP and its
Otuokean economics experts on February 14,
2015. We have a choice to make: Walk with two
legs on election day, and vote out an
incompetent Government with our PVC or start
learning the balancing act of how to walk
upside down with our heads for four more
years just like the economy is. Prof Soludo,
rated this Government F9 in handling the
economy, but the issue is beyond a grade, it is
about professional malpractice and
mismanagement of an economy of a population
of 170 million people, and that deserves some
jail time too. We are waiting and praying that
they bring back our kidnapped girls. It is clear
to all that based on the mismanagement of
this economy, the value of the Naira has been
kidnapped too. The economy kidnappers should
bring back the value of the Naira because the
consequences of continuous devaluation of the
Naira and looting of the treasury, is
sentencing more Nigerians to slow dead.
Follow me on twitter @kabirhassan
https://www.youtube.com/watch?v=aL4F6aHR
fFg

True talk!