To say that economic policies of the present administration of President Muhammadu Buhari are not defined is not news, but the hard biting effect on the citizens is now begging for attention. Nigerian Bureau of Statistics, NBS, said inflation rate had shifted from the one digit President Buhari inherited to two digits in the last one year. NBS disclosed in its last release that inflation had climbed to 14.5 perceptaway from 9 percept as at the time of handover on May 29, 2015.
However, Nigerians know that cost of living has increased astronomically. Some believe that comparatively, price of commodity goods is much more than the inflation rate put forward by NBS. The reality on ground is that price of commodity goods has continuously been on the increase by the day. For instance, the cost of staple foods has tripled in the last one year. 50kg bag of rice, which was bought at N8, 000, now costs N30, 000;tomatoes, onion, beans and other food items are not left out in the race to climb out of the reach of the common man. Hike of transportation fare is an issue to be discussed for another day. Now families are at daggers-drawn because of the prevalent costs of goods in the market.
The argument of some concerned Nigerians is that situations wouldn’t have got this bad if the fiscal and monetary authorities had taken the needed steps earlier. It is obvious that the falling price of crude oil in the international market contributed immensely to the present economic downturn, but there are steps that would have been taken through collaboration between monetary policy formulators and fiscal authority to cushion the effect of the economic woes.
In a paper titled‘Issues, Challenges and Opportunities in Managing Nigerian Monetary and Fiscal Sectors,’ M. K. Tule defined monetary policy as a deliberate action of the monetary authorities to influence the quantity, cost and availability of money/credit in order to achieve desired macroeconomic objectives of internal and external balance.
Common frameworks employed by the Central Bank of Nigeria, which is the custodian of the monetary authority in the conduct of monetary policy, include monetary targeting, interest targeting, exchange rate targeting and interest rate targeting.
Others are inflation and nominal gross domestic product or output targeting. CBN has adopted various measures to constantly fine-tune operations of financial system in order to ensure that it provides a platform for the transmission of monetary policy. These include improvement in the interbank and foreign exchange markets, thereby creating competition among banks.
On the other hand, fiscal policy is described as the revenue and expenditure operations of the government that influence macroeconomic condition of the country. It is a means by which a government adjusts spending levels and tax rates to monitor and influence a nation’s economy.
Through fiscal policy, regulators attempt to improve unemployment rates, control inflation, stabilise business cycles and influence interest rates in an effort to control the economy. In Nigeria, fiscal policy is the exclusive preserve of the Federal Ministry of Finance. It oversees that the budget of the federal government creates a platform for coordination with other agencies and level of government. Fiscal policy that increases aggregate demand directly through an increase in government spending is known as expansionary or loose while fiscal policy that targets tight measure by reducing spending is called ‘contractionary.’
There is no doubt that fiscal policy in Nigeria has faced strong challenges due to largely the mono dependent nature of the economy. Some of the challenges facing it now include; slump in oil at the international market, fiscal leakages, insecurity and infrastructural gap.
For a developing country like Nigeria where socio-economic problems such as poverty, unemployment and inequality influence policy decisions, it becomes important to study inter linkages among the constituent sector so that positive growth impulses emerging among the sectors could be identified and fostered to sustain the growth momentum.
An in-depth understanding of inter- sect oral dynamics becomes all the more important for policy makers so that effective monetary, credit and fiscal policies could be designed in order to achieve the broader objective of inclusive development.
The economic challenges confronting the country now no doubt elicit effective response from both the fiscal and monetary authorities. Fiscal policy and monetary are two major drivers of any nation’s economic performance.
These two policies are sued in various combinations to direct a country’s economic goals. While monetary instruments are employed by the central bank, the fiscal policies are midwife by the ministry of finance.
The coordination of the fiscal and monetary policies needs to be supported by concrete institutional and operating arrangements to achieve the desired goals. Perhaps it is against this backdrop that well-meaning Nigerians have called for synergy between the monetary and fiscal policy authorities in order to stabilise the economy.
Monetary Policy Committee MPC, in recent time has been emphasising the need for the Fiscal Authority and Monetary Authority to collaborate to safeguard the economy out of the woods.
During press briefing after the MPC meeting in March 2016, governor of Central Bank of Nigeria, Godwin Emefiele said, “The MPC believes that complementary fiscal and structural policies are essential for reinvigorating growth. The MPC also stressed the need to sustain, deepen and speed up reforms designed to ensure focused coordination of monetary and fiscal policies.”
Speaking on the need for co-ordination between monetary and fiscal policy makers for the betterment of the economy, Mr Patrick Ediale stressed that efforts should be geared towards ensuring that fiscal policies, such as galvanising infrastructure to stimulate local productions is pursued. “According to him, when local production and consumptions of local goods are encouraged, it would have reduced overdependence on imported goods that has been draining the nation’s foreign reserves.”
Ediale, who is a solicitor andadvocate of the Supreme Court of Nigeria, said that the issue of late passage of budget should not be an excuse because government has right to inject money into the economy though funding projects that was carried over from the last year before the current budget is passed.
He said that the imbalance in fiscal response to the macro-economic challenges facing the country has led to increased youth restiveness, as unemployment had become a normal phenomenon in the country. The ripple effect, according to him, was that insecurity situation has gone really bad. While issues such as kidnapping, robbery and agitation have been on the increase.
Mr.Ediale urged transparency in the conduct of government businesses. “I want a situation where details of the contracts awarded for road projects and things like that, are disclosed to the masses and how much government has mobilized contractors to be made known so that people can monitor and ask questions if progress of work is been delayed. He said that government should revisit the policy of publishing allocations to states and local governments as was the case with past administration for proper accountability by that level of government. He urged the government to commence budget implementations right away in order to inject needed liquidity in the system.
Speaking in the same vein, John Iwuoforobserved that6 fiscal policies of the present administration should give priority to creating enabling environment for business development in the country. “The fiscal policies direction of the government needs to be restructured. For instance multiple taxations happening in the system does not augur well for attracting investors in the system. And the country needs to create jobs through activities of local and international investor,”he argued.
He also described the security threats of Niger Delta Avengers, North East region and South-East agitators as products of unemployment. Iwuofor also urged federal government to stop paying lip service to economic diversification, rather let pragmatic steps be taken to stimulate other sectors of the economy apart from oil.
“What happened to Kano pyramids in the North, cocoa plantations in the West and the robber, palm oil estates in the Eastern Nigeria?” he queried. He however admitted that President Buhari may have a good intention but lacks the economic ideas to bring the good intention to reality.
“Let Buhari assemble technocrats and drive home his economic policies and forget politicians who are only after what they will eat, otherwise they will mess him up.”

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