Nigeria’s economy is unhealthy at the moment. It is in critical condition and the symptoms are clearly manifested in high inflation rate, downward slide in the value of the naira against major currencies, massive job cuts and consequent high rate of unemployment leading to more Nigerians being downgraded to living conditions that are below the poverty thresh-hold of $2 a day. This condition was long time coming.
The previous administrations made some modest progress in the economy between 1999 and 2015 but failed woefully in two critical sectors; provision of adequate power and energy infrastructure- without which our economic foundation was faulty because it was built on quick sand.
The failure of the previous administrations to achieve self-sufficiency in power generation and distribution is a major set-back in our quest at import substation-industrialization. Nigeria’s power generation stands at maximum of 5000 megawatts leaving a deficit of 100,000 megawatts, after several years of multi-billion dollars’ massive investments is one of the biggest and unforgivable failure of the past PDP governments. Another critical issue, is that of perennial energy crisis. That Nigeria cannot refine its own daily need of petroleum and process its petro-chemical needs, because of poor infrastructure in the petroleum industry after sixteen years, is a major blight on the economic legacy of the past PDP administrations. For all of these short-comings the PDP was voted out of power and APC’s Muhammadu Buhari was elected in the historic 2015 elections.
The APC promised CHANGE and Nigerians eagerly embraced the party. This grand political coalition, first of its kind in Nigeria’s political history was helped a great deal by the internal wrangling within the then ruling PDP arising from Goodluck Jonathan’s violation of the zoning arrangement, which oscillates power between the north and south every eight years. Secondly the reputation of Muhammadu Buhari, the party’s presidential flag bearer was solid in integrity and incorruptibility; two qualities that were generally believed to be solution to Nigeria’s corruption-induced socio-economic problems.
Fifteen months after coming to power, Muhammad Buhari appears overwhelmed and clearly unable to tackle the many economic challenges confronting our dear country. His numerous policy initiatives are shallow and reactionary which seeks to address symptoms rather than causes thereby leaving the problem unsolved. Under this administration the economy has slipped into a recession with negative GDP growth rate of -0.36% in the first quarter of 2016, a considerable decline from 2.11% growth rate of fourth quarter of 2015. By the second quarter no growth was recorded.
This situation has effectively shrunk the Nigerian economy from a near 500-billion-dollar economy, the largest in Africa to about 420 billion dollars, second behind south Africa. The value of the naira has depreciated over 200% from 197 to 410 in just fifteen months. Inflation rate stood at all time high of 15.4% as at June this year. Rather than moving our country to greater progress and prosperity, the modest economic gains of the previous administrations have been practically eroded.
The failure of the Buhari administration to put in place workable policies to resuscitate the ailing economy, has clearly shown that it takes much more than integrity and incorruptibility to successfully lead a nation. It takes knowledge and wisdom-two qualities that have never been ascribed to president Muhammadu Buhari by friends and foes alike. It takes knowledge and wisdom to channel your integrity and incorruptibly positively for the common good of your country men. As a matter of fact, a shadow of doubt is cast upon the integrity and incorruptibility credentials of the president, because of his string of broken promises and clear sectionalism; which is the root of corruption. Nigerian’s were too engrossed with the obsession to kick out Goodluck Jonathan, without realizing the fact that the campaign promises of Buhari were hinged on three ambiguous words; “kwaraption, ekwanamy and skurity”, mere rhetoric without a detailed explanation of the “how” “when” and “where” deliverables.
The latest policy initiative of the Buhari administration is called “diversification of the economy”. A clear misnomer, because Nigeria’s economy is already diversified. Contrary to the opinion of the government the biggest contributor to the GDP is the services sector [ 54.6%] followed by industrial sector which includes a significant presence of oil and gas activities [ 25.7%] and lastly agriculture sector [17.8%]. That crude oil is the major forex earner for Nigeria does not mean that Nigeria’s economy is not diversified.
The challenge here is that our local industries and services providers are not competitive in the international market place for reasons of high cost of production arising from poor infrastructure in power and energy sector and other unfavorable government policies which doesn’t help to promote and build local industrial capacity. Regrettably nothing significant is being done in the direction to achieving sustainable economic recovery with growth and development.
The 2016 budget does not indicate radical move towards solidifying our modestly diversified economy. For example, a meagre sum of 47 billion naira, was allocated to agriculture ministry, an amount representing 1.25%, of the total budget. Solid mineral got an abysmal capital vote of 7.3 billion naira only. To the government, economic diversification means extra sources of income to support the luxurious lifestyle of the ruling elite class and the very source they have chosen is from the already impoverished masses.
Under the pretext of savings and cost cutting measures, in the face of dwindling crude oil revenue, subsidy was abruptly removed from pump price of petrol, to the delight of major oil marketers, contrary to the popular narrative and without any road map and timeline to resumption of local refining to meet domestic demands and export, thereby perpetuating our dependence on oversea refining with the consequent job exportation and pressure on our local currency which has further depreciated it.
This policy of total deregulation and removal of subsidy is not new. The PDP in the past sixteen has battled with Nigerians over removal of subsidy from PMS without success. This commodity is the important input Nigeria’s informal sector, which accounts for about sixty percent of our economy.
Therefore, it is a big betrayal of trust on the part of the CHANGE government to go ahead and remove subsidy from PMS, a much despised and resisted PDP economic policy which has further impoverished the masses. Today Nigerians pay more for less power in addition to the steep increase in personal income tax from 10% to 30% percent coupled with a disgraced naira, caused by an outdated forex policy. The result is the opposite of the professed intention of government. businesses are folding up and the existing diversified economy is giving way to no economy at all. Another policy which this government parades as an achievement is the full implementation of the Treasury Single Account TSA.
The initial intention of this policy was to migrate all the commercial bank accounts of revenue generating agencies of government into a single consolidated revenue account as required by the 1999 constitution as amended section 80. Other non-revenue generating MDAs were to follow in phases to avoid shocks to our financial system as a result of liquidity crisis. However, for reasons that are clearly more altruistic than pragmatic, major revenue generating agencies are yet to migrate into the TSA, because the heads; NPA [ Hadiza Bala Usman], NIMASSA [Dakuku Peter-side], FIRS [Tunde Fowler] AND dept. OF CUSTOMS AND EXCISE [Hameed Ali], are the protégés of the major powers behind the Buhari administration.
This is contrary to the original intentions of the policy. Whereas the government hurriedly migrated non-revenue generating and expenditure MDAs into TSA. These people are privileged to be certified “clean” and infallible and can be trusted with public money. The effect of this manner of TSA implementation is the liquidity squeeze currently been experienced in the banking and financial sector and, the bearish activity in government business transactions leading to a near collapse of small and medium scale enterprises. Nigeria is fast becoming George Orwell’s Animal farm where all animals are equal but some are more equal than the others because there are two sets of rules for two different sets of people in a clear case of double standards by the Buhari administration.
In the face of the negative effects of Buharinomics, Nigerians are being asked to sacrifice but the leadership class are not sacrificing at all. They keep blaming the past administrations for our current problems conveniently forgetting the reason they were elected was to solve the problem and not to complain. So much has been taken from the masses but too little from the leaders. The proceeds our collective sacrifice put at over 3trillion [proceeds from taxes and savings from subsidy removal] are been consumed recklessly by the political leadership class at all levels of government. The presidential fleet is still intact with over a dozen serviceable aircrafts at an annual maintenance cost of over 10 billion naira.
The cost of running the presidential office increased from 6.6 billion naira in 2015 to 18.1 billion naira in the 2016 budget. Another 3.62 billion naira is set aside for the purchase of BMW cars for unspecified purposes. The allocation to state house clinic alone ballooned to 3.8 billion naira in 2016 an amount more than the 2.2 billion naira budgetary allocations to all federal hospitals nationwide. Several billions of naira will be spent on recreation facilities, lighting and general renovation of the presidential villa.
The president also approved a bailout of about 480 billion naira to state governments to help pay backlog of workers’ salaries. This decision which was taken more out of political expediency than economic common sense. The idea was first proposed by the APC governor of Imo state Rocchas Okorocha and quickly supported by another APC governor of the almost failed state of Osun Rauf Aregbesola. they impressed it upon the president that their inability to meet up with their obligations to workers and other developmental projects was as a result of the substantial amount of money drawn from their treasuries which was used to bankroll his election in 2015. This largely explains why the bailout fund was misappropriated as workers are still not paid fully, because bail out for states government have been converted to re-imbursement to governors for out of pocket electoral expenses.
The governors like Oliver Twist have asked for more bailout funds and the president graciously approved another 90 billion naira to be diverted again to their personal purse. Some governors, hiding behind the veil of economic recession, have practically abandoned their responsibilities of thinking outside the box and working hard to improve the lot of their people and relocated to Abuja where they are enjoying the proceeds of their criminal conversion of the people’s common wealth.
The concept of Buharinomics have reduced most Nigerians to penury and abject poverty. This is expected from a government, which is notorious for sectionalism, which inevitably promotes mediocrity over competence and expertize. Sectionalism is the root of corruption. The most powerful unit of government is the kitchen cabinet. This is where programs of government, key and strategic appointments and general policy directions are decided. In this case the kitchen cabinet of the Buhari administration is dominated by the president’s friends and family drawn predominantly from his northern section of the country in a classic case of nepotism. Under such system, nothing can work properly, because the true intention of the government will be more self- serving than for the purpose of the common good of Nigerians because members of the kitchen cabinet cannot work against a system that produced them.
Majeed Dahiru
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