What Is President Buhari doing with the economy? LET me start by asking an important question: who wants to kill racy introspection? There is a cacophony of voices telling the Muhammadu Buhari administration to close its eyes to the past, that given the enormous tasks that lie ahead, history and its consequences for our nation should be the least of the government’s preoccupation at this juncture.
I disagree. Let us keep a fiery memory of the past so that we don’t repeat its mistakes. Look back, look ahead. The future must of necessity be built on the foundations of the past.
The Conservative Party took power in Britain six years ago from Labor. Check the British press, they are talking about Labor 24/7. Is anyone complaining?
Japheth Omojuwa, one of Nigeria’s top three influencers seemed tasked in his patience reacting to calls that we must stop talking about the immediate past administration in this country. “People are still talking about who ran governments in 1865 you want us to forget those who left government last year? (Expletive).”
Music icon Fela Anikulapo Kuti who many agree was a philosopher disguised as Afro-musician taught in one of his songs that without knowing where you are coming from, you won’t know where you are going. Wise men say that the empty can doesn’t disappear by simply kicking it down the road.
To avoid repeating the past mistakes, Nigerians must come to terms with what went wrong with the past, how bad were things, what was done wrongly, what the past government should have done, before we come to what needs to be done to right those wrongs. Believe me, episodes from the Jonathan era can fill books, and other possibilities such as courtroom drama thriller.
Against this backdrop, I sought to hear our erudite Finance Minister Kemi Adeosun on where we are coming from, vis-a-vis the administration’s chosen path to recovery and accelerated growth. What is the administration doing to revitalize the economy? She spoke at length on the many measures being put in place, many of which are not glamorous. They, of necessity, come with pain. Why should Nigerians be asked to endure pains? Why should they be asked to make adjustments?
The simple explanation is that the economy was broken, and just as they do the broken leg, you must bear the pain of fixing it. The current situation was caused by years of mismanagement and corruption.
As explained by President Buhari again and again, trumpeted by Madam Adeosun and other senior officials, we solely relied on oil, the price of which was as high as US$140 per barrel. Government simply reticulated oil revenue through personal spending by corrupt leaders, wasteful expenses and salaries. This was done rather than investing in what would grow the economy.
Economies grow due to capital investment in assets like seaports, airports, power plants, railways, roads and housing. Nigeria has not recorded a single major infrastructural project in the last 10 years. In short the money was mismanaged. In addition to failing to spend money on what was needed, no savings were made by Government unlike other countries like Qatar, Saudi Arabia and Norway.
To compound the problem, the previous government was borrowing heavily and owed contractors, and international oil companies. When this government took over we had accumulated debt back to the level it was before the Paris Club Debt Forgiveness.
All these factors were building up to Nigeria heading for a major crisis if the price of oil fell. Nigeria did not have fiscal buffers to withstand an oil shock.
The oil shock should and could have been foreseen. These are matters that both the Emir of Kano, Muhammadu Sunusi 11 and Professor Chukwuma Soludo, both them eminent former Central Bank Governors had occasions to warn the government of the day about, but they were clobbered. The dire warnings were written all over the wall, but they were ignored by Nigeria’s economic managers.
What should they have done?
They should have had the courage and vision to do as the present administration is doing through the Economic Team, the Ministry of Finance under Madam Adeosun and the various agencies of the state to envision a better future by first of all fighting corruption. Look at what a civilian administration is today doing to military, investigating their finance and accounts that the military could not do to themselves.
See what the current administration is doing sanitize the huge salary bill by eliminating payroll fraud. So far, the federal payroll has been rid of about 40,000 ghost workers. More than eight billion Naira stolen monthly has been saved. We are also saving on wasteful expenses like First Class Travel and Private jets for official trips.
The federal government is not limiting the reforms to the center but forcing State Governments to reform their spending and build savings or investments. Government is also increasing spending on capital projects especially on infrastructure needed to make Nigerian businesses competitive and create jobs. The administration is at the same time blocking leakages that allowed government revenues to be siphoned into private hands.
Currently, there is focus on key sectors ( apart from oil) that can create jobs and or generate revenue such as Agriculture, Solid Minerals and Manufacturing. If these things had been done when the oil price was as high as US$140 per barrel, Nigeria would not be in the current predicament. We would not be suffering now if we had no cash reserves but we had regular supply of power, a good rail system, good roads and good housing.
Now that the oil has fallen as low as US$28 per barrel, it is very difficult to do what is needed but they must be done to save Nigeria. There is no other way if we want to be honest. If PDP were still in power they would have continued deceiving people, by borrowing to fund stealing and wastage and the problem would have simply been postponed for future generations to face.
There are many who say that this Government’s economic strategy is unclear whereas the previous government seemed well co-ordinated. I will make the confession that we, the officials hired to communicate government policies, that includes myself, have not done as well as we should have.
The truth is that more than any other time before, there is a clear direction and strategy for achieving growth and development. Revisionists may not agree, but the truth of the matter is that the previous administration only had one issue, which was how to spend money ( oil revenues and borrowed money).
As mentioned earlier this spending was focussed on the wrong things and even though the economy seemed to be growing it was not sustainable, it was, as described by Minister Adeosun, a classic “boom and bust”’ driven solely by the oil price.
Unemployment was and remained high (never forget the NIS jobs that exploited thousands of desperate graduates in a scam that was used to fund house purchases in high brow areas and claimed so many lives)
Inequalities were growing (our then President boasted about Nigerians having the highest number of private jets when most Nigerians could barely afford to eat).Terrorism and social unrest were growing. Real development was lacking. As soon as the oil price fell, these vulnerabilities were exposed.
From its records so far, this administration is trying to reset the Nigerian economy and ensure that it attains its potential and is diverse and resilient. We are doing this at a time when the global economy is in crisis due to the oil price collapse. Even rich nations like Saudi Arabia are experiencing problems.
The Government is people- oriented, focussed and wants the economy to grow in a way that will create a more stable future which is not dictated by world oil prices ( over which we have no control). No more boom and bust ( thanks Minister Adeosun).
Nigeria wants to take responsibility for its own destiny, therefore our policies will ensure that Nigeria returns to growth in a sustainable manner. No more dependence on oil. Every part of Nigeria has a role to play in contributing to our growth. We will create an environment where people can thrive and where business can grow.
To this effect, all relevant agencies have been reoriented to: Focus government spending on infrastructure which will create jobs and opportunities for Nigerians across a number of sectors( not just oil).
Ensure that we reduce our reliance on oil by developing other revenue streams such as taxes, efficient customs collections and other government revenues. Develop key sectors in which we have comparative advantage. Encourage development of agriculture to ensure food security for our huge population. Develop petro-chemical industry on the back of the oil industry.
Develop solid mineral extraction and Develop light manufacturing to provide locally made basic needs and reduce importation. If you are an official of this administration and a mixer, that is someone who mingles with citizens high and low, a charge you are forced to defend is that this Government seems to be bringing austerity and suffering to the people. Blame not, Buhari.
The current pain is due to the mismanagement of the past. What Nigeria is currently experiencing was inevitable. This government is simply being honest with the people instead of piling up debts and concealing the truth by pretending all was rosy. This government believes that Nigerians deserve to know the truth.
People stole unbelievable amounts of money. The kind of money some of these ex-officials hold is itself a threat to the security of the state. Since it is not money earned, they feel no pain deploying it just anyhow to thwart genuine and government good efforts.
What we are doing
Sadly, even that which was not stolen was wasted. Government coffers were left empty, with huge debts unpaid and unrecorded (this government is working to quantify the amount owed). Even the current high food prices can be traced to past deceit.
For example, The previous government purchased fertiliser in 2014, worth N65Bn and left the bill unpaid. In 2015 the suppliers could not supply fertiliser which resulted in a low harvest, shortages and high food prices. This government had to pay off the debt so that the suppliers could begin to supply fertiliser again. Across Nigeria a green revolution is occurring as Nigerians are going back to the farms, from rice in Kebbi and Ebonyi to Soya and Sesame in Jigawa and Kano. At the same time Nigerians are looking inwards to identify commercial opportunities from agri businesses.
Most of our road contractors had not been paid since 2012, many of them had sent their workers away adding to the unemployment problem. This government has released capital allocations in the last three months that is more than the whole of 2015. In 2015 Nigeria spent a paltry N19Bn on roads, in three months we have spent N74Bn and we are already releasing more.
In the transport sector in 2015, government spent just N4.2Bn we have spent N26Bn with more to follow. We are starting a concession that will revive our old rail system for freight, whilst we build a new high speed rail system. Moving heavy goods by rail will reduce our transport costs which will reduce food prices and will save our roads from damage from heavy loads. Government will embrace the private sector through PPP, concessions and other collaborations to deliver services and infrastructure efficiently.
Nigerians expected a lot from President Buhari and are right to have done so. Many feel disappointed. While much of this warranted, a lot more is arising from opposition politics. A man who has promised good things is being accused of failing to use the palm to cover the sun or that he is unable to stop the rain. Nigerians are right to be disappointed but they must direct their anger at the right quarters. The bad management and corruption of the past are firmly to blame.
This government is fighting corruption. It is working hard to do things right and do them in a manner that will endure. No government has ever considered the poor like this one. Under the current budget, the administration devoted N500Bn for social intervention programmes for those who need and deserve support.
There are also programmes for affordable housing with mortgages which will transform thousands from tenant status to home ownership.
Let’s look ahead
Any process that will endure, must involve some pain but things will begin to improve. There is always a time lag between policy and effect. That is why the bad effects of past policies are manifesting now. Similarly the positive impact of the work being undertaken to fix Nigeria’s problems will soon begin to show and we will emerge from this period stronger, wiser and more prosperous.
There is hope for Nigeria, a hope that was previously clouded by corruption, greed and lack of focus. Nigeria is starting over and everyone has a role to play. Look back, look ahead.