Politics
Despite the promises made by Muhammadu Buhari to fight corruption, terrorism and hopefully reconstruct the values of a people gone astray on May 29, 2015 during his inauguration as Nigeria’s President, it is unfortunate that he is bequeathing a nation battling extreme macroeconomic challenges, galloping inflation, currency depreciation, foreign exchange illiquidity, high energy cost, heightened insecurity, weakening purchasing power, structural bottlenecks, trade facilitation issues to the next administration.
By Goddy Ikeh
FOR millions of Nigerians, the scorecard of the out-going President Muhammadu Buhari and his administration is a mixed bag of achievements and failures, especially as he promised Nigerians and the international community on May 29, 2015 that he would bring “increased prosperity” to Nigeria.
Buhari, who has to his credit of being the first opposition politician and former military leader to win a presidential election in Nigeria since independence in 1960, also pledged during his inauguration that “I belong to everybody and I belong to nobody” to the admiration of millions of Nigerians.
As expected, Buhari also vowed to tackle “head on” the issues of corruption and the insurgency from militant Islamist group, Boko Haram.In his inaugural speech, Buhari reiterated his commitment to tackle Boko Haram insurgents, describing them as “a mindless, godless group, who are as far away from Islam as one can think”. According to Buhari, Boko Haram could not be said to be defeated without rescuing more than 200 Chibok girls, whose capture in April 2015, sparked a global campaign to bring them back home. “This government will do all it can to rescue them alive,” the BBC report on the inauguration quoted Buhari as saying.
According to the report, Buhari said that the Nigerian economy was “in deep trouble”, identifying “insecurity, pervasive corruption… and seemingly impossible fuel and power shortages” as key concerns to Nigerians. According to him, the country’s power supply crisis was “a national shame”, which had brought “darkness, frustration, misery, and resignation” to Nigerians.
Unfortunately, at the end of his first tenure in office in 2019, very little was achieved and he was presented with another opportunity to redeem himself, having won his reelection for another four years. According to some political analysts, following the poor showing in the first four years, Buhari and the ruling APC came up with the vague slogan of taking Nigerians to the “NEXT LEVEL” during their campaign for the second term in office. Perhaps, Nigerians in their slogan of “Suffering and Smiling” and like its done in most elementary schools across the country to give a pupil, who fails a promotion examination another opportunity to repeat the class, and they voted Buhari and the APC for a second term.
As the count down to the end of the second term of Buhari and his administration begins, it is expedient to examine some of the achievements and failures of the Buhari administration and “the enduring legacies if any” of the eight years of the 80-year-old Army General turned politician.
Despite the outcry of millions of Nigerians on the pains inflicted on them by harsh economic environment in the last eight years of this administration which some have aptly described as “locust years” and the appeal by President Buhari for forgiveness, the media and publicity unit of the federal government has come out with a fact-sheet millions of Nigerians will gloss over as far from reality as their lives were never impacted by these records.
For instance in the power sector, the government has not moved away from projections when the population in groping in darkness and the manufacturing sector lamenting the high cost of production due to poor power generation and high cost of diesel. According to the factsheet, an incremental 4,000MW+ of power generating assets will be completed during the life of the Buhari Administration, including the Zungeru Hydro, Kashimbila Hydro, Afam III Fast Power, Kudenda Kaduna Power Plant, the Okpai Phase 2 Plant, the Dangote Refinery Power Plant and others.
There are also plans of “taking clean and reliable energy (Solar and Gas) to Federal Universities and Teaching Hospitals across the country.
Taking clean and reliable energy (Solar and Gas) to markets across the country. Completed projects include Sabon-Gari Market in Kano, Ariaria Market in Aba, and Sura Shopping Complex in Lagos. Energizing Agriculture programme and embarking on National Mass Metering Programme to rollout electricity meters to all on-grid consumers.
But power data from the Nigeria Electricity System Operator, NESO, February 23 to February 27 showed that on February 23, power generation peaked at 4, 801.10 megawatts, and energy sent out on that day was 109,726.07 megawatts per hour. On February 24, power generation peaked at 4,790.20 megawatts, energy sent out on that day was 108,991.75 megawatts per hour.
On the Digital Economy and Oil and Gas sectors, the score sheet stated that Nigeria’s GDP was boosted by the digital economy in the second quarter of 2021 with 17.92 percent, contribution to GDP and again topping this in the second quarter of 2022 with 18.44 percent. It added that extension of the Nigerian Investment Promotion Commission (NIPC) ‘Pioneer Status’ to e-Commerce and software development companies.
On the oil and gas sector, it stated that President Buhari’s assent to the Petroleum Industry Act on August 16, 2021 broke a two-decades-old jinx and is setting the stage for the unprecedented transformation of Nigeria’s oil and gas sector. Under the new Act, the NNPC has transformed into a Limited Liability Company which has been unveiled by the President in July 2022.
But the World Bank and the organized private sector have a different assessment of these sectors. According to the Nigeria’s Economic overview by the World Bank, high oil prices since 2021 did not boost the performance of the Nigerian economy as has been the case in the past. Rather, macroeconomic stability weakened, amidst declining oil production, a costly petrol subsidy which is consuming a large share of gross oil revenues, exchange rate distortions, monetization of the fiscal deficit, and high inflation.
It noted that the deteriorating economic environment is leaving millions of Nigerians in poverty. On current trends, with Nigeria’s population growth continuing to outpace poverty reduction, the number of Nigerians living below the national poverty line will rise by 13 million between 2019 and 2025.
For instance BudgIT, a foremost civic-tech organisation leading advocacy for transparency and accountability in Nigeria’s public financial management, expressed concerns over the poor fiscal performance of the Nigerian government’s 2022 budget and the growing subsidy payments.
According to BudgIT, the most pressing concern is the debt service-to-revenue ratio, which has reached alarming levels within the first four months of 2022. The organization said that the country’s current debt service, which stood at N1.94 trillion from January – April 2022, was over 100% of Nigeria’s revenue, which was N1.64 trillion, within the same period.
This is in spite of warnings given by the International Monetary Fund, IMF, that Nigeria would be spending over 100% of its revenue on debt service in 2026. Unfortunately, those predictions are Nigeria’s current realities.
BudgIT, however, stated that, with 2022 being a pre-election year, alongside the growing fiscal threat posed by subsidy payments and the debt service-to-revenue ratio; all the latter will negatively impact Nigeria’s budget credibility, cripple service delivery in critical social sectors of the economy and impede needed investments in productive sectors, thereby stunting economic growth. In the same vein, the Manufacturers Association of Nigeria, MAN, also warned that a shutdown of manufacturing activities is imminent if nothing is done to address the soaring cost of energy bedeviling the sector.
According to a statement by the Director-General of the association, Segun Ajayi-Kadiri, over the years, the manufacturing sector has been battered by numerous challenges, which have reduced the number of industries in Nigeria and converted industrial hubs in many parts of the country to warehouses of imported goods and event centres.
The organization lamented that the impact of certain policies of government has been impacting negatively on the manufacturing sector and called for a policy that would urgently allow companies and airlines to import diesel and aviation fuel respectively from the Republic of Niger and Chad.
MAN also said that by immediately opening up border posts in that axis for this purpose, the effect of high diesel and aviation fuel prices would be cushioned on the economy.
The association also called for help in saving the remaining manufacturing companies from closing down as a result of challenges arising from the inadequate electricity supply, inaccessible foreign exchange, and a rise in the cost of diesel.
Ajayi-Kadri said there were uncertainties and fear of survival of firms, and expressed fear of a force majeure over increasing diesel prices by 200 per cent. “More worrisome is the deafening silence from the public sector as regards the plight of manufacturers,” he said.
The association identified challenges such as high operating cost environment largely caused by inadequate electricity supply, the high cost of alternative sources, excessive regulation and taxation, as well the inadequate supply of foreign exchange for the importation of raw materials, spare parts, and machinery that were not locally available.
The Lagos Chamber of Commerce and Industry (LCCI) also expressed concerns that the Nigerian economy might decline to stagflation, which would negatively affect production cost and dampen growth in the medium term.
In a statement on Nigeria’s Economic Growth Performance by the Director General of LCCI, Chinyere Almona, ahead of the 2023 polls, stated that the country’s economy had continued to struggle with many inhibiting burdens, like inflation, weak revenue generation, degenerated infrastructure, forex challenges, and unsustainable cost profile seen in debt services and subsidy payments, and the daunting threats of insecurity.
“The chamber is concerned that if we continue in this trajectory, the economy may bleed away into a stagflation, which will impact on production cost, job losses, worsened forex crisis, and dampened growth in the medium term.”
Almona advised the federal government to sustain its targeted interventions in designated critical sectors, like agriculture, manufacturing, export infrastructure, and tackling insecurity, as well as free more money from subsidy payments.
She added that it was worrisome that the 2023 budget indicated that there might not be any significant allocation to capital projects. The LCCI director-general urged the government “to tackle oil theft to earn more foreign exchange, borrow from cheaper sources to reduce the burden of debt servicing, and take a decisive step towards removing fuel subsidies.”
The chamber also urged the government to continue with its non-oil campaigns and interventions to sustain the targeted financing towards boosting non-oil export for enhanced foreign exchange earnings. But there are still concerns over the issues of insecurity, rising inflation, massive increase in the country’s petroleum subsidy liabilities, debt of over N41.6 trillion, drop in foreign direct investments inflow and increased the cost of doing business.
However, Prof Charles Soludo, the current Governor of Anambra State, would not be surprised at the poor economic scorecard of the Buhari’s administration. In a lecture he delivered on November 19, 2015 at the Realnews Annual Lecture series, Soludo stated that on the economy, it would not be an easy transition for President Buhari. Quoting an Igbo proverb that states that one does not learn to use the left hand at old age, but that his prayer was that for the sake of Nigeria, Buhari would have to do so and quickly too.
However, Prof Charles Soludo, the current Governor of Anambra State, would not be surprised at the poor economic scorecard of the Buhari’s administration. In a lecture he delivered on November 19, 2015 at the Realnews Annual Lecture series, Soludo stated that on the economy, it would not be an easy transition for President Buhari. Quoting an Igbo proverb that states that one does not learn to use the left hand at old age, but that his prayer was that for the sake of Nigeria, Buhari would have to do so and quickly too.
“Reducing uncertainties and cost of doing business as well as maintaining macroeconomic stability remain critical first steps. We must avoid ‘state overload’. In a regime of weak institutions, entrusting the bureaucracy with excessive discretion to pick winners is a breeding ground for corruption and crony capitalism. From Nigeria’s political economy and experience so far, it needs to become a slogan that “government in business is bad business,” he warned.
Soludo, who was later named as a member of the most dazzling collection of economic experts, policymakers assembled in Nigeria in decades as economic advisory team, in the second term of the administration, also advocated the fixing of the broken public finance, which he described as “the elephant in the room”. “I don’t envy our new Minister of Finance who must fix the public treasury. As I listen around, I can hear a sonorous song by all the governments in response to the current crisis and its popular refrain is: ‘give us more money to spend’! Given the short-term electoral cycle, it is evident that most governments want to avoid the painful adjustments required to put back their public finance on a path of sustainability because that could offend voters and make them unpopular,” he said, adding: “We must plan for the long haul and also keep an eye on the balance sheet of the central bank and commercial banks vis-à-vis public debt. I worry more about the crowding out of the private sector as governments compete with it for debt.”
Unfortunately, Buhari will be leaving office with most of the promises made in 2015, largely unfulfilled. For instance, be bequeathing the economy that is “in deep trouble”, rising insecurity and killings, pervasive corruption and seemingly impossible fuel and power shortages and worse still a highly broken, divided and polarized nation to the next administration. In addition, Most of the Chibok schoolgirls, other school children and hundreds of men and women adopted during his eight-year tenure have not been rescued.
However, in spite of the poor scorecard of the Buhari’s administration, its record of huge investments in infrastructure, especially the rehabilitation of major highways and airports and the completion of the Abuja – Kaduna rail line as well as the completion of the second Niger Bridge are worthy and enduring legacies for Buhari and his administration.
A.
Tags: President Muhammadu Buhari
