A Great Expectation Dashed

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THE administration of President Goodluck Jonathan held so much promise when it started in May 29, 2011. It also had so much goodwill from the masses who, for once in Nigeria, voted massively for somebody they saw as rising from a not so privileged background to the first job in the country.

Much was expected from the administration of the once shoeless Jonathan. His government showed some promise when it started with its assemblage of brilliant ministers who had an impeccable pedigree in places they have worked before abroad or in the country. But as the government winds down, that great expectation has been dashed to pieces. Even the taming of the perennial fuel scarcity in the country from 2011 to early 2015, which previous administrations failed to do, has come back in the twilight of the administration with such ferocity that the very economy of the country is being crippled. Much worse is that this is happening as the Jonathan administration hands over to General Muhammadu Buhari, president-elect, in the next four days. The atmosphere in the country right now is putrefied with some of the ministers in the eye of storm.

The obvious thing is that the incoming administration will be inheriting a weak economy and ministries that have been mired in unending controversy during the Jonathan years. The most affected are the ministry of finance and the petroleum resources, key ministries that are germane to the well-being of the country. The power ministry does not hold much hope either. Despite a successful privatisation of the sector, power outage has remained a challenge due to pipeline vandalism. This is happening despite the huge sums paid out to some amorphous security outfits to protect the pipelines which ferry gas to the power plants.

From the superficial look of things, the situation appears downright pathetic. The economic situation moved from bad to worse after the “successful” general elections despite the fact that the economy’s gross domestic product, GDP, is said to be growing at about 5 percent and one of the largest economy in Africa.  The deceleration in growth, which commenced in the third quarter of 2014, intensified in the first quarter of 2015 in the aftermath of declining crude oil prices.  The National Bureau of Statistics, NBS, estimated real GDP growth at 3.96 per cent in the first quarter of 2015, which is significantly lower than the 5.94 and 6.21 per cent in the preceding quarter and the corresponding period of 2014, respectively. Real GDP growth is projected to decline to 5.54 per cent in 2015 from 6.22 per cent in 2014. In line with trend, the non-oil sector remained the main driver of growth in the first quarter of 2015, recording 5.59 per cent. The key growth drivers in the non-oil sector during the period were services, trade, and agriculture which contributed 2.82, 1.27, and 1.05 percentage points, respectively.

The modest improvements recorded in the oil sector in the fourth quarter of 2014 appear to have been reversed as oil GDP contracted by 8.15 per cent in the first quarter of 2015 compared with an increase of 1.2 per cent in the preceding quarter. The year-on-year headline inflation crept upwards for the fourth consecutive month in April 2015. The inflation rate rose from 8.2 per cent in January 2015 to 8.5 per cent in March and further to 8.7 per cent in April. The increase in headline inflation in April reflected increases in both the core and food components. Core inflation rose to 7.7 per cent in April from 7.5 per cent in March, while food inflation increased to 9.5 per cent from 9.4 per cent over the same period. The uptick in inflationary pressures, year-to-date, according to the NBS, was largely traceable to transient factors such as high demand for transportation, food and energy, especially in the period around the general elections as well as the Easter festivities.  The Naira exchange rate has also depreciated to N200 officially compared to N165 to a dollar last year.  Other economic indices such are unemployment rate moved from 24 percent in 2014 to about 6.5 percent in 2015, even though underemployment is still very high, and so also is interest rates.

Suffice it to state that the management of the economy even though at a very difficult time of global economic headwinds and dwindling oil revenue has not impressed many Nigerians. That raises the questions of what went wrong with the egghead ministers and their good economic principle? Is it that the ministers did not do their jobs right or the “Nigeria Factor” that is their undoing? The answer is in the Realnews cover story for this week entitled: “Mixed Legacies of the Jonathan Ministers”. It was written by Olu Ojewale, our general editor.

Maureen Chigbo

Editor

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Tel: +234 8033487603, 8052528603

— Jun 1, 2015 @ 01:00 GMT

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