BUHARINOMICS: WHAT GAINS AFTER THE PAINS?

Spread the love

President Muhammadu Buhari

President Muhammadu Buhari is a good man. Millions of Nigerians believed so in 2015 and passionately pushed and voted for his candidacy. A vocal section of the media swore by his name that Buhari was the messiah Nigeria needed to wipe out corruption and set the nation on the path of a proud nationhood, economic progress and social harmony. The groundswell of overwhelming positive public opinion ricocheted around the world as leaders of powerful nations were in support that Buhari would do a good job. Indeed, months after he took over, Barack Obama, the then US President was famously quoted as saying that President Buhari was ‘doing a good job’.

Almost 2 years down the road however, the romance appears to be over as the reality belies the expectations and President Buhari’s fan base is fast depleting due to perceived non-performance in the areas of economic empowerment and social harmony and yes, even in the fight against corruption. There have been massive cases of lay-offs in all key sectors, eroding per capita income and extremely weakening purchasing power of Nigerians, while systemic corruption is on the rise. Provincial economies are also threatened as farmers across the country are being killed in their hundreds by rampaging and allegedly faceless Fulani herdsmen. This is not the vision that Buhari’s base had worked so hard and looked forward to.

For majority of Nigerians, the first 2 years of the Buhari presidency has been painful, tearful and even brutish. The Naira plummeted from 185 Naira to an all-time low of 525 Naira to the Dollar in the first quarter of 2017 bringing tears, sorrow and pain to genuine manufacturers, SMEs and consumers while enriching a select few in the corridors of power and their cohorts in the business and banking and finance sectors.

Nigerians protesting the economic hardship

In early February 2017, Nigerians were tired of lamenting the dire economic conditions in their rooms. So, riding on a ‘One Voice Nigeria’ platform, Nigerians from all walks of life poured out onto the streets to vent their anger in major cities including: Lagos, Abuja, Port Harcourt and Ibadan. The assurance by then Acting President Yemi Osinbajo that the government understood their pain and grievances did little to assuage their feelings.

Former CBN Governor, Professor Chukwuma Soludo, painted the grim picture eloquently in several fora across the country recently when he said that Nigeria’s economy did not just slide into recession under the Buhari administration but rather went into compression if the parallel market rate was used to analyse the economy. He said that the situation called for a state of emergency with a progressive plan to lay the foundation for a post-oil economy. He posited that the foreign exchange control had damaged business confidence and private investments, with massive capital flight, weakened the macro economy into recession making most macro variables worsen in the last two years; the inflation rate increased by about nine per cent to about 19 per cent, unemployment from 7.5 per cent to 14 per cent; “Market capitalisation of the Nigerian Stock Exchange reduced from N11 trillion to about N8.65 trillion while “Poverty is escalating and the youth agitation increasing,” he added.

“Paradoxically, Nigeria’s rank on the corruption index remains unchanged at 136th position, while its ranking on the Fragile States Index has worsened. “We are now in the red alert category of fragile states. Many economic agents had lost count of how many exchange rates operates.”

According to Soludo: “We would get out of recession any moment from now, with oil price increasing. But it would be a miracle if the government is able to return the GDP in US dollar terms to the level it met it, even by 2023.

Hajiya Aisha Muhammadu Buhari publicly denounced her husband;s poor performance on the economy

Buhari seems to have fallen short on his campaign promises but many still believe that President Buhari is a good man. Only recently, after battling an undisclosed ailment in the UK, president Buhari sought to win back his waning love from Nigerians by formally launching an economic recovery plan that he has vowed will change Nigeria for good. President Muhammadu Buhari on Wednesday, April 5, 2017inaugurated the Economic Recovery and Growth Plan (ERGP) 2017-2020 with a call on Nigerians to support its smooth implementation to change Nigeria for good. This is coming almost 2 years after he took office!

President Buhari assured Nigerians that with its inauguration, his administration was approaching the solution to the nation’s economic challenges with the same will and commitment it had demonstrated in the fight against corruption, terrorism and militancy. The ERGP according to the president brings together all the sectoral plans for agriculture and food security, energy and transport infrastructure, industrialisation and social investments together in a single document.

President Buhari said the document “builds on the Strategic Implementation Plan and sets out an ambitious roadmap to return the economy to growth; and to achieve a seven per cent growth rate by 2020. He noted that the plan will “set out what we, as government, are committed to do, to create the enabling environment for business to thrive. The plan is a national plan; hence the role of state governments is critical to its success. He appealed to state governments to “draw inspiration and strategic direction from the plan to articulate their economic programmes, particularly in the development of the real sector.

Udoma Udo Udoma, Budget and Planning Minister

He further called on Nigerians: “to ensure we achieve those objectives. The contents of the Plan are already familiar to a broad cross-section of Nigerians because it was developed in consultation with a wide group of stakeholders, including the National Assembly, State Governments, the business community, labour unions, academia, civil society groups and development partners.” He reiterated the determination of his administration to change Nigeria from an import dependent country to a producing nation.

President Buhari further stated that Nigeria must become “a nation where we grow what we eat and consume what we produce. Our aim simply put, is to optimise local content and empower local businesses. We seek not just to take the Nigerian economy out of recession but to place it on a path of sustained, inclusive and diversified growth.  “We must become a nation where we grow what we eat and consume what we produce. We must strive to have a strong Naira and productive economy.”

To many Nigerians the ERGP launch speech was excellent on sound bites and lofty ideals but it was considered yet another hollow ritual as they believed that though president Buhari has always meant well for Nigerians, the only challenge has been the truncation of his best intentions and plans by elements within his inner circle and powerful local and foreign interests for perceived selfish interests.

Mr. Godwin Emefiele having a rough time with FOREX issues as Naira slides to worst-ever low

When the president resolutely refused to devalue the Naira and rather restricted CBN’s FOREX from certain luxury items and some products that could be better produced locally, it was the Economist magazine of UK that spear-headed a tirade and campaign against the policy. These items included: Rice; Cement; Margarine; Palm kernel/Palm oil; even tooth-picks Tomatoes/tomato pastes which we have the capacity to produce abundantly.

Ultimately, subterfuge by big time foreign and Nigerian traders and lack of diligent implementation by privileged officials of various agencies of government led to abuse and ultimately a capitulation where a curious FOREX policy was thereafter introduced by the CBN with allegedly countless different exchange rates and thus led to a free fall of the Naira to an unprecedented 525 Naira to the Dollar in quarter one of 2017. Yet the Bretton wood agencies insisted that the Naira was still over-valued! For a president, who promised to make the Naira exchange 1 to 1 with the Dollar, this must have been nothing short of a nightmare. But not so for a lot of unscrupulous officials and businessmen who exploited the loose system to make stupendous and undeserved wealth for themselves.

Emir Sanusi of Kano has been critical of President Buhari’s economic performance

The Emir of Kano, Muhammadu Sanusi ll (and former CBN governor) had originally raised the alarm over the policy implementation of FOREX at the 15th Joint National Council on Development Planning meeting held in Kano in August 24, 2016 when he said: “We have created our own billionaires since 2015 from foreign exchange subsidy,” In his speech titled “Nigeria: The search for new growth model.” He said: “For instance, when the CBN was selling dollar at N197 and people were buying at N300, if I sit down in my garden and pick up my phone I would have enough people to call in the industry to get 10 million dollars at official rate and sell at N300 and make a profit of over N1bn and if I do that four times in a year, for doing nothing I would have earned N4bn. Surely, the esteemed Emir must have been shocked at what followed subsequently as the Naira nose-dived even further.

Again, shortly after President Muhammadu Buhari launched the Economic Recovery & Growth Plan (ERGP 2017 – 2020), Emir Sanusi posited that the President’s economic model cannot work. Sanusi said this is because the Federal Government is borrowing unsustainably. He noted that Nigeria is spending 66 per cent of its revenues to pay interests on debts and as such the model would fail. Sanusi said: “The Federal Government of Nigeria is spending 66 per cent of its revenues on interests on debts, which means only 34 per cent of revenues is available for capital and recurrent expenditures. “That model cannot work. If you look at the 2017 budget of the Federal Government, I sometimes wonder what Nigerian economists are doing? In the 2017 budget presented by the Federal Government, the amount earmarked for debt servicing is in excess of the entire non-oil revenue of the Federal Government, but that is not the problem. The problem is that it is a budget that is even going for more debts.”

He said at this stage, government at all levels should realise that borrowing is no longer an option and should, therefore, look for ways to attract investments. “Growth can only come from investments. It cannot come from consumption.  It cannot come from government balance sheet. It cannot come from borrowing because you cannot borrow unsustainably.” The CBN had however earlier insisted the the TSA inflows cover the borrowings of the federal government from the CBN.

Sanusi also berated the idea of the government borrowing money from China: “We have governors; they go to China and spend one month on a tour and what do they come back with, MoU (Memorandum of Understanding) on debts. “China will lend you $1.8bn to build light rail. This light rail will be done by the rail workers from China. The trains will come from China. The engines will come from China. The labour comes from China. The driver is Chinese.

“At the end of the day, what do you benefit from it? Your citizen will ride on a train and when you ride on a train, in northern Nigeria, in a state like Kano or Katsina, where are you going to? You are not going to an industrial estate to work. You are not going to school?  You are not going to the farm. You borrow money from China to invest in trains so that your citizens can ride on them and go for weddings and naming ceremonies.”

Well-meaning Nigerians must sympathise with Buhari. The president himself lamented early in his administration that he wished he had become president at an earlier age, citing the enormity of the dictates of the office. As if that was not bad enough his health deteriorated early in his administration. The president must have entrusted some key aspects of governance to close and trusted aides. But these aides have been tagged ‘the cabal’ in Aso Rock who do not know the APC vision, nay the President’s mission and have contributed to the poor performance of the Buhari administration due to selfish interests or incompetence or both. No less a personality than the wife of the President herself, Hajiya Aisha Buhari voiced this concern when in October 2016, she cried out that an ‘evil cabal’ in Aso Rock had hijacked Buhari and his administration. In an unprecedented interview with BBC Hausa Service, Hajiya Aisha Buhari lamented that members of the evil cabal were usurpers who did nothing to help the APC struggle in 2015 and therefore know nothing of the APC or Buhari’s change agenda which explains the below par performance. She ventilated so much frustration that she vowed she would not campaign for the 2019 for her husband if he did not checkmate the cabal and stop the drift.

A leaked letter to the President from the Governor of Kaduna state, Mallam Nasir el-Rufai also lamented that “the APC federal government had failed even in mundane matters” due to the activities of this cabal and strongly advised the president to take the reins of power from them lest they ruin the country and mess up his legacy.

The great wonder that must be going through the minds of Nigerians and keen observers is how does a president with such enormous powers under the Nigerian constitution appear so helpless under a cabal?

As Nigerians grope in the throes of economic pains and the shadows of doubtful economic direction, many wonder why the president would not draw on the strengths of his Vice President, Professor Yemi Osinbajo who many have attested did a fantastic job as acting president for 57 days while the president was away on medical leave in the UK. Under him the value of the Naira began to rise significantly, there was a rapprochement with the Niger Delta militants, herdsmen’s activities were curtailed and there was a clear sense of urgency in the running of government affairs.

If indeed a cabal is the cause of our economic woes, the time for the president to act and dismantle it is now as the pains keep increasing and spreading. The buck stops with President Muhammadu Buhari. Nigerians expect him to quickly replace this yoke with economic emancipation, growth and progress. That is the only way Buhari can remain a good man, in their eyes forever.


Spread the love