How Buharionomics is deepening poverty in Nigeria

That the Buhari administration came in to office and has continued to govern through propaganda is not in doubt. As I have argued on this page several times, the anti-corruption propaganda is one that is difficult to resist, even by the enlightened – and the president is still intent on using it to drive his re-election campaign. That is why the government and its spokesperson have been speaking as if they live in a different reality from ordinary Nigerians. They generally do not see what ordinary Nigerians see. What is more, they will claim credit for the ridiculous and absolve themselves of all blame for anything that goes wrong, blaming instead the previous government and corrupt individuals/politicians attempting to torpedo the anti-graft reforms of the administration.

You can then understand the government’s consternation with international organisations like Transparency International, especially, for pooh-poohing the administration’s fight against corruption just months before the 2019 elections. But even more embarrassing to the government is the Brookings Institution’s report of the World Poverty Clock’s estimation that Nigeria has overtaken India (a country with over 1 billion population) as the poverty capital of the world. According to the report, 87 million Nigerians are living in extreme poverty compared to India’s 73 million. What is more, the report estimates that extreme poverty in Nigeria is growing by six people every minute, while poverty in India continues to fall.

Pronto, the government rolled out its propaganda machines to counter the report. First, Minister of Budget and National Planning, Udoma Udo Udoma said the study was not properly conducted.

“The Ministry has reviewed this report and would like to assure Nigerians that the report is not based on any recent surveys of the poverty levels in Nigeria and cannot be relied upon as a factual indication of recent trends in Nigeria,” a statement from the minister read.

It continued: “In line with extant laws, the National Bureau of Statistics (NBS) remains the statutory agency of government with responsibility for producing Nigeria’s official statistics, including poverty estimates.”

But the same National Bureau of Statistics, since 2016, estimated that no fewer than 112 million Nigerians live below the poverty line. But, of course, Udoma doesn’t care for the truth.

Next was Okey Enelama, the minister in charge of industry, trade and investment. For Enelama, the report itself is “lagging in indicators which means, people are reporting history.” He then reassured:

“What I can tell you, with certainty based on one’s background in business and economics, is that if we complete the things on infrastructure and you implement these reports we are doing, that is what I mean by a leading indicator, poverty will go down.”

But Enelama lied miserably. According to the Institution, the World Poverty Clock data are updated “each April and October to take into account new household surveys (an additional 97 surveys were made available this April) and new projections on country economic growth from the International Monetary Funds’s World Economic Outlook. These form the basic building blocks for poverty trajectories computed for 188 countries and territories, developed and developing, across the world.

But does Enelama care for the truth? Isn’t it all about propaganda?

But it is not difficult to see how the shambolic economic management and agricultural policy of the administration are combining to throw millions of Nigerians into extreme poverty.

On coming into office in 2015, the president immediately sought to control both forex demand and supply at the same time. Admittedly, the naira was under intense pressure since 2014 as a result of the slump in oil prices and the huge gap between the country’s receipts and imports. But rather than allow the CBN and the monetary policy committee to perform their statutory functions, the president jumped the gun ahead of the CBN and declared that there shall be no further devaluation of the Naira.

The CBN was then forced to roll out various kinds of policies – including placing some items on import prohibition list, to protect the beleaguered Naira. That rough policy created massive winners and losers and (the winners being, of course, the rich and connected while the poor and struggling businesses became the losers). The Naira took such a beating that, at a time, it traded for N500 to a dollar. It currently trades at N360 to a dollar.

The effect of the policy was that many companies and businesses were forced to shut down, over 9 million Nigerians lost their jobs, and the real and disposable income of many Nigerians nosedived. Prices of goods and services, especially food skyrocketed beyond the reach of many Nigerians.

Secondly, the government, in the guise of encouraging local agriculture and local food sufficiency, is driving the prices of food still beyond the reach of Nigerians. Take for instance, government’s insistence on banning the import of rice to allow local producers to remain in business. That is good so long as local producers compete fairly and do not sell at exorbitant price. But that has not been the case. Locally produced rice, although of inferior quality, is priced above the reach of poor Nigerians. And that is why smuggling of rice across the borders has continued unabated.

To show how wicked the government is, it is it is planning to shut the border with Benin Republic and also use drones to monitor smuggling.

A government that is interested in fighting poverty cannot, at the same time, be stifling competition just to support and protect some inefficient but big cartels of local food producers that exploit the poor. If there is one policy a government with majority poor people should pursue, it is that of ensuring that food prices remain quite low. But not so in Nigeria. According to the Economist, reporting a study by the OECD, “Nigerians would save 30% of their income if they bought their food at Indian prices.”

But that does not cut any ice with our policy makers. The ultimate result of government’s refusal to accept responsibility for the deepening poverty in Nigeria is that as India’s numbers of extremely poor continue to reduce, Nigeria’s will be growing by the millions yearly.