Economic recession: Buhari and the burden of history
It is no longer news that the Nigerian economy is in recession. As reported by the Nigerian Bureau of Statistics, “in the second quarter of 2016, the nation’s Gross Domestic Product declined by -2.06 percent (year-on-year) in real terms – the worst such performance in over 29 years. Inflation is heading for the roof – presently, at 17 percent. Unemployment and under-employment among the youth is now at 45 percent. The beleaguered Naira is in a free fall (now N425 to the dollar). The misery index is now at 47.7 – the fifth worst such index in the world.
As if these are not enough, the Manufacturers Association of Nigeria (MAN) recently released figures to show that over 272 businesses have closed shop in the country over the last year. 222 of those were SMEs while 50 were manufacturing companies. Sadly, most of the manufacturing companies that closed shop in Nigeria relocated to neighbouring countries with more friendly business policies from where they manufacture and import to Nigeria. The total job losses since Mr Buhari took over power have been officially put at 4. 58 million, according to the figures from the NBS yesterday.
This is 2016 but it all reads like 1985 when Buhari was a military Head of State. History cannot be kinder to Mr Buhari. Removed from office by his military colleagues after just 20 months for his rigidity and incapacity to respond proactively to the dire economic immobolism of the 1980s, Buhari was granted a golden opportunity in 2015 to rewrite history, prove to his accusers that he is not the rigid socialist, economic illiterate and an ethnic champion that his detractors have always portrayed him to be. Luckily, he still enjoyed an unrivalled reputation for sincerity, incorruptibility and frugality.
Sadly, since coming to power, Mr Buhari has repeated all the mistakes he made in 1984 and 1985 that crippled the economy and caused great sufferings to Nigerians that they had to queue for days just to buy essential commodities like rice, bread, sugar, milk etc.
Nigerians voted overwhelmingly for him and his party, the All Progressive Congress (APC) based on their colourful campaigns and promises of positive change, especially, change from a culture that permits corruption to one where corruption will be anathema in the polity and where there will be prosperity for all. But all of a sudden, Nigerians found themselves transported to 1985 with all the sufferings and discomfiture. Nigerians have never had it so bad in living memory.
Upon ascending the presidency in May 2015, Mr Buhari settled into his usual game of blaming the previous administration for all the woes of the country – as if that was what he was elected to do – while he neglected the economy and refused to name a cabinet and an economic team for clear six months despite clear warnings and counsels from well-meaning Nigerians and experts. He prevaricated and did nothing on the economy while distracting Nigerians with a crude and ineffectual war on corruption that is yet to convict a single individual in court fifteen clear months since it began. When the repercussions of his offhanded approach to the economy began showing, no doubt exacerbated by the decline of crude oil prices and consequently federally distributable revenue, he predictably rolled out crude and expired socialist measures that only helped to worsen the problem and plunged the country’s economy deeper into the abyss. A Senator and principal actor in the 1985 coup d’état that ousted Buhari was said to have cynically declared after Buhari won elections in 2015: “Just wait for one year and you will soon know why we removed him in 1985”. How prophetic that comment now sounds!
But all hope is not lost. The President must listen to wise counsel and act to rescue and the Nigerian economy from sinking further as some cynics are predicting. The government must urgently remove all wasteful and abuse-prone subsidies that only benefit its administrators rather than the masses they are meant for. It also has to find ways to fix the failures in the power sector value chain to enable the sector generate and supply power needed for national growth and development. It must also accept that it cannot be an economic player but rather a regulator of economic players. It must therefore develop and strengthen its capacity to effectively regulate key players in the economy. This also entails welcoming private investment in infrastructure. The government also has to be more long-term focused by prioritising spending towards developing the human capital.
Finally, the government must not only liberalise the foreign exchange market, it must prove to both local and foreign investors that it means business by guaranteeing the independence of the Central Bank to make monetary policy decisions and should act to make the business environment in the country more friendlier for foreign investments.
History will not be kind to Mr Buhari if he continues with the current policies that have ravaged and will continue to ravage the economy and Nigerians.