The long and short of PMB’s presidency (2) 

Nigeria’s economic performance under the All Progressive Congress (APC) government, presided by President Muhammadu Buhari over the last three years is nothing short of disastrous. Yes, oil prices, critical for government expenditure, and the stability of the exchange rate, fell and precipitated a decline in government revenue and aggregate expenditure. However, the conclusion and narrative that this is solely responsible for the poor economic performance is simplistic.

One reason is that it assumes that the only way, which is the Buhari way, to grow the economy, is through oil prices and the government expenditures it feeds. Also, it assumes that Nigeria will enjoy high and stupendous level of prosperity if we get the right value for every Naira spent by the government. This means that, without corruption and leakages in government expenditure, Nigeria will be a prosperous country. Underlying this assumption and narrative also is that Nigeria’s fiscal policy should be limited to the annual appropriations.

Why this short background is necessary is that the APC government said in the 2015 manifesto they will “make our economy one of the fastest growing emerging economies in the world with a real GDP growth averaging 10% annually”. But as I argued last week, there is strong indication that the President was not aware, nor read the manifesto, or understand the manifesto, or try to understand it, and does not believe in it. It was written by the Lagos wing of the Presidency, which unfortunately, though the intellectual wing, it is the powerless wing.

While the manifesto does not spell out, nor provide details of how the government and or the country can achieve a 10 per cent growth annually, it acknowledges that economic growth is critical to driving poverty down, raising the number of those in the middle class, and improving the standard of living of Nigerians. But that the government has only managed to achieve consistently less than 3 per cent growth rate, and presided over a devastating and crippling five quarters of economic recession in 2016 – 2017, is a testament that government policies could not rise beyond the primordial sentiments of the President. So, without a shadow of doubt in my mind, the economic recession was not some sort of inevitable economic occurrence following the decline in oil prices, but caused largely by the delay in appointing ministers in 2015, which meant there was no economic policy coordination at the required level, and the crippling four months of fuel crisis in early 2016. Both were caused by the primordial sentiments of the President.

So, the seeds of the tepid and weak economic recovery we see today were sown in the first year of Buhari’s presidency. Indeed, in the period leading to the first year anniversary in 2016, the National Bureau of Statistics (NBS) had released a trinity of devastating data on the Nigerian economy. In the first quarter of 2016, the economy recorded a negative growth of 0.36, the first negative growth rate since the second quarter of 2004, while unemployment and underemployment were 12.1% and 19.1%, respectively, the fastest increase in unemployment in the decade before then, and inflation had started to rise, reaching 13.7% in April of the year. While oil price decline contributed, the economic performance worsened because of the incessant fuel crisis, foreign exchange constraints, delay in the passage of the 2016 national budget, power shortages, and severe collapse in business confidence.

So, no analyst or economist worth his or her degree would think that the economic mess of the last three years can simply be explained through the lens of the dynamics in oil prices. Rather, the performance of the economy is a reflection of the non-or poor preparation for fall in oil price, policy division between the President and his vice, and a preponderant mindset that the expansion of the State is the panacea for our growing economic challenges. In the final analysis, all these symptoms are reflections of the long promises of the government and the short delivery of those promises. And there is only one person to blame – though competing in every election since 2003, the President has not prepared himself, thought and understood what is required and wanted to achieve for Nigeria, and never sought to understand how it can be achieved. The last four years has shown that he is simply unprepared for the number one office in the land.

In conclusion, it is very ambitious to want to grow the Nigerian economy by 10 percent, but it cannot be by wishful thinking and the expansion of the State. It can only be done with broad and specific plans, based on serious and sustained economic reforms that will attract private investment in all sectors of the Nigerian economy. It will be about the economic incentives to attract capital, retain it, and drive private sector behaviour towards investments, growth and jobs, both at the federal and state levels.

I thank you.

Ogho Okiti