President Muhammadu Buhari’s ‘Government of Change’, inaugurated on May 29, has come under scrutiny. While some people say that the administration has yet to make good its promise to revamp the economy, one year after, others, citing the re-invigorated fight against corruption and other strategic policies, insist that he has laid a foundation for a strong and resilient economy. Assistant Editor CHIKODI OKEREOCHA reports.

No one envies President Muhammadu Buhari. Despite inheriting a plethora of economic problems, most of which started manifesting as soon as his administration was inaugurated on May 29, last year, the same problems that presented significant challenges to him particularly in managing the expectations of Nigerians now form the basis for assessing his stewardship one year after.

For instance, how well has Buhari managed the economic crisis caused by crashing oil prices at the international market, which he inherited? What has the Central Bank of Nigeria (CBN), under his watch, done to achieve exchange rate stability and curb rising inflation, which rose from 12.8 per cent in March to 13.7 per cent in April last month, according to the National Bureau of Statistics (NBS).

Also, has Buhari sustained the tempo of the fight against corruption, which earned him the respect and trust of Nigerians who freely and overwhelmingly gave him their mandate on May 29? Will history be kind to him for brightening the outlook for other macro-economic indicators such as the foreign reserves that have dropped to $27.8 billion at the last count?

To what extent has he made good his campaign promise to diversify and industrialise the economy, create jobs, tackle poverty, usher a regime of qualitative education and affordable housing and fund agriculture? Has there been any significant improvement in security especially the fight against terrorism? How has he managed the crisis in the power sector? Has he guaranteed uninterrupted electricity supply?

These are some of the questions agitating the minds of stakeholders and operators in various sectors, as the performance of the ruling All Progressives Congress (APC) comes under scrutiny one year after. Some of them who spoke with The Nation said that there has not been any significant improvement in the economy because the administration has been rather too slow. Others, however, said that considering the inauspicious time he came into the saddle, he has acquitted himself well.

Buhari took the mantle of leadership at time the economy was experiencing perhaps its worst turbulence ever. At the home front, the activities of the dreaded Boko Haram insurgents crippled the economy, at least, the entire North East. The growing army of Internally Displaced Persons (IDP) caused by the terrorists exerted significant pressure on government’s lean resources. Kidnappers and the marauding herdsmen also added to the disturbing security challenge in the country.

As the Director-General (DG), Enugu Chamber of Commerce, Industry, Mines and Agriculture (ECCIMA), Sir Emeka Okereke, observed, “Nigeria is in a battlefield. There is apprehension everywhere; the economy has been stagnant.”

He said the growing insecurity coupled with the nation’s huge infrastructure gap exacerbated the already harsh business environment for operators in various sectors. Consequently, local and foreign investments dried up as a result of which the economy was grinding to a halt.

Developments at the global scene was perhaps more devastating. Global oil prices have been nose-diving since June 2014, throwing Nigeria, world’s sixth largest oil producer, into confusion. From over $120 per barrel in December 2013, oil price fell to around $60 per barrel in December 2014. By December 2015, oil price crashed to about $32 per barrel.

Again, by January 19, 2016, the price of Brent crude, which is the world benchmark price, crashed to below $28 per barrel, the lowest in 12 years. Although, there has been a rebound, with oil selling for $48.98 per barrel, as at Monday, May 16, 2016, Nigeria’s revenue troubles are far from over. With oil revenue accounting for more than 75 per cent of government’s revenue and close to 90 per cent of foreign exchange income, it could not have been otherwise.

The crisis has since induced a sharp drop from the Federation Account, which necessitated a huge financial bailout for some State Governments. President Buhari recently brought nearer home the nation’s grim economic prospects, which he inherited when he said that 27 out of 36 states are broke and unable to pay salaries. The president, who made this known in Abuja at the second National Executive Committee meeting of the APC however, said his administration was battling to stabilise the economy.

For a criminologist and lecturer in the Department of Sociology, Imo State University, Owerri, Dr. Dan Nkwocha, the battle to stabilise the economy has never been this serious since last year when the finances of many states became precarious because of dwindling federal allocations. He described the administration’s decision to ameliorate the sufferings of workers across the states, through the release of a bailout to 27 states on the verge of financial liquidation as a study in financial crisis management.

Also citing the reinvigorated fight against corruption, the university don said Buhari is on track. He said, for instance, that the vigour with which has prosecuted the anti-corruption war in the last one year has not only raised hopes that the monster will soon be caged to pave way for real development, but also earned Nigeria the respect of the international community. According to him, the global community had long written off Nigeria on account of pervasive corruption, a toga Buhari is now determined to remove.

That is not all. Dr. Nkwocha also pointed out that the Treasury Single Account (TSA), through which the Federal Government blocked all revenue leakages, has ushered a regime of transparency, probity and accountability in the running of government’s finances. He said the initiative, which is a fall out of the re-jigged anti corruption war, restored sanity in revenue generation by stopping the duplication of accounts by heads of Ministries, Departments and Agencies (MDAs).

Under the TSA, Boards and MDAs are barred from operating separate accounts thereby allowing for prompt remittance to a central pool. With initiative, President Buhari recently said the Federal Government has so far mopped up over N3 trillion as revenue accruals since the policy of Treasury Single Account commenced. He said TSA savings will be redeployed and distributed to all the critical sectors of the economy as soon as the implementation of the 2016 budget commences.

He further stated that the president’s promise to make public details of all recovered stolen wealth during the celebration of his one year anniversary in office on May 29 was heart-warming. He said Buhari had in response to public demands for accountability for monies recovered from indicted former government officials and others facing corruption charges, assured that details of such recoveries will be made public.

He added that Buhari’s decision to deregulate or remove petrol subsidy was a step in the right direction. He expressed optimism that the removal of subsidy and the eventual increase in the pump price of petrol to N145/litre by the Federal Government would, in the long run, end the incessant fuel scarcity in the country and also reduce pressure on foreign reserves. Besides, it will create jobs and boost investments by encouraging investors to build refineries.

Because of the nation’s dysfunctional refineries, Nigeria loses a staggering N10 billion to the importation of petrol yearly, according to the Minister of State for Petroleum Resources and Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu. With such huge capital flight, he said the only option left to the government was fuel subsidy removal or deregulation of the downstream sector of the oil & gas industry

For the Director General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, “the overregulation of the sector and the subsidy regime had put enormous pressure on government finances and on our foreign reserves. It was evident that the policy choice was not sustainable. The review is in the long term interest of the economy and the people.”

Yusuf said petroleum subsidy management has been characterised by serious transparency issues for several decades. According to him, there are two components of the subsidy phenomenon. The first is the actual subsidy, which is the differential between the pump price and the landing and other costs of fuel. The second {and more disturbing component} is the blatant corruption inherent in the fuel subsidy regime.

“For several years, the Nigerian economy suffered severe bleeding from this phenomenon; with subsidy payments in the one trillion naira threshold, and even more. In an economy with huge deficit in economic and social infrastructures, it was simply scandalous. It is in the overall interest of the economy and citizens for it to be discontinued,” the LCCI DG said.

According to him, one of the benefits will be the free up of resources for investment in critical infrastructures such as power, roads, the rail systems, health sector, education sector etc. “The deficiency in all of these infrastructure areas is phenomenal. Fixing infrastructure will greatly improve productivity and efficiency in the economy and impact positively on the welfare of the people,” he said.

Also, discarding subsidy, he pointed out, will boost private investment in the downstream oil sector especially in petroleum product refining. This will ultimately reduce importation of petroleum products and ease the pressure on the foreign exchange market as well as foreign reserves. It will also eliminate the rampant patronage, rent seeking activities and corruption that currently characterise the downstream oil sector, while also improving product availability and eliminate fuel queues.

However, some people believe that Buhari’s economic scorecard is everything but satisfactory. For instance, the former Minister of Education and social critic, Oby Ezekwesili, said the president’s current economic policies are “archaic” and “opaque.” She said his policies are similar to those he promulgated during the military regime he led in the 1980s.

Speaking in Abuja recently at ‘The Platform,’ a public policy forum, the former Vice President of World Bank said Buhari’s economic principles are not only encouraging massive corruption and abuse of power, but also hurting the poor they were intended to help.

She said the president was rehashing the same “command and control” approach towards economic issues, which has left the country’s economic indices worse off since he assumed office. “In a year we have lost the single digits inflation status we maintained in past administrations,” Ezekwesili said.

A Quality Management Practitioner and National President of Association of Systems Management Consultants, Mazi Colman Obasi, also faulted the administration’s approach, which he said favours a makeshift approach to economic management instead of a marshal plan, or a five to 10 years National Economic Development Plan.

While admitting that “he (Buhari) didn’t create the present economic problems; they only manifested in his time,” he recommended that the administration should use Lagos as base line study to develop a plan on how to grow the economy holistically. He said APC governments at state level appear to be pulling more weight than the one at the centre.

For Okereke, there is need for an economic think to chart the course for economic growth and development of Nigeria. While pointing out that “Nigerians are yet to see any appreciable improvement in the economy”, he said the economic think than to be so created would come up with a clear cut mechanism and strategy to move the economy forward.

Other experts who spoke with The Nation pointed out that if Buhari could reposition the real sector by addressing its many challenges, it would ride on it to deliver on his campaign promises, particularly those relating to job creation, security and diversification of the economy. To achieve this, they noted that there is need to close the huge infrastructure gap, particularly power that has been a thorn in the flesh of real sector operators.

For economist and industrialist Mr. Henry Boyo, getting the economy is not rocket science. “The pillar of any economy is monetary policy and the pillar of monetary policy is interest rate, inflation and exchange rate. When you get those ones right like in other countries you will fix the economy,” he said.

The renowned economist said there is need to stem the crisis of excess liquidity in the system, which are responsible for the high interest rates, inflationary pressure, and devaluation of the naira. According to him, excess liquidity in the system is caused by Central Bank of Nigeria (CBN) “crazy, merciless, insensitive, and unilateral policy” of substituting naira allocations for dollar-derived revenue.

He said CBN’s conscious, deliberate and misguided payment arrangements result in market imbalance, which ultimately weakens the naira exchange rate.

@Source thenation


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