Economic Issues
The Buhari Government – Pacing Out One Year After -By ‘Tope Fasua
As a former General in the Nigerian Army – one who attended the US Army War College alongside a number of local and foreign elite training programmes – President Muhammadu Buhari must be a strategist, right? But the strategy he has adopted for delivering on the economy now that he is a civilian president must probably be the most complex – and some will say riskiest – one he has ever mounted in his military and/or civilian democratic career.
I will not say I understand his economic strategy because it has neither been revealed nor discussed. All attempts to pry out the policy direction has been rebuffed and some of us have therefore resigned to fate – at least we shall see how things pan out. As the government has promised (and we believe), we shall one day wake up to the Halcyon days of glory, after the current economic management team may have turned the economy around fully. One must give his government the benefit of the doubt since they have very smart people in there. It will be difficult to dismiss the likes of Fashola, Fayemi, the vice president, the Finance minister, the minister for Trade and Investment, among others. These are people who have distinguished themselves in their respective fields and have done extremely well in the private and public sectors.
Yet the economy is obviously going through a colossal period of distress, especially if viewed from the eyes, pockets and stomachs of the most vulnerable among us. I shall review some of the momentous indices with a view to assessing the Buhari 2.0 regime so far, and probably projecting into the future for what to expect.
The Upsides – Anti-Corruption War
First the good news. In summary, Buhari in his second coming is living up to expectation and doing what he knows best as an anti-corruption Czar. In 1984 when he first came, this was the fulcrum of his governance ideology. Hundreds of politicians of the Second Republic were hurled into prison, some for as long as 300 years. There was fear in the land, but for the first time, we saw Nigerians queuing to get into buses and at other public places. His then Deputy, Tunde Idiagbon was known as a never-smiling Ilorin man, and some said he was even harder than Buhari. War Against Indiscipline was crafted by Idiagbon.
This time, Buhari has for a Deputy, a more refined Yemi Osinbajo, a professor of Law and one of the best legal minds in the country. A lot more reserved and much better spoken, he is subtly bringing a lot of finesse into Buhari 2.0, and helping often to dull some of the sharp edges which have earned the new administration public upbraiding. In terms of corruption, a number of people from the government of Goodluck Jonathan are feeling the heat, as the Buhari government – through the instrumentality of the EFCC (Economic and Financial Crimes Commission) – is probing military spending on the war on terror, and the campaign financing of PDP (the then ruling political party). Some have criticised these new probes as not being far-reaching enough, while others have asked the ruling party to also be transparent with its own campaign financing.
Ghost Busters
The efforts of the government have also led to considerable savings. The Director General of the Bureau for Public Sector Reforms recently informed Nigerians that the government has been able to save N185 billion by cleaning up its system through the Integrated Payroll System (IPPIS). 65,000 ghost workers have been detected and removed from the payroll, though we weren’t told whether it was impossible to find those who criminally benefited from this age-long heist and why no one was arrested.
Stories such as this ghost-busting one gladdens the heart. For the government has also announced severally in recent times that it has ‘saved’ N3 trillion through the full implementation of the Treasury Single Account (TSA). Combined with the Bank Verification Number (BVN) initiative, the TSA is perhaps this administration’s masterstroke. A lot of money is being saved, procurement processes have considerably improved, outright fraud have decreased and civil servants are now a bit afraid to do some of the crazy, brazen things they have been known to do in the past. Contractors will bear the brunt, because demands for kickbacks will increase now that avenues are being blocked. But it may help to know that most contracts budgeted for will now be properly implemented.
Another set of recovery is the advertised retrieval of close to N1trillion from corrupt people. The president promised to reel out the names of the criminals today May 29, 2016, Democracy Day. Some say this is late in coming, and that the president should have initiated a policy of total transparency around these recoveries from the get-go, so that we can avoid the errors and allegations of looting and relooting, which had happened in the past.
Some have also complained that the civil service purge is not coming fast enough, that many sectors have still not been touched (like the Petroleum Sector), and that many appointees of the old order still strut around running the system. These skeptics wonder how this government hopes to achieve change using people who do not believe in its stated ideology and who will work against any deviation from the status quo ante.
The president has been accused of being a ‘chief junketer’ and it is difficult to deny that he really does enjoy traveling – and often feels more in his element and at peace when outside the shores of Nigeria (well most of us do because the problems here are a tad too many). However, drawing from his recent visit to the United Kingdom, and against the background of David Cameron’s revelation of the British mindset that Nigeria is ‘fantastically corrupt’, the president’s response and handling of the situation has brought global attention to the need to recover loots stolen from Africa – and not Nigeria alone.
Three Other Achievements
For the sake of space management, I will merge three significant achievements of the Buhari administration. The first – security – is of immense significance. Boko Haram seemed to have faded into the distance – in my view – as quietly as they came! I do not believe that half the truth about Boko Haram was ever found out and there are too many loose ends about that outfit, what they represented, who armed them and gave them intelligence, what they achieved and how they were ended. But thankfully, Nigerians have not been seeing sporadic bombings which maimed and killed thousands under the Jonathan administration.
To put dampers on this achievement though, we have a resurgence of the Niger Delta Crisis, and a new one called Fulani Cattle Herders problem. While the reloaded Niger Delta crisis costs Nigeria almost one million barrels of crude oil production per day (or $50million – N10billion – in potential daily cash flow), the Fulani Cattle Herders one – or whatever it is – mirrors the Boko Haram imbroglio in view of their dastardliness and reach across the entire country.
But away from the gloom, the Buhari administration has also achieved results in promoting #BUYNAIJA – by forcefully weaning Nigerians off imports and therefore giving momentum to producers of local staples; most of whom are youths. A lot more could be achieved here though, because local businesses are harder to start where cash flow is tight all over.
Perhaps I should add Buhari’s achievement with broadening the tax base. More awareness is being created for the public to keep up to their tax obligations and a new rule will soon kick in that forces any person or company needing contracts or other favours from government to necessarily present their tax clearance certificates – like is being done in Lagos State. This will boost the tax revenue considerably. Add to this, the Stamp Duty introduced earlier this year, from which an estimated N2.5trillion is expected, according to the Minister for Communication.
The government has done a number of things that should make – and is making – it awash with cash. Between the recovery of looted funds, TSA, ghost workers, and stamp duties, we are looking at close to N10 trillion in almost fresh funds! Why then is the government not spending? Or why do government operatives – like Alhaji Lai Mohammed – regale and depress the poor people of Nigeria with stories of how broke Nigeria is? Or are we to take it that all these news of recovery of funds and ingenuous new ways of making money are all but propaganda?
In all that has been happening, no one seems to be giving much thought to the most vulnerable in our society – salary earners, jobless people who depend on the magnanimity of others who are now having less, menial labourers who have no voice in increasing their wages, informal micro businesses whose market is being taken over by the large conglomerates who get the ears of government and to whom government relates better (like the new shopping malls now dotting many parts of Nigeria).
One is tempted to ask: why has the government delayed this long to begin spending strategically on those who need it? Why have we not used the naira as a sovereign currency to reflate our economy? What is the point of piling these monies under a veil of opacity and secrecy and only saying anything when ‘violently’ prodded? Why depress people with tales of woe, when what they need, is hope? What is this argument about shielding the rich and putting all the burden on the poor?
For each time we are regaled with the sordidness and hopelessness of the economic situation – and naturally we are reminded that everything rests on the shoulders of Goodluck Ebele Jonathan – the irony seems lost on those trying to convince us. Beyond whipping up sentiments and causing people to get extremely angry – with Goodluck, but ultimately with the elite and with Nigeria as a country, and finally with oneself for being such a failure – the poor is wondering why government appointees and even the elected ones in this regime – are keeping the full compliments of their appurtenances. Their brand new SUVs – bulletproof and ‘full-option’ – are very much intact. Their convoys only shortened from 6 to 5 cars but can grow beyond that at the drop of a hat, they still spend like they did under Jonathan, and of late, some of them were seen complaining of living in their own mansions in Abuja instead of the government renting new places for them. The pressure is on to get them extra houses from government. It doesn’t seem that under this ‘change’ regime, anyone is eager or ready to make sacrifices so that Nigeria may truly change for the better. One is at a loss to see how the country will truly change if no one makes any sacrifice or takes any pain. But, of course, the poor can be lampooned a little bit more.
This brings up the complaint that the government may be taking the support of the poor and struggling for granted. Other taxes have been suggested, in a way that makes the poor and struggling wince. VAT – Value Added Tax – may go up to 10 percent anytime soon, and there is a Communication Service Tax (CST) – or a tax on every call and use of the internet. The former Minister of Communication – Mobolaji Johnson – was against this idea at the recently concluded African Development Bank meeting in Lusaka, Zambia. The poor and struggling – who make up the vast majority of Nigerians – are wondering when the pain is ever going to abate.
The people of Nigeria are also wondering why Nigeria is contracting loans both local and foreign, in view of these new cash flows. They are however aware that the government sits at the dashboard and sees everything. In this age of information, all we need is more transparency and to be carried along.
An Economy Shot To Pieces?
Then there is the near certainty that Nigeria will be in recession – officially – by the end of June 2016. We’ve always had the symptoms of an economy in permanent depression anyway (high unemployment figures, high poverty rates etc). But figures from the Nigerian Bureau of Statistics and the Central Bank of Nigeria show that for the first time since 1992, Nigeria’s Gross Domestic Product (GDP) dropped by 0.4 percent by quarter-ended March 2016. This is a very bad testimony for this government and a wakeup call as well. Every evil star in the constellation seems to be convocating and the result is ominous. An official recession?
This is coming after inflation hit double-digit and is not looking back, at almost 14 percent and still rising. The naira was officially devalued by about 20 percent some months back when it dropped from N166 to N199 to the dollar, but with the most vulnerable feeling the pinch the most because almost every item on sale is priced off the dollar at N350. Then the government floated the naira a couple of days back, with almost every transaction to now be funded by ‘interbank’ rates. The parallel market lost further grounds. This is two weeks after we saw a ‘deregulation’ (only God knows what it really is what, with different narratives from different high-ranking government operatives) of petroleum prices, which saw the product rising by N58.5 per litre, or 68 percent in one fell swoop! Is this mercilessness? In all of those instances where government takes such decisions, prices of staple products – especially food – jumps. Food price inflation would truthfully be around 40 percent, and for those with extremely low income, food is all they can buy. Transport costs have doubled in some instances. ‘Pure water’ has become 200 percent more expensive in some areas. Some have termed the Buhari policies to be ‘The Pulverisation of the Poor’. What is more, interest rates have been increasing since Buhari came – meaning that businesses are finding it tougher to survive, with many closing down or downsizing and thousands of workers laid off.
Broken Promises, And Resurgence of Oil Terrorism
The poor had had hope that things will be better for them, and quickly too. The APC campaign had made a plethora of promises. They promised to pay N5,000 to 25 million poorest Nigerians. They promised to pay university graduates for one year after youth service. The APC promised student loans and made huge signboards of these promises. They promised and promised and promised. What is painful is that some of us their supporters asked them then to taper those promises, but the politicians refused. Now, they blame everything on their predecessors and brashly deny the rest while condescending on a brokenhearted people. A core of die-hard supporters exist – especially on social media – who try to help spin all the bad news emanating from the regime, but not everybody is cowered by them.
The more dissent is stymied by this team of internet defenders, the more evidence appears that all is not really well for the administration as they profess. If all was well, Nigeria will not have seen a resurfacing of Niger Delta troubles, this time by ‘Niger Delta Avengers’. The government should have had that area sewn tight. That the NDA has shut down almost one million barrels of crude oil for Nigeria today is enough testimony that they are a serious problem, because they have provided an additional basis for the government to complain of their inability to stick with campaign promises. Minister Lai says ‘Nigeria is broke, simple’. Why did our leaders not manage and lead very actively such that Niger Delta does not create this problem again?
Alongside the Niger Delta problem comes that of Fulani Cattle herders – or whoever they really are. These herders are having problems in almost every town and village, and are at the very epicentre of a clash of civilisation. They would rather take their herds around the country, but the increase in human population means that people are taking their lands more seriously. Again, the situation is not being well-managed and this is shutting down a proportion of the GDP – the productivity of affected Nigerians.
It cannot be denied that the Buhari administration has lost considerable steam and goodwill. The General has to retool and have a review of this complex war strategy. He cannot afford to lose ground in the hope of regaining the same patch of land in the future. The world is just too smart these days. For me, goodwill is even far more precious than money. So on two counts; goodwill for itself and dignity for its people, the administration is losing grounds and doing itself a disservice. The president could actually make the people of this country work for him for free when he first came in. The trust – and even considerable patriotism and unity – was there. But now, I doubt if anyone will listen to him. That we have lost steam/patriotism/innocence is why ministers who live in their houses are asking for new houses or huge allowances. It is also why senators are insisting on exotic SUVs because ‘everybody else has, and why would senators not have the same cars as the Permanent Secretaries they supervise’. And they have a point. But who shall bell the cat in this obodo Naijiria?
Unknown Unknowns (Bad Risk Management)
Lastly is the problem of bad risk management. I have always warned that we need speed in touching the people positively. Apparently much time has elapsed, and then out of the blues we heard of ‘Tomato Ebola’. Some tomato-eating disease had come up and caused a draught of tomatoes in Nigeria this year. The government may pigeonhole the problem into agriculture, but at the end of the day, a King shall be defined by what happens under his reign.
Donald Rumsfeld – another defence expert like our president – was the one who called attention to ‘unknown unknowns’. In trying to ‘fraudulently’ justify the war in Iraq, Rumsfeld explained that the world is made of thing we know that we know (that we are cocksure of), and things we know that we don’t know (that are beyond us entirely), but that the real big problem is with things we cannot anticipate (things we do not know, that we do not know); unknown unknowns. We just cannot imagine they exist, until they happen and throw us out of jig. I had had cause to believe that this administration is bad with simple ‘management’, even if it has ‘leadership’. Nigerians have recently elevated leadership over management, but management is very important. Many of our problems as a people have to do with management, not leadership, failures.
So here we are. As the administration warded off prying eyes, as they kept information from the people, as they even told many that their innocent help was not needed – and that they alone could fix everything – they did not anticipate something like Tuta Absoluta (the ‘absolute’ caterpillar disease that is eliminating tomatoes from Nigeria) as one basket that used to sell for N1,500 now costs N15,000! That is why an inclusive government that shows respect to its constituents is always a surer bet.
‘Tope Fasua, an economist and consultant, is CEO of Global Analytics Consulting.
