By Lewis Chukwuma
According to Dwight D. Eisenhower, former US President, “The search for a scapegoat is the easiest of all hunting expeditions.” Across the Atlantic, in another presidential democracy, a flawed clone of the US model, President Bola Ahmed Tinubu has apparently opted to search for a scapegoat while the nation crumbles. Weaponising the blame game clearly portends danger.
Tinubu’s ‘hunting expeditions’ as it were traverses different governance sectors – economy, security, infrastructure, et cetera. From blaming former President Muhammadu Buhari whom he largely choreographed his installment, to impugning banks, ex-CBN governor Godwin Emefiele, political opposition and more, this jaded mantra by his key officials has clearly reached an underwhelming crescendo.
Only few will forget that peering into the foggy future of Nigeria’s economic big picture, Dr. Yemi Cardoso, Governor of the Central Bank of Nigeria, CBN, merrily predicted that President Tinubu’s economic reforms will lead to a $1trn-dollar national GDP growth in eight years.
He spoke last October in Marrakesh, Western Morocco, on the side-line of the 2023 World Bank/IMF Annual Meetings. Morocco’s GDP then stood at $415 billion based on IMF growth rate estimates applied to World Economics GDP data in 2023. Within the same period, Nigeria’s nominal GDP stood at $489.80 billion.
But between rosy policy proclamations and actualisation lie a crucial gulf of the power of deep thought. And this appears to be the bane of the Tinubu administration, especially coming after eight years of Buhari’s extremely ruinous regime.
Just two months ago, the Chief Executive Officer of Financial Derivatives Company Limited and Non-executive Director of Parthians Partners, Bismarck Rewane, wrote off Tinubu administration’s target of achieving a $1 trillion economy in the next eight years as a pipe dream. Rewane said this at the Parthians Partners 2024 Outlook breakfast session held in Lagos.
According to Cardoso at another event, “It is crucial to highlight that between 2010 and 2020, foreign educational expenses amounted to a substantial $28.65 billion, according to the CBN publicly available balance of payment statistics. Similarly, medical treatment abroad has entered around $11 billion in costs during the same period. Consequently, over the past decade, foreign exchange demand for education and healthcare has totalled nearly $40 billion.
“Notably, this amount surpasses the total foreign exchange reserves of the CBN. Mitigating a significant portion of this demand could have resulted in a considerably stronger naira today.”
The essence of a regime change is to bring in new vision and leadership. Tinubu currently represents these. He must deliver and not blames. For some reasons the current administration is blaming the financial services sector – banks – as being responsible for the economic woe of the country, especially with regards to the forex crisis. But they conveniently ignore the dynamics that sustain strong national currencies.
Just twenty-four hours ago, the Presidency also blamed what it called “economic saboteurs” for the raging food crisis in the country. It accused “unscrupulous Nigerians” of working to undermine President Tinubu administration’s efforts at revamping the Nigerian economy.
For good measure, it condemned what it saw as the decades of mismanagement and underutilisation of the country’s assets within and outside the borders, leading to revenue losses that have hindered economic growth.
Vice President Kashim Shettima made the assertions at the recent Public Wealth Management Conference in Abuja. His words: “Just three nights ago, 45 trucks of maize were caught being transported to neighbouring countries. Just in that Ilela axis, there are 32 illegal smuggling routes. And the moment those foodstuffs were intercepted, the price of maize came down by N10,000. It came down from N60,000 to N50,000.
“So, there are forces that are hell-bent on undermining our nation, but this is the time for us to coalesce into a singular entity. We have to make this country work. We have to move beyond politics. We are now in the face of governance.
“Sadly, some of our countrymen are still in the political mode. They are the practitioners of violence, advocating that Nigeria should go the Lebanon way. But Nigeria is greater than any of us here. Nigeria will weather the storm.”
According to Shettima, instead of waiting till 2027, desperate politicians who could not get to power through the ballot box were hell-bent on plunging this country into a state of anarchy.
Signs that the immediate past Nigerian President may collide with Tinubu, his successor, began when Tinubu told the ministers, Presidential Aides and Permanent Secretaries at a two – day retreat with him at the Villa that things may not be going down well as expected because he had accepted the assets and liabilities of the former President Buhari.
But renowned economist Bismarck Rewane called on the federal government to dump the blame game and come out clean with people on the situation of the economy and what is being done to tackle the current challenges. He said the government must take urgent action to reverse the trend because “doing nothing is now a recipe for chaos.”
Speaking on a national television recently, Rewane stated that, “First of all you have to understand, you have to implement efficiently because the consequence of misunderstanding is disorderly change and disorderly change is not what we want. It is a recipe for chaos.
“The truth is that you have to be honest with yourself and you have to understand that there is no quick fix. Come clean to the Nigerian people, tell them this is the extent of the problem.
“So come clean, block the leakages, look for competence. Competence is more important at this time than loyalty. So look for competence and ensure that you execute efficiently.
Rewane said the government should shun any solution that involves printing more money. According to him, printing of more money “is the panacea for inflation and inflation is the beginning and the end of the currency and the end of the currency is the beginning of political crisis.”
Nigerians are facing hard times over high cost of living and inflation. Already protests are being held in several states over the high cost of living.
On the solution to the crisis, he said printing of more money “Is the panacea for inflation and inflation is the beginning and the end of the currency and the end of the currency is the beginning of political crisis.
“First of all you have to increase productivity but that is also not a quick fix… evolve “Fiscal policy that would incentivize productivity, concessioning the roads, concessioning the airports and taking government out of those entities where they have no competence, either they don’t have the competence or they don’t have the integrity to run those businesses, let them get out of there and use the increased revenue from subsidy reductions and exchange rate realignment, let them use that to do the new things they have to do.”
Elementary economics clarifies the laws of supply and demand. The law of supply states that the quantity of a good supplied rises as the market price rises, and falls as the price falls. Conversely, the law of demand says that the quantity of a good demanded falls as the price rises, and vice versa. These principles drive the push and pull in demand and supply.
When there is sufficient supply, the issue of hoarding is clearly untenable as the current administration is alleging. It’s only a fool will hoard fuel, rice, beans or other products where sufficient supply prevails.
The current situation recalls the condition in the US when Barack Obama assumed power in 2009. Obama became American president in January 2009, two years after America entered severe financial crisis that began in 2007.
The economy reportedly lost nearly 3.6 million jobs in 2008. Also, major financial institutions either collapsed or were forced into mergers. Despite the precarious situation of the economy, Obama did not waste his time blaming his predecessor in office, but rather focused his attention and energy on how to rescue the situation, because that was why he was elected.
His Obamanomics, involved granting bailout or stimulus package to banks, and struggling companies, which amounted to $800 billion, decrease income inequality and reduction in federal budget deficit.
He signed the American Recovery and Reinvestment Act (ARRA) of 2009, which was a blend of spending and tax cuts. In no time, the American economy was retooled, and it was reported that some, if not all the collapsed banks and companies, came back to life, jobs were created and household income improved.
Some say that the problem with Nigeria is that her elected leaders find it difficult to differentiate between governance and politics or electioneering.
Tracking back, 44 years ago, precisely on 25/07/1980 the exchange rate was: $1 = 0.80k, This was because Nigeria was far more productive in 1980 than she is today. In 1980 the key reasons for the nation’s positive economic growth were simple.
Nigeria was a net exporter of refined petroleum products. Today she imports all her refined petroleum products. Nigerians rode in locally assembled cars, buses and trucks – Peugeot cars in Kaduna and Volkswagen cars in Lagos.
Leyland produced trucks/buses in Ibadan and ANAMCO in Enugu also produced buses and trucks. Steyr in Bauchi produced agricultural tractors. And it was not just Assembly, the country was producing many of the components. There were much more.
Vono products in Lagos produced the vehicle seats; Exide in Ibadan produced the batteries, not just for Nigeria but for the entire West Africa; IsoGlass and TSG in Ibadan produced the vehicle windshields while Ferrodo in Ibadan produced the brake pads and discs.
Dunlop produced tyres in Lagos and Michelin tyres were produced in Port Harcourt. These were produced from rubber plantations located in Ogun, Bendel and Rivers States. Nigerians listened to radio and watching television sets assembled in Ibadan by Sanyo and also were using refrigerators, freezers and airconditioners produced by Thermocool and Debo.
Nigerians were proudly putting on clothes produced from the UNTL Textile Mills in Kaduna and Chellarams in Lagos. They were not from imported cotton but from cotton grown in Nigeria. Potable water was running through pipes produced by Kwalipipe in Kano and Duraplast in Lagos while toilets were fitted with WC produced in Kano and Abeokuta.
Folks cooked with LPG gas stored inside gas cylinders produced at the NGC factory in Ibadan and electricity was flowing through cables produced by the Nigerian Wire and Cable, Ibadan; NOCACO in Kaduna and Kablemetal in Lagos and Port Harcourt.
We had Bata and Lennards Stores producing the shoes we were putting on. The shoes were not from imported leather but from locally tanned leather in Kaduna. What’s more, Nigerians were mainly flying the Nigeria Airways to most places in the world. The Nigeria Airways was about the biggest in Africa at the time.
On the agricultural front, most of the foods eaten were grown or produced in Nigeria. Today, we import almost everything. Therein lies the source of the terrible exchange rate Nigeria is experiencing today.
It is the duty of the nation’s political leadership to reverse these. Blame games is not the way to go. Economic productivity is key.
