It’s Still the Economy, Stupid!

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President Muhammadu Buhari’s setting up of the Economic Advisory Council is an underscore the need for fix the economy which still poses a huge challenge to governance, writes Obinna Chima

The phrase, It’s The Economy, Stupid, coined by campaign strategist James Carville, during Bill Clinton’s 1992 presidential campaign has remained a point in drawing the nexus between politics and the economy.

The phrase was used then to draw the attention of the candidate and everyone working for him on the need to put the people first and the need for them to focus on the economy.

Indeed, the strategy worked for Clinton then and the phrase has remained eternally relevant.

Clearly, the economy has always been the fulcrum of politics.

That was why last week’s announcement by President Muhammadu Buhari of an Economic Advisory Council (EAC) to replace the erstwhile Economic Management Team (EMT) chaired by Vice President Yemi Osinbajo since 2015, was widely commended.

The new council, according to a statement by the president’s Special Adviser on Media and Publicity, Mr. Femi Adesina, would hold monthly technical sessions as well as quarterly meetings with Buhari, who they would directly report to.

According to the president, a renowned economist, Prof. Doyin Salami, would chair the council, while Dr. Mohammed Sagagi would serve as his deputy.

Other members of the council are Prof. Ode Ojowu, Dr. Shehu Yahaya, Dr. Iyabo Masha, Prof. Chukwuma Soludo, Mr. Bismarck Rewane and Dr. Mohammed Salisu, a Senior Special Assistant to the President on Development Policy, whowill serve as secretary.

The presidential spokesman also said the council was saddled with the mandate to advise the president on economic policy matters such as fiscal analysis, economic growth and a range of internal and global economic issues.He said the council would work with relevant cabinet members and heads of monetary and fiscal agencies.

Undoubtedly, the Nigerian economy is in difficult situation and urgently needs all necessary push and economic advice to regain its balance.

For instance, policymakers in the country should be bothered by country’s low revenue profile, especially in a situation where the federal government’s recurrent expenditure (including statutory transfers) stood at N5.85 trillion in 2018, while total revenue earned same year was N3.86 trillion, according to a recent report by BudgIT, a civic tech organisation.
It is also worrying that Nigeria, whose Gross Domestic Product (GDP) used to grow at an average of seven per cent has continued to stagger with growth hovering around two per cent.

The latest data released by the National Bureau of Statistics showed that Nigeria’s GDP growth rate stood at 1.94 per cent (year on year) in real terms in the second quarter of the year (Q2 2019), compared to the 2.10 per cent (revised from 2.01 per cent) in the preceding quarter.

This showed that Nigeria’s population growth rate of about three per cent remains far above economic growth.

With the country’s total public debt, comprising the federal government, states and the Federal Capital Territory (FCT) at N24.947 trillion or $ 81.274 billion as at March 31, 2019, Thursday’s disclosure by the World Bank that it is in talks with Nigeria for additional $2.5 billion concessionary lending, should also be a source of concern to Nigerians.

Similarly, another data that matters for economic growth, which has continued to weaken in Nigeria, is the rising state of unemployment estimated to be more than 24 per cent.

Therefore, the seven wise men are expected to give recommendations that would provide the needed impetus for the economy.
For a former Central Bank of Nigeria Deputy Governor, Prof. Kingsley Moghalu, who welcomed the EAC, the council members should not just focus on GDP growth.

According to him, while GDP growth is important; it is not enough.
He explained: “What about GDP per capita? What about the average income of the average Nigerian, which has been going down over the last four years?

“Since 2015, Nigerians have been getting poorer. So, they have to look at not just economic growth, but we have to look at human development.

“What is the quality of life of the Nigerian people? Do they have potable drinking water, electricity, good schools and good hospitals? These are the things that determine our everyday quality of life, which are very important component of the economy.”

The Emir of Kano, Muhammadu Sanusi II, commended the president and described members of the committee as first-rate ‎professionals and academics.

He said the move was timely and reflective of Buhari’s determination to re-energise the management of the economy.
According to the former CBN Governor, Nigerians were highly desirous of such an effective and knowledge-driven team to provide the lead on the economic front.

“If you look at the system we operate, if you also look at the United States, every US president always has a council of economic advisers.

“One of the reasons you have this council is you want independent academics, who are able to give you frank and honest ‎advice on how to run the economy and address its problems.

‎“What the president has done is to follow that pattern to appoint a team of highly respected professionals to advise him, ‎especially this time, when we have economic problems, fiscal issues,” he added.

From the foregoing, the president’s focus on the economy is an indisputable way to help connect with the electorate as he strives to deliver his ‘next level’ promises. Essentially, the economy is still the issue!