It has been five and a half years since President Muhammadu Buhari took over as leader of Africa’s largest economy. Propelled to power over the then incumbent on the promise of ending corruption and growing the economy, Buhari’s last five years has left the country’s economy in a dystopian state. Nosa James-Igbinadolor reports
It has been five and a half years since President Muhammadu Buhari and his administration assumed office and for the vast majority of Nigerians, including those domiciled in his strongholds of North-eastern, North-western and South-western Nigeria, it has been five and a half years of doom and gloom. For those outside his political stronghold, as well as for many discerning analysts, the last five and half years have been nothing, but a prophecy foretold. The changing fortunes of the country have simply reinforced why they rejected him, and still repudiate his government
Five and half years is time enough to change the course of a nation. Luiz Inácio Lula da Silva, the widely popular leftist politician who ran Brazil between 2003 and 2010 was able to propel 20 million Brazilians out of poverty with significant progress being made in less than five years. Under his leadership, the value of Brazil’s currency more than doubled against the US dollar, unemployment was at a record low, and illiteracy dropped.
It is a spectacular contradiction to the current administration whose policies have seen the naira fall by some 250 per cent since 2015, with unemployment at a record high and the country possessing the highest number of children in the world who are not being educated.
Rwanda is often touted as an example of what African states could achieve if only, they were better governed. Out of the ashes of a horrific genocide, President Paul Kagame has resuscitated the economy, curtailed corruption and maintained political stability.
This is a record that many other leaders can only dream of, and has led to Rwanda being cited as an economic success story that the rest of the continent would do well to follow.
Since 1978, more than 850 million people in China have escaped poverty. Since Deng Xiaoping launched “reform and opening up” in 1978, China has pursued export-driven industrialisation, liberalised the private sector, welcomed foreign investment, and embraced global trade. As millions of farmers moved from fields to factories, they earned wages, saved, and sent their children to school. This, together with a surge in private entrepreneurship, helped to create the world’s largest middle class.
Data after data, facts after facts show an economy spiraling southwards; out of control of an obviously clueless and inept financial management team. Buhari inherited a fairly healthy economy in 2015; it was the third fastest growing economy in the world. His predecessors between 1999 and 2015, had managed to drive an economy that had one of the world’s highest economic growth rates, averaging 7.4% according to the Nigeria economic report released in July 2019 by the World Bank. Th economy had a surfeit of investor confidence. Five and a half years later, nearly 10 million jobs created mostly between 1999 and 2015 have been lost under Mr. Buhari, unemployment stands official at almost 30 per cent and inflation is soaring at 30.37%.
As noted by the World Bank, “Since 2015, economic growth remains muted. Growth is too low to lift the bottom half of the population out of poverty. The weakness of the agriculture sector weakens prospects for the rural poor, while high food inflation adversely impacts the livelihoods of the urban poor. Despite expansion in some sectors, employment creation remains weak and insufficient to absorb the fast-growing labour force, resulting in high rate of unemployment”.
Under his leadership, Nigeria entered into a recession in 2016, the first in 30 years. In October, Nigeria again slipped into its second recession in five years and its worst economic decline in some forty years.
In his well-choreographed 2015 campaign, strung together by the then dominant South-west wing of the party, Buhari promised to focus on three key priority areas when elected. He vowed to ensure the security of Nigerians by putting an end to Boko Haram and other forms of insecurity in the country. He threatened corruption and swore to kill it before it killed us and also covenanted with Nigerians, that the economy would change for the better.
In these three areas and more, President Buhari and his unimpressive team have failed and failed woefully.
The administration has gone about the business of running the economy in the most bizarre and obtuse manner, and ruining it well. It started with focusing on ‘fighting corruption’ as if that was the magic wand to growing an economy that in late 2015, was beginning to show signs of mismanagement from a president too tired to form a cabinet for six months.
Many of those who voted for Buhari in 2015 genuinely believed he was going to put an end to corruption or at least tackle it. According to Transparency International’s latest Corruption Perception Index, Nigeria ranks 146 out of 180 in its Index, slipping 10 places from 136th place when Buhari was first inaugurated in 2015. Thus, under Buhari, corruption has not reduced but runs rampant, expanding in size and intensity. He hasn’t been able to fight corruption as he promised. What is obvious is that Buhari has merely succeeded in replacing one class of ‘corruptocrats’ with a new class that has succeeded in capturing the state for their personal benefits.
The focus on ‘fighting corruption’ and mouthing anti-corruption slogans by the President and his team at the expense of putting the utterly debilitated economy in sound health has yielded next to nothing in the area of anti-corruption. As noted in an earlier analysis, in this government’s hypocritical war against corruption, former EFCC Chairman, Ibrahim Magu, huffed and puffed on every public platform available to him. Together with Mr. Buhari and the then visibly loquacious but now more reticent Prof. Itse Sagay, “they have threatened and arrested their political opponents, but have not yet secured any credible conviction in court. Perhaps if they sat back for once to do an introspective analysis of their colossal failures in this regard, they’d reach the conclusion that fighting corruption is never about breathing threats, throwing bombastic statements on Channels TV and slandering the reputation of Nigerians through press statements announcing their arrests for alleged felonies cum misdemeanours. Fighting corruption takes intellectual gravitas, hard work and good legal preparation which is increasingly clear are basic skills lacking in the drivers of this synthetic war against corruption”.
Every sector of the economy under this government has come under unparalleled internal shocks. Whether aviation, banking, manufacturing or service; the ineptitude and failure of government and government’s policies has adversely affected growth and development.
Former President Olusegun Obasanjo aptly summed up the dire state of the nation’s political economy under Mr. Buhari when he posited that “Nigeria is fast drifting to a failed and badly divided state; economically our country is becoming a basket case and poverty capital of the world, and socially, we are firming up as an unwholesome and insecure country.
“And these manifestations are the products of recent mismanagement of diversity and socio-economic development of our country.”
It was the award wining Nigerian Writer, Chimamanda Ngozi-Adichie, who spoke the minds of many when she noted, “The government of President Muhammadu Buhari has long been ineffectual, with a kind of wilful indifference. Under his leadership, insecurity has worsened…There is the sense that Nigeria could very well burn to the ground while the president remains malevolently aloof.”
Buhari in June this year committed himself and his government to lifting 100 million Nigerians out of poverty. The President’s commitment came two years after the country overtook India to become the poverty capital of the world. It is estimated that some 94 million Nigerians; nearly half of its population live in severe poverty.
Despite his fine promises, the reality is that Nigeria under Buhari is making little progress in eliminating poverty. The country only last month entered its second recession, while its social spending mainly on health, education and social protection has been described as “shamefully low”. And those meagre levels are reflected in reality as Nigeria is home to the highest number of out-of-school children.
The cluelessness and incompetence of Buhari’s government, according to Dr. Uche Igwe, a Senior Political Economy Analyst and Visiting Fellow at the London School of Economics Firoz Lalji Centre for Africa, “has impacted disproportionately the poor in a country that is said to be already hosting a high population of the world’s poorest citizens. Considering the increasing prices of food commodities, Nigeria’s decision to close its borders, despite being a signatory to the African Continental Free Trade Agreement (AfCFTA), may have been considered as something done in the country’s best interest, with the intent of improving local production and agriculture. But even with the continued closure of the border and huge investments in domestic agricultural production, nothing seems to have changed substantially.” In the last five years, the price of food items has risen steadily, with rice that used to sell for 9,000 naira per bag in 2015 now tripled up to about 26,000 naira. Everything sells for a lot more under Buhari, consequently impoverishing more Nigerians that he promised to help.
Despite social intervention programmes, including cash transfers to its poorest people since 2016, in a bid to reverse its extreme poverty problem, no significant progress has been observed in poverty reduction. On the contrary, the more the government spends money on poverty reduction programmes and projects, the more the number of poor increases. Thus, it is obvious that the allegations of widespread corruption around the Buhari administration’s poverty reduction programmes cannot be far from the truth especially as expected outcomes have not been met in any significant way, yet billions of dollars keep getting poured into an utterly unimpactful programme.
The reality is that the problem of Nigeria in the last five years has simply been an issue of bad economic policies. It started with Buhari in 2015, after assuming office making little or no effort to stem the flight of capital by institutional investors on one hand and Nigerians with excess foreign exchange on the other hand. Rather than calming the market, Buhari raged about going after monies that ‘cannot be accounted for’.
As foreign capital fled the country, the local currency weakened drastically with the Central Bank unable to design and deploy credible policies to stem the tide.
Buhari swore not to devalue the Naira in the first and second quarters of 2016, a move that sent foreign investors and the market into panic and doubt. For investors, it was the clearest indication that the president was interfering with monetary policies and the operations of the Central Bank. It wasn’t Buhari’s call to make, the CBN was supposed to be autonomous and determine policies with respect to the country’s currency. But Buhari and his close circle of advisers known as the Cabal intruded into monetary policy decision making. The Naira slumped in value soon after, speculators made a killing, the market slipped into uncertainty and inflation skyrocketed.
As aptly analysed by the former Vice-President for Africa of the World Bank and former Minister of Education, Dr. Oby Ezekwesili in 2018, “The President does not like the private sector. The first master stroke of the President that was let out to the private sector was his exchange policy.
“That exchange policy destroyed the economy and we have not recovered from it. So, private sector, at the centre of our economic drive, is going to shift a lot of things.
“If you want to create sustainable, broad-based growth, then what government must do is become the engine room of intelligent, sound economic policies, fiscal policies, monetary policies. The President did a disservice to this country when he, more or less, began to dictate monetary policy, which is supposed to be from an independent central bank.”
The government then sought monetary policy remedies to deal with fiscal policy problems. The Central Bank became the lead agency dealing with bad macroeconomic policies. And they have failed. Governor Godwin Emefiele restricted dollar supplies for imports on 41 products from glass to toothpicks that has since expanded to include diary and food.
By curbing access to dollars and deploying FX to friends of the government who then make billions of naira in arbitrage deals, the CBN simply drained Nigeria’s reserves from almost $50 billion in 2013 to below $24 billion in October 2016.
Furthermore, the failure of Buhari to allow the market determine the price of petroleum products, despite price of oil plummeting in the international market and with Nigeria’s biggest foreign exchange earner being crude oil, drove the economy into one of its most problematic headwinds that ultimately culminated in the partial deregulation of the downstream sector of the oil and gas industry. The government’s stubbornness simply meant that scarce foreign exchange had to be used to subsidise products importation to the tune of billions of dollars
On the whole, things have never been this melancholic on the economic front in more than two decades. It was the Nigerian Economic Summit Group (NESG) that recently criticised the Buhari administration for taking actions that left the economy prostrate for the last five years with rising inflation, contrasting GDP, unsustainable borrowing, a dwindling value of the naira, falling industrial capacity utilisation and frightening unemployment figures.
The group as noted by Dr. Igwe, “frowned at the huge sums of money disbursed in the Anchor Borrowers Program, which linked larger companies with smallholder farmers, despite many Nigerians remaining hungry. Likewise, the billions of naira expended by the government, ostensibly to contain the economic shock as a result of the immediate aftermath of the pandemic, had no significant result in alleviating the country’s poverty status. These stakeholders thus find valid grounds to demand necessary explanation and transparency from the government and Central Bank authorities”.
It is right to conclude that the last five and a half years has been in the words of the late afrobeat maestro, Fela, a trinity of sorrow, tears and blood. Nothing in the immediate future gives any hope of the economy changing for the better under the leadership of Buhari. He has shown himself to be indifferent to the failing of the economy and the pain of Nigerians. For Nigerians, it is a teachable moment. The dark outcomes of the votes of majority of Nigerians makes it sensible to reflect deeply and interrogatively before making critical decisions about who to vote for in the future. As the Nigerian economy diminishes in quality and quantity, the obvious lesson learnt is that votes matter.