Published On: Mon, Jan 29th, 2018

Uncle Lai, you are wrong!

Olusegun Obasanjo, Ph.d, Nigeria’s President between 1999 and 2007 can be perplexing at the best of times and considerably irritating at the worst. His cavalier cheeriness and maverick buckishness makes him at times lovable and at others detestable, in almost equal measure. His recent letter to the current President, Mohammadu Buhari, was vintage OBJ (Obasanjo’s popular sobriquet).  He was blunt, merciless and yet fraternal. He scored the present administration poor on almost every count except its mixed security record, which he saw as decent in addressing the issue of Boko Haram but appalling when viewed against the growing incidences of Fulani herdsmen terror, random kidnappings and rampant ritual murders.

Expectedly the federal government’s response has been hesitant and muted except for a feeble attempt by the current information Minister, Lai Mohammed, to whitewash Obasanjo’s criticisms by presenting a counter argument on the government’s perceived expert management of the economy over the last three years, which has seen the country exit a niggling two-year recession by the second quarter of 2017. Mohammed was reported by the local media to have noted that, ‘today, most of the indices by which an economy is measured are looking up. Permit me to say, however, that Nigeria would not have exited recession through a mere order or if the administration had not made use of ‘good Nigerians’ who could help’.

The Minister’s statement is corny and queer. Nigeria exited from a recession last year because international oil prices reversed in favour of oil producing nations as prices started climbing from a low of $28 per barrel at one point in 2015 to over $50 per barrel for the better part of the third and fourth quarters of 2017. The New Year, 2018, has since seen international oil price scale up to $70 per barrel (average price for the year will simmer to about $63 per barrel). Non-partisan onlookers do not need to have degrees in economics to know that oil price increases are ‘exogenous’ to the economy, in other words they are externally-driven, and can in no way be influenced by domestic fiscal or monetary policy, it is therefore rather disingenuous for the Minister of Information to hint that the administration through its actions had improved the country’s economic fortunes, as a devout Muslim he would have done better reading prayer beads and saying a few Alhamdul lillah’s (thanks be to God) than cleverly or maybe irreverently poking fun at random fortune.

Indeed except members of the Organisation of Petroleum Exporting Countries (OPEC) and a bitter winter in Europe and America last year, coupled with faster-paced global economic growth (the International Monetary Fund (IMF) has revised 2018 growth upwards to 3.9 per cent) are part of the ‘good Nigerians’ that the Information Minister was referring to, his interpretation of economic events must be seen as a brilliant lateral swing of a size 39 golf club, the only problem is that rather than hit the ball in one flawless motion, the Minister decided to swing the club into the bush! In football terms this would be seen as an own goal!

Uncle Lai’s grand inventiveness (perhaps an offshoot of his days as the All Progressive Congresses (APC’s) head of Information and Strategy (or chief propagandist))also shows up when he makes mention of the nations external reserves which has risen from $28 billion in 2015 to $40 billion at the beginning of 2018. The 43 per cent rise in reserves is indeed remarkable, but here again it is more the result of a fortuitous dollar revenue rise than any specific policy of government.   Perhaps the Minister would pause at this point and review his perspective of the administration’s economic performance and take time off to consult his prayer beads and say a few Astagafurullah’s (God forgive me)to complement his earlier thanks to God for divine providence. Admittedly the administration has done a great job of curbing what threatened to be a depressing period of inflation at the beginning of 2017, but this has not been without crushing consequences, as youth unemployment stands at a staggering 26 per cent (the highest in ten years) and average unemployment rate at a nerve-wracking 18 per cent according to figures by the National Bureau of Statistics (NBS).  With population growth rate at 3 per cent per annum and annual graduation from various local tertiary institutions at about one million, the unemployment rate is heading towards a dangerous tipping point that could blow up in the country’s face as youth edginess spirals into a season of social hostility and violence, a reenactment of the Arab springs in North Africa and the Middle East in December 2010.

Over a period of two years (2016 and 2017) the country has lost a stunning 8 million manufacturing jobs with the jobless count still running higher as several of the strongest firms in the country survive on creaky life support machines as other weaker corporations’ slump to their graves. The Information Ministers silence on the national unemployment rate is instructive; it reflects the administrations artful reframing of critical policy achievements. Lower inflation rate (which has meant higher interest rates) has been depicted as a policy ‘ good’ while unemployment  an obvious policy ‘bad’ has been bundled off to an information ‘dark site’.

The Buhari administration started off with a hazy (and some would say crude) economic framework. The Central Bank of Nigeria (CBN) over the first six months of the administration had to steer both monetary and fiscal policy within unchartered economic objectives. This was like a one armed swordsman fending off an army of rogues; it works brilliantly in movies but rarely in reality. The CBN was made to keep a firm fist over domestic money supply and push policy rates up while fiscal policy was allowed to stall as the country waited for a substantive minister. This unnatural event was worsened by the introduction of the Treasury Single Account (TSA) which sucked out a whopping N5 trillion from the financial system and throttled the economy into a gaping economic recession. True, international oil prices had fallen from $114 per barrel in mid-2014 to a relatively miserly $35 per barrel in 2016, but the severe impact of the price fall could have been headed off by the new administration if it had taken a more defensive and targeted approach to fiscal policy earlier on in the year. The lack of fiscal direction and rigor turned a rain shower into a storm.

Events got even messier when the new Minister of finance, Kemi Adeosun, came on board and found herself flailing her arms helplessly as the CBN turfed her out of her primary responsibility of managing the public treasury. With the CBN governor, Godwin Emefiele, fully entrenched as the chief economic choir master of the government, the new member of the orchestra, Adeosun, had to slowly claw her way into authority over government fiscal management. This cost the country considerable time and avoidable internal wrangling. By the time recession had set in and revenues had disappeared down dark rabbit holes, Adeosun was compelled to go on a public sector borrowing spree with the internal public debt figure exploding to N19 trillion by mid 2017. External debt had scaled over $64 billion, or the kind of bulge figure that was last seen in the late 1990’s.

Since the middle of 2017 the President’s economic team on both sides of the aisle appears to be better acquainted with one another but tight monetary policy mixed with lax fiscal spending in 2018 (a pre-election year) will bring out the beast in market confusion. High interest rates will slow down growth but larger budgetary spending would speed growth up, so which force will dominate? Nobody Knows.   A lot of imponderables will determine the direction and pace of economic performance in the course of the year, with a highly charged political environment with a thick overlay of ethnic rivalry and bitterness the tea leaves are stirring up in a confusing swirl. The Presidents credentials as an ethnically neutral, or at least equitable, arbitrator has been shot to smithereens and his laconic approach to fast tracking growth, especially in the south leaves him as a vulnerable  pigeon to be aimed at by all kinds of political hunters, tribal freeloaders and economic carpetbaggers. The Presidents inability to get out of his own way, by dumping primordial sentiments has left him naked and embarrassingly weak.

Uncle Lai may try to sell the administration’s economic feats as a sign of a successful Presidency between 2015 and 2019 but few people will listen to his lyrics. With growth becoming much less inclusive and income disparity widening by the day this is a tune nobody cares to hear. In fact the hottest new track on people’s audio players in the last few months is ominously titled ‘changing the change’.  Not a particularly inspiring song if you are a party faithful.



© 2018, Hallmarknews. All rights reserved. Reference and link to this site is required if you wish to reuse any article.

Reactions from Facebook

comments and opinions

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Most Shared

Recent posts

  • For the records: President Buhari’s address at the 73rd UN General Assembly (Full speech)

    STATEMENT DELIVERED BY HIS EXCELLENCY, MUHAMMADU BUHARI, PRESIDENT OF FEDERAL REPUBLIC OF NIGERIA AT THE GENERAL DEBATE OF THE 73RD SESSION OF UNITED NATIONS GENERAL ASSEMBLY IN NEW YORK, 25TH SEPTEMBER, 2018. Madam President, Fellow Heads of State and Government, Mr. Secretary-General, Distinguished Delegates, Ladies and Gentlemen, On behalf of the Government and people of […]

  • ELAN’s National Lease Conference Focuses on Stimulating Valuable Investments for Sustainable Growth

    In furtherance of its objective of promoting the business of leasing in Nigeria, Equipment Leasing Association of Nigeria (ELAN) has concluded plans to organise the 16th Annual National Lease Conference with focus on the economy. The conference is the highest gathering of stakeholders in the leasing industry and a platform for brainstorming on issues pertinent […]

  •  KIAKIAFX partners TURTLEWAX BDC on FX transfers

    KiaKiaFX, an indigenous Fintech company has signed a technical services agreement with Turtlewax BDC to promote the sale of retail Foreign Exchange (FX) where customers can exchange FX from the comfort of their homes offices via desktop, tablet or mobile device. Speaking in Lagos, the Managing Director, KiaKia FX, Abisoye Coker, said the digital platform […]

  • RMB seeks improved awareness on financial inclusion

    The Chief Operating Officer of Rand Merchant Bank Nigeria (RMB), Mr. Funso Odukoya, has called for increased awareness on issues around financial inclusion in the country. Odukoya spoke during a panel session at the 2018 Annual National Conference of the Finance Correspondents Association of Nigeria (FICAN), with the theme: “Banks, Fintechs and Nigeria’s Financial Inclusion […]

  • NDIC MD Emerges IADI Africa Regional Committee Chair

    The Managing Director and Chief Executive of the Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim, has been elected the new Chairperson of the Africa Regional Committee (ARC) of the International Association of Deposit Insurers (IADI). Ibrahim was elected during the Annual General Meeting (AGM) of the IADI-ARC, which was a prelude to the IADI Technical Assistance Workshop being […]

  • Full Communique of MPC Meeting


  • MPC retains interest rate at 14% for 13th consecutive times

    The Monetary Policy Committee (MPC) of the Central Bank of Nigeria on Tuesday for the retained the Monetary Policy Rate unchanged at 14 per cent for the 13th time. The CBN Governor, Mr. Godwin Emefiele, announced the decision of the committee at the end of a two-day meeting held at the apex bank’s headquarters in […]

  • 2018 budget: FG to sell 10 state-owned companies to raise funds

    The Federal Government may put up 10 state-owned companies for sale in the fourth quarter of 2018 to raise N289 billion for the funding of the 2018 budget, Joe Anichebe, a director at the Bureau of Public Entreprises (BPE), has disclosed. Anichebe said preparations are in the final stages for the sales of the companies, […]

  • FG to sell 10 public assets in Q4 2018

    The Federal Government has concluded plans to sell 10 government-owned companies for sale to selected investors and the public in the fourth quarter to raise N289 billion toward funding the 2018 budget,Bureau of Public Entreprises (BPE) has disclosed. According to Bloomberg report, preparations are in the final stages to begin the sale of the companies […]

  • Modric defeats Ronaldo, Salah to emerge FIFA’s Footballer of the Year 2018

    Real Madrid and Croatia midfielder Luka Modric has been named the Best Men’s Player at The Best FIFA Football Awards on Monday evening, fighting off competition from fellow nominees Cristiano Ronaldo and Mohamed Salah. The award caps off an incredible year for Modric, who won his fourth Champions League title with Real Madrid in May, […]

  • Nigerian bond market witnesses low demand

    A slowdown in client demand characterizes the bond market on Monday, unlike sentiments witnessed for the most part of last week. This is on the back of expected renewed supply at the bond auction on Wednesday, where the Debt Management Office (DMO) would raise a total of N90billion from the 2023, 2025 and 2028 maturities. […]

  • Oil price climbs to four-year high as Saudi, Russia turn Trump down

    Oil prices have hit a four-year high of over $81 a barrel after Saudi Arabia and Russia rejected calls by Donald Trump to increase production. Brent crude hit its highest level since November 2014 at $81.16 a barrel, up 3 per cent on the day. Saudi Arabia led the c oil cartel, while Russia is […]

  • Buhari releases N22bn to Nigerian Airways retirees

    The Federal Government has released N22.68 billion to settle part of the retirement benefits of former workers of the defunct Nigeria Airways. The government has also approved the release of N20 billion to revitalise public universities in line with demands of the Academic Staff of Universities (ASUU). Minister of Finance, Zainab Ahmed, made the disclosure […]

  • MPC set for another policy freeze

    By FELIX OLOYEDE Despite the outcry for lower domestic interest rates, the Monetary Policy Committee (MPC) is expected to leave the Monetary Policy Rate (MPR) at 14 per cent as it responds to inflation jitters ahead of the 2019 general elections, say economists. The MPC meeting schedule to hold today, Monday 24th 2018 and Tuesday […]

  • Ambode fights for his political life

    By OBINNA EZUGWU It is no longer news; the political love affair in Lagos state is in trouble. For the first time since 1999, a sitting governor is facing a real challenge from his own party for the ticket. The indignity can only be imagined and its implications continue to reverberate across the state and […]

  • Adeosun: Betrayed by a dysfunctional system (Editorial)

    A fortnight ago, former Finance Minister Mrs. Kemi Adeosun, resigned her position following the report of an investigative panel into allegations of NYSC certificate forgery against her. The allegation had been earlier made by an online newspaper, Premium Times, and the nation was agog with speculations about it. Her resignation has been interpreted by most […]