By OBINNA EZUGWU
In his article, ‘What Africa Must Do To Mitigate the Damaging Effects of Coronavirus,’ former Vice President and the presidential candidate of the opposition Peoples Democratic Party, PDP in the 2019 elections, Alhaji Atiku Abubakar strenuously sought to address the question of the effects of the COVID-19 pandemic on the national economy of Nigeria and indeed the African continent at large.
Aligning himself with the concerns of commentators who have consistently charged the Buhari administration to pay more than fleeting attention to the medium to long term implications of the ongoing crisis, he began by calling attention to the historic error of the incumbent administration exposing the nation to a collosally too thin manouvreing space on account of its cliff-hanger debt policies.
‘Before the novel Coronavirus pandemic hit the globe, Nigeria spent 42% of her earnings on debt servicing. We have arrived at a new reality today: even if we devote 100% of our income to rebuilding our economy, it still will not be enough,; he lamented.
Atiku, whose son was indeed one of the first to be linked in connection with the pandemic in these parts then went on to restate the core point made in his initial statement upon the outbreak of the pandemic that it was not exactly correct to say that Nigerians and Africans were immune to the virus.
As he reiterates: ‘we should not take solace in any false sense of security that nations like Nigeria are either immune to the vagaries of this plague or that we would not be as hard hit. The reason countries in the Western Hemisphere are reporting more significant numbers than developing nations is primarily due to the availability of testing and real-time information.’
Reaffirming that one of the attenuating factors may have been the delay in closing our ports of entry, he asked that going forward, and to give Nigeria and other African countries a better fighting chance in addressing all of the dimensions of the crisis, we should tap into the synergies of group negotiation at the continental level through uniting to ‘seek debt forgiveness, as a direct consequence of the impact of this pandemic on our economies.’
He has an additional reason why he thinks this point can be sustained: it is a crisis that has seemingly been introduced into the continent from outside:
‘And we have a perfect case because almost every African nation with a COVID19 infestation had an index case that originated outside the continent. Nigeria’s index case was Italian, Liberia’s was Swiss. Ethiopia had a Japanese index. South Africa’s index case was South African, but he and his family got infected in Italy.
This crisis should force a commonality of purpose in Africa. And more so in Nigeria. This is beyond politics. Beyond religion. Beyond region. And beyond ethnicity. As crisis go, this one can be described as existential.’
Building further on the economics of things, Atiku outlines some of the expected challenges that are already on the horizon:
‘Even when we are able to avoid a high human toll from this virus, we would not be able to escape a much higher economic toll. We may have a recession. The challenge right now must be to mitigate it, since we cannot avoid it. Already, we see forced currency devaluations from the Cape to Cairo. These will no doubt lead to internal inflation, which will spell trouble for nations like Nigeria, that have a high external dollar debt burden.
Already, the United Nations Economic Commission for Africa is projecting that Africa’s growth will at least drop to 1.8%, and maybe more. Bear in mind that, thanks to nations like Rwanda, Ethiopia and Tanzania, we had been projected to grow 3.2% this year.’
And what about Nigeria? The former Vice President did not go there but if the quick succession downgrades of the Nigerian economy by two leading rating agencies in the past few days is anything to go by, then it is clear that the Nigerian economic situation is not just about whether it would struggle with its pre-pandemic two percent growth rate, but about how low it would sink except something dramatic happens.
Compounding the problem is the all-pervading dependency in which the Nigerian economy continues to be embroiled. And Atiku Abubakar puts it in stark relief:
‘Faced with this crisis, Africa cannot even think of falling back on China, or the West. When a country like the US is struggling to supply its own healthcare workers with personal protective equipment, Africa will not feature high on its priority. Where China is wondering how to explain itself to the world when this dies down, our challenges will be far from their minds. We must fall back on ourselves, or we will fall headlong. We must take responsibility for navigating our way out of a challenge that was forced on us from outside the continent.’
For him then, the solution as plainly as it seems is for the country and continent to focus on building and boosting its internal productivity bases, and it is a point that aligns with the long-drawn clamour and campaign for the actualization of the African Continental Free Trade Area, AfCFTA, which incidentally is due to be fully flagged off in the next few weeks. Hear Atiku:
‘This is the time for every money made in Africa to stay in Africa. We have hospitals to build. We have economies to reboot. We have citizens to care for and return to work. We certainly should not be sending money out of Africa and into Asia and the West. Not now and not for the foreseeable future.’
Another point that the former Vice President touched on was that of the oil price decline that coincides with the season of the crisis. However, he is quick to make the point that that in itself should not be a crushing problem overall.
‘Oil prices have crashed, and that by itself should not be enough to trigger a crisis. After all, the current price of oil was lower than it is today when President Obasanjo and I assumed office on May 29, 1999. Yet we paid off Nigeria’s entire foreign debt.’
Touching down on the summary of the crisis, Atiku stops short of publicly endorsing muted calls for the rejigging of the Federal cabinet, if not undertaking a broader review of the size and relational structure of the political bureaucracy in the land. But without mincing words in any form, the Vice President uses the opportunity to make the point that the nation was clearly saved from the deeper shocks of the crisis that took place then because the government in which he had served then was better staffed, better equipped and did things much better:
‘…there are two remarkable differences. The first is that we had a stellar cabinet between 1999–2007. We had the right people manning our economy. We certainly would not have proposed to take out a $500 million loan to digitalise the Nigerian Television Authority, or devoted ₦37 billion to renovating the National Assembly complex (which was built from the scratch at less than 20% of that amount).
Today’s Nigerian government is severely lacking in qualified hands. And nothing proves this than the state of the Presidency itself. To think that after devoting ₦13 billion to the State House Clinic in the last five years, it is virtually useless as we face the most significant public health challenge of our national life. That is a pointer to the state of our federal government.’
Conceding however that the Obasanjo presidency ‘did not have to deal with a worldwide pandemic of this extent (although we had the H5N1 incident),’ he goes on to make the point that this is even more reason for a sefter handling of the crisis that we have at hand:
‘As it stands today, the world is too preoccupied with its challenges to prioritise Africa, and so we have to prioritise ourselves. The issue of Nigeria wanting to borrow $6.9 billion at this time shows the almost delusory state of our government. No one has that type of money to throw about.
China and America, previously our two largest creditors, have taken hits to their economies to the tune of trillions of dollars. If they could, they would consider taking from us at this stage.’
Building on this, Atiku also locates a corresponding structural mindset in the penchant of the current administration to adopt the almost first line approach of borrowing its way out of every problem:
‘Why is it that the Nigerian government is always quick to want to borrow at every instance? It shows a lazy mindset and an inability to take those sacrifices necessary to get the economy into shape. Worse still it proves that we do not, as of yet, have the ability to think outside the box for genuine solutions. We cannot be looking to borrow huge sums at the same time our officials are taking delivery of foreign made luxury cars. We cannot be considered a serious country when we refuse to cut down on profligacy and instead seek outside help to fund our inefficiencies.
Even in our own individual houses, when things get tight, the first thing we should do is cut down on unnecessary expenditure and then you look for creative ways to generate funds and develop our household economy, before we even seek outside funding. A situation where the Nigerian government always seeks outside funding, which, by the way has to be repaid if ever granted, displays an inadequacy in the thinking process of our leaders at the moment.
So, other than asking for debt relief, what can we realistically do to protect ourselves from the type of economic collapse that could lead to social upheaval in Nigeria?’
Now that he is on the plane of solutions, Atiku would not be stopped and we would not also interrupt him here:
‘We can start from where we have the most influence, the global oil industry. To save our economy, Nigeria must engage in immediate shuttle diplomacy to get Saudi Arabia and Russia to settle their differences and end the price war that is affecting the price of oil almost as much as the pandemic.
The Organization of Petroleum Exporting Countries (OPEC) cartel is more vulnerable than Russia right now. Yes, Russia is also vulnerable, but so are we. Russia has an almost stable gas market in Europe. We do not. So we are much more vulnerable. This price war is not just affecting Nigeria and Angola badly, it is also affecting the valuation of ARAMCO and delaying vital decisions, which are troubling signs.
Nigeria must bring her weight (like we had done in the past) to bear to force an early cessation of hostilities so that oil prices could start looking up.
And secondly, we must insist that the Abacha loots held back by various Western governments must be immediately and unconditionally returned to Nigeria. We have a humanitarian crisis on our hands. I believe that President Trump is a reasonable man. He knows that if nothing is done to avoid the foreseeable dislocation of African economies, the next wave of mass migration to the United States would not be from Mexico.
The worst thing we can do now is to wring our hands and look to outsiders. Not now. The leadership in Abuja and the rest of Africa cannot afford to be lethargic while the rest of the world is scrambling to save what they can of their economies.
In Nigeria, it is already clear that we must abandon the 2020 budget and come up with a more realistic budget. Our oil benchmark is way off the mark. And we are certainly no longer in a position to budget ₦100 billion plus for our legislatures and almost ₦50 billion for the Presidency (in truth, we were never in a position to do that).
Other African nations must likewise re-budget and reassign and reduce expenditure. We can not spend on luxuries when our necessities have exploded.
We are at a crossroads, and we need to think and act our way into taking the right road. History will forgive us if we make the wrong decisions, but it certainly will not forgive us if we take no decisions in the misguided belief that others will save us. If Nigeria does not save herself in this season of a global emergency, we may find that a new world order will emerge and we will no longer be the Giant of Africa. We may not even be the Giant of West Africa if we do not take decisive action immediately.’
The former Vice President has made his point. Agreeing or disagreeing with him would not even be the issue. There is a crisis. And there must be solutions.