Buhari takes economy 10 years back, every sector worse than in 2015

By AYOOLA OLAOLUWA

On Monday, May 29th, 2023, the curtains would finally be drawn on the administration of President Muhammadu Buhari after having served the constitutionally allowed two terms.

Despite riding into power on the wave of his campaign promises to address the myriads of challenges the nation had found itself pre 2015 general elections, especially the worsening economic crisis, Buhari is leaving the sector in a more dire and precarious state, putting the newly sworn-in President, Asiwaju Bola Ahmed Tinubu, in a difficult position.

As a result of the sorry state the nation has found itself, the new president is left with no option than to act quickly to deal with the wide array of pressing economic, security and development challenges he inherited from his predecessor.

Based on the economic scorecard of Buhari’s administration compiled by Business Hallmark, the Daura born military leader turned democrat performed woefully in his eight years in office.

Unlike any other leader, he is leaving millions of Nigerians in economic misery and the country in pieces.

The scorecard is dismal. Apart from one or two undisputed achievements, especially in the area of infrastructural development, the retired general’s administration will be remembered for two recessions, untamed inflation, low foreign direct investment, huge national debt (both foreign and local), record unemployment rate, low productivity, as well as the unparalleled rise in human misery.

Meanwhile, the nation’s present predicaments are largely self inflicted. According to a business analyst, Bode Apantaku, Lead Partner at Apantaku and Co., the country’s dismal financial and economic outlook could be blamed on Buhari’s decisions and policies.

Many Nigerians, who spoke with BH said they are excited that the Buhari administration had become history, while hoping for better days.

A sector by sector evaluation of the last government’s performances showed that it scored below average.

CONSUMER PRICE INDEX

Undoubtedly, one of the biggest legacies the Buhari administration is leaving behind to Nigerians, is uncontrolled inflation.

When he took over power in May 2015, the Consumer Price Index (CPI) used to measure the level of inflation was 9.01 per cent. Fast forwarded to April 2023, it had skyrocketed to the rooftop, standing at 22.22 per cent, according to the National Bureau of Statistics (NBS).

While the CPI for May 2023 is not expected until the second week of June, experts are projecting another rise.

In fact, in 2016, inflation rate reached double digits and has continued to rise.

According to SB Morgen Intelligence, apart from pushing over 70 million Nigerians into poverty, rising inflation had wiped out a large portion of Nigeria’s middle class.

A BH survey showed that the average prices of key staples across major cities in the country have jumped by over 3,000 percent since May 2015.

UNEMPLOYMENT

According to data from the National Bureau of Statistics, Nigeria’s unemployment rate surged to 33 percent at the end of the fourth quarter of 2020. Since then, no other unemployment figure has been released since.

Meanwhile, when the immediate past administration took over power in 2015, Nigeria’s unemployment rate was at a single digit of 8.2 percent.

With no work to do, most Nigerians have being living from hand to mouth, while desperate unemployed youths have turned to crime, such as prostitution, Yahoo-Yahoo armed robbery, banditry and cultism.

Meanwhile, economists put the real unemployment and underemployment rates at 56.1 per cent in 2020.

Owing to inflation induced production costs, economic agents, particularly foreign investors, fled to safety with their investments, denying the nation’s already sapped economy the much needed Foreign Direct Investment (FDI).

According to the experts, this is evidenced by a recent NBS report, which put the number of Nigerians living in multidimensional poverty at 133 million.

WEAKENED NAIRA

Apart from galloping inflation, another unpleasant legacy the Buhari administration left behind is a weakened naira.

When Buhari assumed office in 2015, a dollar traded for N197. However, as of May 26, 2023, it had weakened to N461 at the official market and N761 per dollar at the parallel market.

The nation’s currency, which has been depreciating since the advent of the last administration eight years ago, worsened in July 2021 when the CBN stopped forex sales to Bureau De Change (BDC) operators in a desperate move to ease pressure on foreign reserves and support the official forex market.

However, the policy backfired when desperate Nigerians and businesses resorted to patronizing black markets for their forex needs.

The rush to the parallel market, unfortunately, has contributed to the free fall of naira in the parallel market.

Most business relying on forex for the purchase of raw materials and spare parts for their machines, are either producing at reduced capacity or totally shut down.

For example, almost $1 billion belonging to foreign airlines have been trapped in the country for several months, resulting in some airlines like Emirate cancelling flights to and from Nigeria.

While public officials argue that persistent inflationary pressures are structural and largely related to imports, financial experts blamed it on CBN’s restriction on forex.

FALLING GROSS DOMESTIC PRODUCTS (GDP)/RECESSIONS

According to available data, the nation’s Gross Domestic Products (GDP) growth rate averaged 1.1 per cent, pushing the country into two economic recessions under the Buhari administration.

The low GDP is blamed on several factors, such as unfavorable economic environment, i.e, excessive taxes on businesses by government agencies, lower productivity and weak expansion of economic sectors due to lack of basic infrastructures, like good roads, security and power.

For instance, the agricultural sector, which contributes the biggest chunk of the nation’s GDP, about 24%, was ravaged by insecurity throughout the eight years Buhari spend in power.

Though the administration was able to tame insurgency in the North East, insecurity soon spread to the North West and North Central, the food baskets of the nation, as well as the South East.

Many manufacturers and businesses also shut down due to excessive taxes on them. It is on record that no other administration in history introduced as many taxes as the Buhari administration fostered on businesses.

From Value Added Tax (VAT), Stamp Duty charge, and beverage tax to others, the past government contributed in no small way to the near collapse of the manufacturing sector.

In December 2022, the Manufacturing Association of Nigeria (MAN) disclosed that more than 2,000 members shut down operations in the last eight years.

INTEREST RATE

During the reign of the last administration, individuals and businesses had trouble accessing funds, while those lucky to access from banks paid premium in the form of interest.

According to a banker, who spoke with our correspondent on the development of anonymity, the maximum interest rate was 26.4 per cent in In June 2015.

“By the end of Buhari’s first term in 2015, the maximum lending rate had spiralled to 31.6 per cent, sending many businesses that could not afford funds out of business.

“The bank rate currently hovers around 50%, with the exception of blue chip companies that get rates below 30%.

“This high interest rate was exacerbated by the CBN’s policy to constantly raise Monetary Policy Rate (MPR) in the last one year.

“As you are aware, the CBN on May 26, 2023, further raised Nigeria’s benchmark interest rate from 18% to 18.5 percent.

“With the latest mark-up, lending rates are expected to notch up to 25 to 29 percent for prime borrowers and over 40 percent for high risk borrowers.

“Those outside the financial system maybe wondering why the huge gap, from 18.5 per cent (CBN) to over 40% by banks, but there are other sundry charges like management and insurance which add at least another 10% to the MPR rate”, the source stated.

DEBT

The debt trap, many economists argued, is Buhari’s worst legacy to Nigeria and Nigerians.

When he came to power in 2015, he inherited an accumulated debt of N6.17 trillion from the administration of former President Goodluck.

While Jonathan left total local debt of N5.62 trillion, foreign debt stood at $3.5 billion (about N548.65 billion, using the exchange rate of N156.7).

However, Buhari is leaving a humongous debt of N77 trillion for the incoming administration.

According to data from the Debt Management Office (DMO) and the Budget Office of the Federation, deficit financing under Buhari rose by 370.54 per cent in eight years, moving from N2.41 trillion in 2016 to N11.34 trillion in 2023.

A quick breakdown of the figure shows that every Nigerian owe N384, 864 as of May 29 when Buhari left office.

The World Bank in one of its reports in April 2023, said Nigeria used 96% of her earnings to service debt in 2022, leaving the country with almost nothing after paying interest on debt.

Meanwhile, virtually all Nigerians, who spoke to BH on Buhari’s scorecard, agreed that the former president and his ‘inept’ administration won’t be missed.