The Nigerian is undergoing is major transformation from what it was for 16 years under the PDP, and indeed, since the structural adjustment programme SAP, of the IBB regime in 1986. President Buhari is clearly and firmly reshaping the economy from what it has been to what he wants it to be. Buharinomics, as commentators have christen it is shifting the policy strategy of the economy from a private sector led to the re-imposition of government control and dominance.
Before 2015 when this government came to power, the economy had undergone some deep structural changes that was hailed by the major economies and multilateral agencies, and was positioning the country as a major investors’ destination. Beginning with the structural adjustment programme, the economy had metamorphosed into an emerging economy with a strong and vibrant private sector which is recognized globally as the engine of growth and economic development.
SAP required reforms and deregulation which led to the policies of privatization, removal of subsidy, forex deregulation and public sector rationalization. This policy produced the banking sector liberalization and the establishment of private banks; privatization of government owned companies such as oil marketing firms, banks, PHCN, etc, liberalization of the telecommunications sector with the coming of GSM mobile telephony, debt management, and partial float of the naira, as well as reduction in subsidy on agriculture and fuel.
When President Obasanjo assumed office in 1999, these policies in adopted and pursued although they were developed and implemented by the departing military government. Throughout the 16 of implementing these free market policies, the economy grew at an average rate of six percent, which was remarkable given the fact that the country was just coming out of crushing economic and political crises that crippled governance, especially with unstable oil price during the greater part of the period.
But all these seem like fairy tales now as the current government has virtually reversed all these policy gains and imposed command economy and state control where the government micro managed the economy and everything else. The reason according to President Buhari is that free market has been unfair to the north as it disproportionately benefitted the south to the detriment of the north. So his government is consciously redressing the apparent and perceived economic injustice to the north by ensuring that it balances the interests by official intervention.
In five years of this government not one of the over 1000 SOEs has been privatized even though government had listed some since 2017 as part of its revenue sources to fund the budget; which has further compounded the recurrent expenditure challenges and unwieldy nature of the public service. Fuel subsidy which at the height of the so-called subsidy scam in 2013 was about N400 billion annually has reached the dangerous level of over a trillion under this government.
One of the greatest achievements of the Obasanjo regime was securing debt relief for the country. Before he took power Nigeria’s debt stock was $34 billion, which given the country available revenue capacity was an overhang that posed an in-surmountable hurdle to development. Today, the debt stock has almost triple at $82 billion or N25 trillion N11 trillion in 2015, with another $3 billion coming from the World Bank for power development. This has been made possible by the borrowing spree of this government ostensibly to fund its social oriented policies to appeal to his mass base.
Rather than abate as a result o improved deregulation, taxes have been flying everywhere and nothing seems to escape the thirst for tax revenue. With the economy is dire strait, more taxes experts say would pushit further to depression and he tax incidence is passed on consumers. Also he Central Bank of Nigeria has been defending the naira which has seen the foreign reserves and ECA plummet in recent times. By April 2019, the CBN had spent $34 billion holding up the naira. The capital market which had boomed before this government is continued its bear run under this government.
This newspaper is worried by the turn of events in the economy and believes strongly that this is not the way to go for the future. Buharinomics, a policy borne out of anger and vengeance directed at a part of the country; and the policy thrust is obsolete, anti- development, and poverty oriented, and evidently not the way forward. In just four years of Buharinomics, poverty rate has grown from 42 million in 2015 to the present 98million making the country the poverty capital of the world.
Ironically, the people in whose interest the government is pursuing such ruinous policies are the worse affected, because of their lack of skills and exposure. As the economic space is narrowed and restricted further by the government, access and opportunities also shrink for many Nigerians. So the rate poverty is inversely proportional to the unwanted encroachment of government in he economy. The numbing question agitating the minds of Nigerians is whether the country will survive another four years of this retrogressive and retarding economic devastation.
We agree with most Nigerians in the appointment of the new Economic Advisory Council, EAC, by the president, but optimism is not a policy option. It is what the body eventually does that matters to the people and just its presence. Composed of eminent economic experts to confer strong confidence in the people, however, President Buhari has proved set in his own ways, indifferent to superior ideas and positions and unapologetic about his convictions however warped and discredited. This is our concern about the new team and we wonder whether their value would be appreciated to drive public policy.
This newspaper urges a return to what once worked for the economy because if it worked for some people and a part of the country it will work for all given the same situation. The economics of handouts and paternalism is discredited and anachronistic in modern economy. Members of the EAC must take the policy positions hey have been known for or quit, because in the final analysis, it is hey, not Buhari, that will be the ultimate losers.