Four months ago when President Muhammadu Buhari was sworn in to office, the Nigerian economy was in crisis. At the time of the swearing-in, two major problems confronted the Nigerian nation. Ostensibly, the most immediate problem was security, especially the problem of Boko Haram insurgency, which had grown from being a minor bushfire to a major conflagration. The other problem was that of economic meltdown.
There are some who would argue, not including this newspaper that the Boko Haram problem was the most urgent. Obviously, President Buhari would count among such people, because he hit the ground running on the issue of security. A few days after he took office, he went into attack mood and confronted the challenges posed by the Boko Haram insurgency. It was a commendable move. Nevertheless, one would have expected the same measure of attention to the economic challenge. Indeed, we would argue that the problem of the economy should have attracted even more attention because the lesson of history shows that political problems, including security problems are often derivatives of economic problems.
The arguments have been made and sustained by many that the Boko Haram insurgency was a by-product of the economic dislocation some parts of the country, especially the Northeast, have suffered . In that sense, one can say that Boko Haram is, to a very large sense of word, an economic problem. It is therefore strange that President Buhari has not attended to the issue of the economy with the same zeal and enthusiasm or sense of concern that he devoted to tackling the Boko Haram insurgency. The truth really is that he has not attended to the economic problem at all. And that’s really strange. The message one gets or can deduce from his attitude is that the economic problem is not significant as many are making out. And that is surprising. The fact of the matter is that Nigeria is undergoing a severe economic challenge.
To begin with, oil, which is the mainstay of the nation’s economy, has lost its luster as the nation’s top revenue-earner. From the benchmark price of $140 per barrel, oil has fallen sharply to under 50 Dollar per barrel. That singular development has dislocated the base of Nigeria’s economy and exposed the vulnerability underpinning it. Nigeria has been a mono-product economy for many decades.The ever-soaring price of crude had continued to cover the weaknesses and fragility of the Nigerian economy. So, the collapse in the price of oil has had far- reaching consequences on the Nigerian nation. The value of the Nigerian currency, the Naira which derives its strength from the power of crude oil has suffered significant diminution.
Officially, the Naira has lost over 25 percent of its value, while unofficially the figure is even higher. The problem that has caused keeps mounting. In order to save the Naira from eventual collapse, the Central Bank of Nigeria has embarked on many orthodox and unorthodox measures, ranging from import restriction to outright ban and recently, also banned the use of the Dollar as a currency for bank transactions locally. Many corporate organizations are suffering. Many individuals and companies that depend on importation are suffering. Prices of mostly imported goods have gone up. Unemployment which was always a problem in Nigeria has become a monster.
Many companies have been unable to pay salaries of workers as at when due and many organizations are laying off staff. Even blue chip organizations like banks have had to readjust.
Indeed, things have hardly been this bad in Nigeria in a long time. All of these validate the position of this newspaper that the nation is facing grave economic problems. Our preferred approach would have been for President Buhari to declare an economic state of emergency, mobilize the Nigerian people and tackle these challenges in a systematic manner.
At the core of the problem facing Nigeria is over dependence on oil as the mainstay of the economy. The much talked about diversification of the economy has become long overdue, but we maintain that such diversification can not occur in a vacuum. There has to be a well-thought out approach to the problem. Unfortunately, that has not be forth coming. From the very beginning, the president ought to have appointed an economic adviser, just as he appointed the national security adviser. To have left that position vacant was to say the least, unhelpful. The result has been a vaccum in the economic policy formulation, and even implementation. The Central Bank of Nigeria is the only body in the last four months that is saddled with the responsibility of articulating government’s policies and executing same.
Economic policy articulation and implementation is outside the remit of the Central Bank. The core mandate of that bank is monetary policy, fiscal policy is within the ambit of the executive arm, but in a situation where there is no minister of finance and minister of national planning, economic policy has been left to languish. Consequently, the country has suffered and continues to suffer. The international community is aghast at the situation. Reputable rating agencies have had to take proactive positions like JP Morgan, which removed Nigeria from its International Bond Index. The situation is worrisome. The body language of the President does not indicate sufficient appreciation of the dimension of this problem. And that is very troubling. By his antecedent, President Buhari is not a free marketer. He is rather a nationalist leader who would rather promote a centrist approach to economic policy formulation.