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.