Buharinomics: From Economic Recession to Citizens’ Depression and Finally, Capital Flight.
From two recessions in four years to the mass slaughter of its citizens during the end Sars protests, in October 2020. The Nigerian President is widely seen as catastrophic failure, quite possibly the worst ever, in the country’s troubled post independence history. where did it all go wrong for the erstwhile military dictator turned civilian leader?
When the national elections in 2015 were postponed by six weeks from the 14th of February to the 28th of March, political pundits and naysayers saw this as a sign of panic, that the gods of change were about to strike the polity. The Incumbent, Goodluck Ebele Jonathan on a visit to a southern power plant, two weeks prior to the election, had spoken of a great fatigue to the Chief Executive Officer and a general lack of motivation to fight the re-election campaign.
By the time the results began pouring in on the 30th and 31st of March 2015, it was clear that a political earthquake of seismic proportions had taken place. The Nigerian voters, completely exasperated by the inertia of the Jonathan administration, in its failure to account for $50 billion, later reduced to $20 billion, in remitted funds to the Nigerian National Petroleum Corporation, saw its Petroleum minister- Alison Madueke-Diezani as a lightening rod for its problems and were determined to make the ruling party (PDP) pay heavily at the polls.
It is against this backdrop that General Muhammadu Buhari, a man who had run the country, as military leader, for twenty months in January 1984 to the 27th of August 1985, when he was deposed in a coup by the then number 3 man (Ibrahim Babangida)of the Supreme Military Council, came into sharp focus. By the 31st of March,2015, at the fourth time of asking, the one ambition, he had, it seemed, had come to fruition. He was to become the President of the Federal Republic of Nigeria, with the might,perquisites and appurtenances of the office.
When he was inaugurated two months later on the 29th of May 2015, to great fanfare, President Muhammadu Buhari, relocated the Nigerian army to Bornu state to fight the terrorist group boko haram. It was at this point that alarm bells should have begun ringing- civil servants were appointed to run the government departments, while the new head of government was working out who would run which government department. In another part of Lagos, months later, police vehicles had gathered at the home of a former security head, Sambo Dasuki to arrest him for alleged corruption, during his time in office.
By October 2015, when the senate confirmation hearings had begun,five months after the inauguration of the new government, the economy had begun to show signs of trouble, at the time, the Naira was still holding up at =N=219 to $1. but the government’s ambiguous policy direction was starting to create a degree of confusion to the people who mattered- small to medium businesses- the very people who voted him, in the very place.
The ambiguous policy direction was to allow those going on the pilgrimage to mecca,in Q1 2016,exchange the Naira to the dollar at the rate of =N=199 to $1 and while simultaneously deregulating the currency market, which immediately led to the Naira collapsing against the dollar on the parallel market to =N=432 to $1. This inevitably led to the first recession of the Buhari government. To use the tennis metaphor, this was an “unforced error”, unwittingly transferring wealth to a small number of currency traders, to the detriment of the small and medium business owners.
On the 20th of October 2017, at a Macroeconomic presentation by Professor Doyin Salami, now working as economic adviser to the Nigerian government, A number of major points were made:
1.So long as the economy isn’t growing annually by 3.5%, the effects of the recession will be felt by the Nigerian public until 2020.
2.The growth/collapse of the economy will be shaped by politics.
3.The power of the incumbent going into the 2019 elections will be the major deciding factor.
National Elections 2019: Buhari Vs Atiku: The Sequel.
In the seminal book on Nigeria’s pre-colonial history by Messrs. Fawehinmi and Fagbule, titled: Formation, The making of Nigeria from Jihad to Amalgamation, we are treated to a very interesting piece of history; the match up between Atiku Abubakar and Muhammadu Buhari in 2019 was the sequel to one that took place in 1837, between men of the same names, fighting for the right to succeed the late sultan Mohammed Bello, the son of Usman Dan Fodio. The victory in the first match up went to Atiku, on account of his age, this time, there would be no repeats, the incumbent won.
On the 12th of April 2019, at yet another presentation by Professor Doyin Salami on the prognosis for the Nigerian Economy ahead of President Buhari’s second term, the following points were made:
- More taxes to be paid across board.
- The Naira is 10% over valued.
- A new governor of the Nigerian Central Bank, with implications for borrowing.
- Owing to the increase in minimum wage, the increase expenditure means government borrowing.
- Inevitability of high unemployment.
- 46 sectors of the economy are shrinking
- Removal of subsidies and Increase of VAT.
At the very same presentation, Professor Doyin Salami went on to point out that the President better understands complexity than he did in 2015, meaning that Nigeria would be the beneficiary of better decision making, right?
Well, what we have seen pre and post Covid-19, has simply revealed that as opposed to grasping complexity, PMB has sought to make the lives of his citizens a complete misery. By this, we must examine the policies of his government, since getting re-elected in February 2019.
One of the very poor decisions, was the closure of the Seme border, while the rationale behind the thinking was to harness local production levels as well as protect our agricultural sector, the unintended consequence led to arbitrary increase in the cost of food commodity, and by extension, the hardships of daily life. When the ban was lifted at the end of 2020, who were the beneficiaries? His Northern chums, Aliko Dangote and Abdul Samad Rabiu, not everyday Nigerians!
Nigeria’s debt profile currently stands at =N= 32.2 trillion ($84 billion), from =N= 11.2 trillion ($67 billion)in 2016. The borrowing undertaken by , unfortunately has been used to pay the salaries of government workers and so little has gone into capital expenditure and the repairs of the ever pervasive, aging infrastructure seen in and around the nation’s commercial capital, Lagos. Our increased spending has contrived to push the oil receipts dependent Nigeria, in year when oil prices in the West Texas Intermediary fell into the negative numbers, thus plunging the country, into a second recession in 4 years.
Looking at the numbers in terms of the unemployed and underemployed, the figures are in the region of 50 million people. The end Sars protest, which took place at the start of October 2020, was a cri de coeur, by the Nigerian youth against Police brutality,(so memorably described as “lazy” by President), had, had enough and went on a protest for the next fortnight, The protests which had a party atmosphere at the Lekki toll gate, came to an abrupt end, when the military were called in, by the governor and Buhari to disperse the crowd. The dispersal took place in the most brutal way imaginable, reminiscent of the 1970s and 1980s, when the soldiers were at their pomp. The numbers of people who killed by the Nigerian military stands at 39.
On Friday,the 5th of February, as a culmination of execrably poor policies from barely functioning government, the governor of the Central Bank of Nigeria announced that all banks were banned from trading cryptocurrencies, including bit coin. The one available avenue that Nigerians had to create wealth and look after their families…
The missteps by the Buhari government over the last 6 years have had the following consequences for Nigeria.
1.Foreign investors are falling over themselves to divest from the country using South African gold exchange traded funds to get their money out of the country. https://www.bloomberg.com/news/articles/2020-12-08/a-tiny-gold-fund-turns-into-gateway-for-capital-fleeing-nigeria.
2. The Contraction of the Nigerian Economy by 6%, the worst since the 1980s: Reference, Business Day Newspapers.
3. Human capital flight; with the Britain and Canada, being the destination of choice, for fleeing talent. America, totally out of consideration, due to another execrable leader, Donald Trump, in charge of things.
4. Ever worsening situation in the North East of the country.
5. Increased inflation, stagnating wages, high interest rates and dearth of economic opportunities!
In conclusion, let’s imagine all these points as Buhari’s scorecard, his school certificate, West African Examination Council results, which have never been publicly divulged, his grades will be as follows(A1 for exceptional brilliance and F9 for failure):
SUBJECT AND GRADES
- Economy F9
- National Security F9
- Agricultural sector F9
- Electricity Sector F9
- Communications F9
- Business Policies F9
- Leadership Skills F9
- Intellectual abilities F9
- International relations F9
- Currency management F9
It’s clear to see that PMB ‘s scorecard shows F9 parallel, thus making him the dullard of dullards, a clear unmitigated disaster. The very worst his country has produced since 1960.
Thanks for making it to the very end.