As we approach the end of 2016, DAILY POST reviews some activities of the current government, looking at the economy, corruption, internal security, and other sundry issues.
It is expected that every administration that assumes power would pursue policies and carry out actions it believes would impact positively on the living standards of the citizenry and place the country on the path to sustainable growth. In other climes, elections are won and lost on the strength of the manifestos of the candidates and their parties. The manifesto encapsulates the economic policies to be pursued should such candidate or party emerge victorious.
Coming back home, it has been said in some quarters that the then candidate, Muhammadu Buhari of the All Progressives Congress, APC, and now President may have won the 2015 presidential election, not exactly because of a clear-cut agenda; it has, however, become clearer now that his administration is out to achieve the tripartite mission of fighting insecurity, tackling corruption and reviving the continuous ailing economy.
Buharinomic: Positive or negative?
The present administration came on when the economy is already heading south with the price of oil, which is the mainstay of Nigeria’s foreign exchange earnings on a downward spiral worsened by the sabotage of oil and gas facilities in the Niger Delta, which greatly reduced Nigeria’s crude oil production capacity. This came with the shortage of forex to cater for all the country’s import needs. Consequently, the naira has taken such a hit that it is now exchanging at almost N500 to a dollar, the highest ever in the history of the country, but the current government has re-echoed that what it met on ground would have taken the nation to its final damnation, if not for the prudent handling of the nation’s scarce resources by President Muhammadu Buhari.
The situation was made more complicated by the difficulty of oil marketers to access forex with which to import refined petroleum products. In view of this, long queues at petrol stations were a regular feature. The marketers had stopped importing petrol in the last quarter of 2015, blaming lack of policy clarity on the part of the Buhari administration. To resolve the impact of the biting fuel scarcity in the country, the marketers reportedly got the administration to increase the pump price of petrol from N86.50 to a maximum of N145 per litre, and were allowed an exchange rate of N300 to $1, although the interbank rate is N285, making it the secondary market where the oil importers are to source forex.
However, this total withdrawal of subsidy from the pump price of fuel, otherwise known as Premium Motor Spirit, PMS, is believed to have pushed Nigeria’s economy into recession as the commodity is a major input in all production processes in all sectors of the economy. The increase in the price of petrol increased the average cost of production and a corresponding increase in prices of goods and services in a classic case of cost push inflation.
Moving on, the Central Bank of Nigeria had in June introduced a flexible exchange rate system, meant to allow the exchange rate to be determined by supply and demand. But then, the delay in the release of the details of the policy led to further depreciation of the naira at the parallel market and resulted in losses in equities.
Addressing journalists at the end of the bi-monthly MPC meeting in Abuja earlier, the CBN governor, Godwin Emefiele said, “The MPC voted unanimously to adopt greater flexibility in exchange rate policy to restore the automatic adjustment properties of the exchange rate. Consequently, all nine members voted to hold and introduce greater flexibility in managing the foreign exchange rate.” The Manufacturers Association of Nigeria, MAN, reacted to this policy through its President, Dr. Frank Jacobs, thus: “The recent deregulation of the forex market may be seen as a partial solution to the forex challenge the country is facing; but in reality, the scarcity of forex has not abated.
“Consequently, manufacturing companies found it extremely difficult to source forex for the importation of essential raw materials and this has led to a number of closures of affected companies.
“In addition, discordant policy measures and pronouncements emanating from the various arms of government (Presidency, CBN, Finance Ministry) did not help matters as manufacturers found it difficult to plan their production.”
Meanwhile, the apex bank directed commercial banks and other authorized dealers in the foreign exchange, FX, market to ensure that they channel 60 per cent of total FX purchases from all sources (interbank inclusive) to manufacturers strictly for the purpose of importation of raw materials, plant and machinery.
But this has been approximated as a hoax by MAN, whose president stated: “As far as I am concerned, it hasn’t worked. Our members have not benefited from it. I came close to calling it a hoax in the sense that it was something they dangled on our face without substance.” The CBN had taken the decision following its review of returns on the disbursement of FX and observed that a negligible proportion of FX sales were being channeled towards the importation of raw materials for the manufacturing sector without having to wait for the banks for weeks and months on end to smile their way.
But the Lagos Chamber of Commerce and Industry, LCCI, is not comfortable with the allocation of 60 per cent foreign exchange to the manufacturing sector as it described the directive as one of the policy inconsistencies of the government, making it difficult to regain the confidence of investors.
Its president, Muda Yusuf, who stated that the major challenge facing the Nigerian economy at this time was the inability to regain the confidence of investors, both local and foreign, said: “Regrettably, the instability and inconsistency in the foreign exchange management policy have been complicating matters.”
He went on to posit that, “The economy has a major structural defect of being heavily import-dependent. This cannot be fixed in the short term. Therefore, the shocks arising from the collapse of oil price and the corresponding depreciation in the naira exchange rate were inevitable. But the policy responses could make a whole lot of difference in the profundity of the impact of these shocks on the economy and the citizens.”
Under the Muhammadu Buhari administration, the Treasury Single Account was totally implemented unlike under the preceeding administration when it was conceptualized to be implemented in phases. The hurried implementation, which has its own merits, has led to a massive shock in the financial system following the liquidity squeeze arising from the movement of government funds from banks into the consolidated revenue account with CBN. With the development leaving deposit money banks gasping for breath, they could no longer support small and medium scale enterprises which has led to a decline in growth of GDP in the services sector.
As it stands, Nigerians are yet to understand the direction of the government’s policy as it has not impacted positively on them yet.
NBS report on economy
Experts, however, believe that a clear testament of how the Buhari administration has fared in the management of the nation’s economy lie in the figures from the Nigerian Bureau of Statistics, NBS, for the second quarter of 2016, which affirmed that Nigeria’s economy is indeed in a recession having recorded negative growth in all the quarters in the year under review. The statistics indicated that GDP growth rate declined from -0.36 per cent in the first quarter to -2.06 per cent in the second quarter. While the fault may not be solely that of the Buhari administration and may be an accumulation of bad choices made in the past, the President is said to be culpable considering the time that he took in forming his government (inauguration of ministers) as well as the delayed passage of the 2016 budget.
As regards consumer price index, the grim figures indicated that inflation rate increased from 16.5 per cent in the first quarter to 17.1 per cent by the second quarter, while it was also revealed that most sectors of the economy experienced a decline in the second quarter GDP growth rate. Similarly, in the third quarter of 2016, NBS revealed that ‘’the nation’s Gross Domestic Product (GDP) contracted by -2.24% (year-on-year) in real terms. This was lower by 0.18% points from growth recorded in the preceding quarter and also lower by 5.08% points from growth recorded in the corresponding quarter of 2015. Quarter on quarter (unadjusted for seasonality), real GDP increased by 8.99% During the quarter, aggregate GDP stood at N26,558,952.83 million (in nominal terms) at basic prices. Compared to the third quarter 2015 value of N24,313,636.94 million. Nominal GDP grew by 9.23%. This growth was higher relative to growth recorded in the third quarter of 2015 by 3.22% points.
Corruption: Are we winning the war?
The above are not reasons enough to write off the efforts being made by the present administration as it is widely being projected that Nigeria will begin to turn the corner by next year. However, the onus is on managers of the economy to do the needful in boosting investors’ confidence and doing more to encourage local production of goods so that the scarce forex being wasted on the importation of certain goods and services that can be produced locally can be conserved. Besides, the ongoing anti-corruption war is one policy of the new government that has given the ordinary man the most desired hope, that no matter how difficult it may appear today, tomorrow is brighter as the country now has direction, and heading to a place.
Despite the daunting criticisms by some persons that the fight against corruption initiated by the current administration has been taken too far to the detriment of the country, many analysts are of the view that the anti-corruption is almost like a fight for the restoration of the nation’s ailing economy. They have argued that corruption and poverty in Nigeria and the entire African continent are undoubtedly intertwined. They probably must have taken a cue from a popular comment by President Muhammadu Buhari when he said at one of the campaigns preparatory to the 2015 presidential election that, “If we do not kill corruption in this country, corruption will kill Nigerians. I assure you, we will plough back the funds for good infrastructure. Nigeria, with my experience in the petroleum industry, we are more of a gas country than petroleum country and we have no business not having regular electricity in this country. If you remove corruption, we need at least five years to have steady electric power, because we have to take the gas out. The gas is associated. It comes out with crude oil. You need high technology to separate it, to transport it, store it and build the power stations. Meanwhile, you have to complement it with the existing power stations, by maintaining them quarterly,’’ President Buhari had said.
It has been deduced, therefore, from the above statement that the purpose of the war against corruption is contrary to some unpopular views that it is a deliberate attempt by the government to fight the oppositions and protect government allies. Even though it appears the confrontations of individuals like former campaign spokesperson to Goodluck Jonathan, Femi Fani Kayode, Ayo Fayose of Ekiti State and Nyesom Wike of Rivers State were attempts to shut out the opposition from their many critical viewpoints of the government, some Nigerians believe that ‘he who goes to equity must always go with clean hands.’ The feeling in some quarters is that those being trailed by the DSS, EFCC and other anti-corruption agencies contributed in destroying the nation’s economy.
It appears like an execution of a promise made out of the understanding of the problem of the country. It clearly speaks volume of Buhari’s understanding of the fact that the major problem militating against the progress of the country is corruption and that tackling same will drive the nation safely to a new destination and a new face among comity of nations.
With the relentless war launched against treasury looters, unimaginable sums of stolen funds have been recovered and leakages have also been blocked in several areas of government where politicians and individuals had earlier made their tapping sources.
One can only imagine how much would be injected into the economy from the proceeds recovered from looters by the current government. This is why President Buhari in the most sincere, honest and transparent way gave detailed accounts in June on how much his government recovered so far from looters.
The details of the recovered loots, published by the Federal Ministry of Information, disclosed that Nigerian government successfully recovered a total cash of N78,325,354,631.82, $185,119,584.61, £3,508,355.46 and €11, 250 between May 29, 2015 and May 25, 2016.
The details also provided the recoveries under interim forfeiture, which include both cash and assets, during the same period: N126, 563,481,095.43, $9,090,243,920.15, £2,484,447.55 and €303,399.17.
The government also anticipated repatriation from foreign countries to have amounted to: $321,316,726.1, £6,900,000 and €11,826.11.
The ministry went further to disclose that 239 non-cash recoveries were made during the one-year period.
The ministry divulged that the non-cash recoveries are farmlands, plots of land, uncompleted buildings, completed buildings, vehicles and maritime vessels.
This very transparent disclosure has further put to rest the doubt expressed by some individuals opposing to the current anti-graft war.
Analysts believe that the war against corruption has a far reaching positive effect on the economy as the time will come when the recovered loots and those stuck in the TSA will be injected into the economy. One can, therefore, imagine what the outcome will be if the above amounts and those in the TSA are released into the economy. Relatively, the recent order to the EFCC by the President that it should account for all the monies it recovered from looters using their offices and powers has further exposed the intention of Buhari to fervently use his anti-graft war to revamp an economy that had been bastardized by looters.
In addition, President Buhari has encouraged the EFCC not to be distracted by negative comments from some quarters about its operations, especially as they affect those who have been named in the now disreputable $2.1b arms scandal.
In this case, he is working on gathering money back to the nation’s coffer and at the same time strengthening the institutions responsible for the fight against graft. This is because it is believed generally that the nation’s economy will compete globally if corruption is fought institutionally and radically.
It is now glaring that the battered image of the country internationally has gradually been redeemed by the current government and it suffices to say that the war on corruption is making headway.
The challenges, however, is the inability of the current government to uncover new tactics employed by civil servants and politicians in high places, in order to loot government treasuries. Some believe that corruption is majorly being tackled selectively and not institutionally. The general belief is that those in government, including those in the cabinet of the President are into serious corrupt practices. This is evident in the series of allegations leveled against a few of those in government. A classic case is the recent report that officials of MTN allegedly gave a bribe of N500 million to Alhaji Abba Kyari, Buhari’s Chief of Staff to intervene and use his closeness to President Buhari to influence the federal government to give MTN a safe landing over the $5 billion fine on the telecom giant by the NCC. Until this allegation is proven to be false, Nigerians will continue to doubt the credibility of the President’s anti-corruption war.
In a related development, a DSS report had in the year under review indicted the head of the Economic and Financial Crimes Commission, EFCC, Ibrahim Magu of maintaining a relationship with an indicted retired Nigerian Air force officer, Commodore Umar Mohammed.
In a 15-paragraph letter to the senate, the DSS said its investigation conducted on Magu had revealed that in August 2008, following a search at his residence during the tenure of Mrs. Farida Waziri as the EFCC chairman, some sensitive documents that were not supposed to be in his possession were found.
The report also said the discovery resulted in his detention and subsequent redeployment from EFCC back to the Nigeria Police Force after which he was suspended from the Force.
The report further said that in December 2010, the Police Service Commission (PSC) found Magu guilty of “acting prejudicially to state security, withholding files, sabotage, unauthorised removal of EFCC files and acts unbecoming of a police officer and awarded him severe reprimand and punishment.”
These, among other allegations, has put Buhari’s anti-corruption fight on a dangerous pedestrian, hence it must come out clean in order to win back the support of Nigerians in his anti-corruption campaign as most people, including his wife, Aisha Buhari believe the government has been hijacked by some people claiming to be close and loyal to him.
Nigerians at the losing end
Despite the success recorded by Buhari in the fight against corruption, the feeling among Nigerians is that it will amount to nothing if the ordinary Nigerian does not feel the positive impact of it. This is because despite the recovery of billions on naira, Nigerians are still going through hell; three square meal is now a major challenge in many homes. Parents have withdrawn their children from schools as they can no longer afford the payment of their school fees. Prices of foodstuff, especially rice got skyrocketed and news of people exchanging their children for bag of rice, stealing of pot of soup from fire and a host of others was continuously ‘reeled’ out in the media. Similarly, the fight against graft has not put an end to the very critical power problem in the country, as many in the year under review had lived in perpetual darkness, as the nation’s power industry performed abysmally.
The number of jobless youths and adults has increased unimaginably and the several projects by the government to create jobs for Nigerians have remained a mirage as takeoff has actually dragged almost into 2017 – nothing to show yet. But patience has become the ‘keyword’ as the government has continued to appeal for patience, assuring that things will change in no distant time.
Insurgency: Have we won?
One area the government in power has fared exceedingly great is the area of security and the fight against insurgency. Since assumption of power, Buhari has undoubtedly reorganized both the military and the police. This reorganization has impacted positively on the nation’s internal security. Incessant bombing of cities and towns across the country has now become a thing of the past. The achievement of the current government in this regard speaks for itself as almost all parts of the north east, formerly under the control of once feared Boko Haram insurgents have now been reclaimed by the military.
Though the military had suffered several casualties in the war with the killing of some of its finest soldiers, including Lt. colonel Abu Ali, it had further showed that its desire to end insurgents activities remains unquenchable with the recent takeover of the sambisa Forest.
That the government still gets crude from the Niger Delta region today is through the relentless security campaign by Mr President.
But one major challenge and threat to the current campaign is the detention of leaders of groups threatening the peace and security of the country. Government should, therefore, devise a better measure towards the handling of both the shiite group and Biafra agitators. Having a round table discussion with its leaders in detention and signing a peace agreement will help to resolve the crisis as confronting several wars at the same time will render the war against insurgency ineffective. We can’t fight in all fronts at the same time as we must know our friends and our enemies. We must make some of our enemies our friends to tackle the current security challenges. Victory will surely depend on our approach and not really via the barrel of guns and grenades.
Happy New Year.
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