It was a business lunch by a group of investors who had eagerly been
waiting for information about the business climate in Nigeria. But their
guest, top official of a multinational banking and financial services
company, who had spent a week in Lagos and Abuja before returning to the
United Kingdom, was evidently in no hurry as she sipped her drink. After a
while, she looked in the direction of one of the four men at the table and
said, “If I say 1 and 2 is equal to 12 what will 2 and 3 be?” The man did
not need to think twice before he responded: “The answer of course is 23.”
Please put me in your prayers…
I will soon be going for eye surgery…
The situation is getting out of hand…
For more than two months now…
Anytime I look inside my wallet…
I hardly see anything again.
—A distressed Nigerian
Shaking her head, the lady replied: “You are wrong, the answer is 5”.
Before the obviously confused men in the room could react to such
algebraic manipulation, the lady posed another question. “What if I join 3
and 7, what would that give me?”
This time, the man decided to hedge his bet: “The answer will either be 10
or 37”.
Smiling, the lady responded: “You are wrong again. The answer is 21.” And
then she added the clincher: “That is the best way to describe what is
going on within the Nigerian economy today where all the variables are up
in the air. The only thing that is predictable now is the
unpredictability.”
The foregoing conversation, which I learnt on good authority, took place
about two weeks ago in a high-class London restaurant, tells a compelling
story. But we need no foreigner to tell us how tough the season is since
we live it every day; even though Nigerians may have learnt to laugh at
their problems, as can be glimpsed from the “poem” with which I opened the
page.
To be sure, President Muhammadu Buhari is not the cause of our woes, as
most of the problems predated his administration. However, some of the
choices he has made (or refused to make) have compounded the situation
while there are no visible signs in the horizon that things would get
better any time soon. If anything, there are fears that things could
actually get worse, unless he makes a course correction in his approach to
serious issues of governance.
President Buhari was in Qatar in February this year, seeking investible
funds. I understand the Qatari authorities requested that he quickly
appoint the Nigerian ambassador to Qatar, someone with sufficient clout
and authority to represent our country so that a productive conversation
could begin. Five months after, such a simple task is yet to be
accomplished. In fact, as at today, Nigeria has no ambassador to any
country, not even to traditional allies like the United Kingdom or the
United States.
More than a year after dissolving the statutory boards of regulatory
institutions that are critical to the economy, they are yet to be
reconstituted. From the Central Bank of Nigeria (CBN) to the Nigerian
Electricity Regulatory Commission (NERC) to the Bank of Industry (BOI) to
the Nigeria Investment Promotion Council (NIPC) to the Security and
Exchange Commission (SEC) to the Nigerian Export promotion Council (NEPC)
to the Nigerian Deposit Insurance Commission (NDIC) to the Sovereign
Wealth Fund (SWF) to the Nigeria Communication Commission (NCC) etc. there
are no boards. Some of these institutions do not even have substantive
Chief Executives. Against the background that barely 24 hours after she
became the British Prime Minister last week, Mrs. Theresa May named her
entire cabinet, you wonder why our leaders find it so difficult to do the
little things that matter.
The office of the Chief Economic Adviser (which has a full complement of
staff, including some with doctorate degrees) is still vacant apparently
because Aso Rock does not need advice on economic matters. Meanwhile, the
president makes pronouncements which suggest he dictates both monetary and
fiscal policies from the Villa, leaving investors wondering about the
independence of critical institutions like the CBN. If political
considerations (including nostalgia about some imaginary past) rather than
sound economic judgments determine policy direction, which rational
investor would want to risk his/her money in such an economy?
Speaking at the Ramadan breaking of fast with members of the business
community last month, the president condemned what he described as “the
ruthless devaluation of naira,’’ saying that he was yet to be convinced
about the justification for it. “I don’t like the returns I get from the
CBN…In August 1985, the naira was N1.3k to a dollar, now you need N300 or
N350 to a dollar. I’m neither an economist nor a businessman (but) I fail
to appreciate the economic explanation” said the president who
incidentally provided the answer to a question he claimed not to
understand: “What has happened to us now is that we have maneuvered
ourselves into a mono-economy which led to the collapse we are seeing
now.”
That, Mr. President, is precisely the point. The wrong choices we have
made over the years landed us in this position but what we need right now
are solutions to problems that are already getting out of hand. On Monday,
the UN Office for the Coordination of Humanitarian Affairs (OCHA)
categorised the North-eastern part of our country as severely food
insecure. “This is about as bad as it gets. There’s only one step worse
and I’ve not come across that situation in 20 years of doing this work and
that’s a famine. We have to step in and quickly or we are going to have
hundreds of thousands at risk of dying in the north-east of Nigeria” said
Toby Lanzer, UN assistant secretary general and OCHA’s regional
humanitarian coordinator for the Sahel.
Unfortunately, this challenge is not restricted to the North-east since
hunger has become a national staple across the country as confirmed
yesterday by the Minister of Agriculture and Natural Resources, Chief Audu
Ogbeh. With majority of the states owing their workers, some for as many
as six months, the situation in Nigeria today is very dire. And while the
Buhari administration should be commended for its social intervention
initiative, it is also obvious that we need a more robust agenda to
reposition the economy away from oil.
For instance, in the ranking of states by the 2015 Internally Generated
Revenues compared to the total receivables from the Federation Account
Allocation between June 2015 and May 2016 done by the Economic
Confidential, only three states (Lagos, Rivers and Ogun) internally
generated above 50 percent of what they received from Abuja. 17 states
generated less than 10 percent of their receivables from Abuja; another
eight generated between 10 and 14 percent while the remaining eight
generated between 15 and 30 percent.
This is a clear state of emergency situation that will take more than some
episodic financial bail-outs or ad hoc solutions to deal with. It is a
situation that requires the president providing a national platform for
discussing the way out in a more sustainable manner at a period inflation
is soaring while businesses are either closing down or sacking workers. So
bleak is the outlook that the International Monetary Fund (IMF) which in
April, just three months ago, predicted a 2.3 per cent expansion in the
Nigerian economy, on Tuesday slashed its growth forecast, saying the
combination of plunging oil revenue and weakened investor confidence would
most likely push it into recession. The IMF now expects the economy to
contract by 1.8 per cent this year. But what is the response from the
administration?
At a most delicate period when there is an overflow of issues that require
legislative input, the presidency and the National Assembly are merely
tolerating one another. More depressing is the news that our lawmakers
have just voted for themselves a two-month holiday at a time of national
economic crisis. But what do you expect when the only notable contribution
to national discourse by some of our “distinguished” Senators is that a
female colleague has reached “menopause”?
Perhaps we should not be too hard on the lawmakers since the executive has
not come up with any legislative initiative that requires their urgent
attention. “I have, at least on three different occasions publicly
requested the executive to, as a matter of urgency, send an executive bill
on its intended reforms in the petroleum sector. We had hoped to avoid the
situation in the past two assemblies (6th and 7th) where the PIB was sent
to the National Assembly very late thereby guaranteeing failure to pass
the bill” said the House of Representatives’ Speaker, Hon Yakubu Dogara,
on Monday as he lamented a lack of urgency by the presidency in reforming
the oil and gas sector.
While no objective person will blame President Buhari alone for the
economic challenge we face today as a nation, many Nigerians nonetheless
believe things do not have to remain the way they are. According to Dr.
Aminu Usman, a lecturer in the Department of Economics, Kaduna State
University, “the government can do better by coming up with clearly
defined policies for each sector of the economy and move from wish list to
the actual work of getting things done.” On a lighter mood, a friend
suggested yesterday that, against the background of the current
controversy in the Senate, the economy may also be going through the
difficulty of being “impregnated” with fresh ideas!
With high incidence of unemployment, aging public infrastructure and a
near-useless power sector that generates (for officials) only megawatts of
excuses at a period the Niger Delta Avengers are daily wreaking havoc on
oil and gas installations, there are three major issues begging for
attention: Significant revenue shortfall from practically all sources;
potential credit crisis because AMCON is already over leveraged and a
seemingly intractable foreign exchange crisis that has shaken market
confidence. To address these fundamental problems, it stands to reason
that we need a serious economic management team but President Buhari still
does not see any need for that.
Sadly, after a year spent blaming others, we are yet to see the economic
direction of the Buhari administration or the policies and ideas that can
possibly justify the endless aspersions on the past. Yet, whether his
handlers realize it or not, this presidency will be judged not by how bad
a leader Dr. Goodluck Jonathan was but by how much of a better leader he
(Buhari) ends up to be.
In a four year presidential term, the first year is perhaps the maximum
time allowed an incumbent to heap all blames on his predecessors. After
that, he must take responsibility. Therefore, President Buhari can only
imprint his legacy either in terms of his firm handling of the
contemporary economic challenges or through the efficiency of the
machinery of government he puts in place. As things stand today, a
president who came to office with overwhelming public support may have
worsened the problems he inherited, leaving the economy on the brink of
recession.