ANNIVERSARY NOTES: Flip-flop in Buhari’s economic policies calls for no celebration

Never in the annals of Nigeria had it been known that virtually all sectors had recorded abysmal failure, resulting from what experts describe as flip-flop economic policies, witnessed since May 29, 2015 till 2017 first quarter.

Not even the baited hope that things would soon get better has reversed the disappointment registered in many quarters.

From the economists, the reality on the ground calls for cancelation of any sign of celebration to mark Nigeria’s democracy on Monday. They hing their assertion on the tortuous journey of anomie that has characterized President Muhammadu Buhari’s ascendency to power.

According to them, the mood of the nation should rather call for reflection on the policy inconsistency of the past 48 months, with a view to chatting a new course .

But the insistence of the Presidency that it was still early to judge the Buhari-led administration could see government officials going to the mountain top, on Monday May 29 2017, to reel out their perceived achievements.

However, both local and international investors, whose inputs are key to re-jigging of any dying economy, remain plausible judges to gauge how well the economy has done.

The administration did not know exactly when it first shot itself on the foot. But to observers, that was when the two key policy drivers of the economy: the Minister of Finance, Mrs. Kemi Adeosun and the Central Bank Governor, Godwin Emefiele could not hide their disagreement on the common denominator that could see the economy exit earlier from its first recession in its history, throughout 2016.

There was no hiding the face-off between the duo on what should be the definitive policy on solving the problem of ever-soaring interest rate in the country, which till date remains at 14 per cent, when South Africa has 6 per cent, Ghana 8 per cent and Kenya 9 per cent, since 2014, till the first quarter of 2017.

Similar uncoordinated pronouncement was noticed from the two officials over why the inflation could be left to hover above 17 per cent. While Adeosun voted for the benchmarks to be towards achieving targeting a single-digit benchmark, as index which influences a country’s gross domestic product to its economic growth, the CBN-led Monetary Policy Committee (MPC), has maintained that “any policy that force both the interest and inflations rates to come down by fiat would end up distorting gains already recorded in the system.”

However, it took the intervention of the Acting President (then the Vice President), Yemi Osinbajo, to reduce the row between the two officials from drawing two parallel lines in the Presidency.

But, going by the feelers from most economists and other experts, who volunteered comments on the matter to Ripples Nigeria, the country has all it takes to have saved itself from the present poor picture. They unanimously concur that failure of Buhari to accommodate advice of many on how to handle the economic front had put his administration on the line, economically speaking.

Dr. Solomon Ezemon, an academic with the Lagos Business School, reasoned that there is nothing to celebrate in a country that has in the past two years lost all responsibilities to its citizens, including affording them the basic needs of life: food, shelter and electricity.

“When it took Buhari six month to constitute his cabinet was when some us started seeing danger ahead. As if that was not enough, the National Assembly was carried away by its internal wrangling over who will be in charge of its leadership.

“That equally saw the first budget suffer all sorts of setbacks, including allegation of padding; to lack of funds to finance its deficit $2.2 billion. The fact that Nigeria missed the opportunity of preparing for the economic meltdown that was clearly hovering around since 2015 oil price war that reduced international oil price, was the beginning of the fall of the mark. And since then, every other action taken by government has been wishy-washy approach, which has led the country suffering from one administration into another. But many had thought that given the goodwill with which Buhari was ushered in, on his promise to wage war against corruption, there would have been a better performance.”

Prof. Pat Utomi of the Pan African Business School, who said he was a founding member of the ruling All Progressive Congress (APC) said there has not been any cause for joy for both the members of the party, and indeed, the rest of the populace.

According to him, the most worrisome of the scenario is the fact that all scientific approaches that led to economic growth of many countries are available in Nigeria, but why they could not be effectively implemented cannot be easily understood.

“There is no way that the economy will grow without having a well articulate private-sector drive it. The idea of having the Vice President, heading the Economic Recovery Team is begging the issue.

“The right thing would have been to allow a private sector practitioner with proven records to chair the Economic Recovery Team and to from time to time make its recommendations to government. But this has not been the case,” he stated.

Mr. Henry Moyo, an economist, puts it this way: “The cost of running business in Nigeria is incomparably higher than other developing countries. Not with high interest rate regime, which can never see any of the startups or even, existing older enterprises go for loan in any bank at the prevailing high rate? And when such is not possible, because of high interest rate, then why won’t the economy remain stagnant?”

In Paul Duruaku’s view, “Investors, both local and foreign, prefer to play in a system that gives room for the purchasing powers of the consumers to be growing always, not when unemployment is high out there. With inflation on the high side, scarcity of dollar being addressed with artificial pumping of dollar to the system, and the economy still hovering around oil and gas, there is still the fear that much is not on the table.”

Even former players in the Nigerian economy have not failed to raise the alarm to the hearing of the government. Among them include the immediate past CBN Governor, now the Emir of Kano, Sanusi Muhammadu Sanusi, who was the first among his contemporaries to draw the attention of the government to some vexed issues bordering on the economy.

Read also: Buhari’s 2 years a disaster, Nigeria will cease to exist if… –Fani-Kayode

He had specifically frowned at having multiple foreign exchange regimes for different sectors, warning that no international financial institutions, especially, the World Bank and IMF, would be ready to approve any loan for Nigeria until the country streamlines its forex policy.

Perhaps, that could be attributed to one of the reasons the application for $1.2 billion loan from World Bank/IMF, with which to finance the 2016 budget, has remained with the banks till date.

There is still the controversial total loan package of $29.5 billion, for a long-term borrowing package for Nigeria, which the National Assembly is not in a hurry to deliberate on, resulting from many war fronts it has opened with the executive.

Prof. Chukwuma Soludo, also former CBN Governor, has not been silent in telling the policy makers that their approach to solving the country’s economic woes would lead to nothing.

He has at different fora advocated a system-change that could attract more investors outside oil and gas and review the current internal revenue system, which tend to be favouring double taxing the willing tax payers.

As if there has not been enough said, other experts, both in and out of the system have collectively said that the country’s road to economic recovery is far from being on the right track.

For instance, the disagreement with the IMF by CBN on devaluation of the naira is still raging in all meetings with the officials while debate over the possible exit date of Nigeria from recession, being impossible in 2017 is backed up by the National Bureau of Statistics, in its May 2017 report . The report stated that rather than increasing, the economy has been shrinking on an average of 0.5 per cent in the past two years, even up to the first quarter of the year.

This appears to have given credence to the recommendations by IMF that Nigeria can only be better off by selling off government interest in all the national assets as its only means of having enough funds and for it to have earlier exit from the economic meltdown.

But the fear of most analysts has remained that, if Buhari administration fails to put its acts together by checking the persistent decline in economic growth, the next stage of the economic crisis could be depression, which could see the country passing through a worse road than it had found itself since 2016.

However, Emefiele has expressed concern over what he termed the excess borrowing profile of the government, which he said the MPC, at its May meeting had noted.

But in all, the government has remained upbeat that with the removal of all the constraints that make business registration near-impossible, through the Executive Order signed recently, a lot of investors’ would be attracted into the country.

Further optimism has been shared by Udo Udoma, Minister of Budget and National Planning, and his counterpart, Minster of State, Petroleum Resources, Ibe Kachikwu who have, separately, maintained that there is still hope of early economic recovery, given the positive inputs from the oil and gas, and the non oil sectors, which are now projected to have 75 per cent and 25 per cent contributions, respectively, in the 2017 budget, unlike what had been the case before the recession period.

How much government’s push impacts on the health of the economy remains a subject of great debate. On the whole, the average Nigerian continues to have little faith in these debates, trusting more in how government’s economic policies have put food on their table.

 

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