Muhammadu Buhari: Two years after (3)
PRESIDENT Muhammadu Buhari and the All Progressives Congress (APC) were unequivocal about their promises to the electorate ahead of the March 28, 2015 elections. These included resetting the economy, creating jobs, fixing the power sector and shoring up the value of the naira. But two years after taking over the reins of power, the administration has made the situation more parlous now than it was on May 29, 2015. At the end of the first quarter of 2017, the economy, which had slid into recession since June 2016, recorded its fifth consecutive negative growth. Inflation is currently at 17.24 per cent and the prices of most items have gone beyond the reach of many Nigerians. The youth unemployment rate has reached an all time high of 45.65 per cent; electricity supply has hit rock bottom, companies are closing down in droves, the currency has had its worst outing under this administration, and agony in the land is now at an unprecedented level.
While it is public knowledge that the current administration inherited a poorly managed economy and attained power at a time when the prices of crude oil, the country’s mainstay, were very low, the immutable fact is that it is the government’s floundering that drove the economy aground. For about six months after taking over, the government left the whole country and the world in the dark about its policy direction. Since nature abhors a vacuum, the government’s taciturnity about its plan for the economy birthed speculations and insinuations. This created anxiety and uncertainty for foreign investors who opted to vote with their feet and took their resources to climes where they could safely predict what would happen to their investments. JP Morgan Chase, whose bond index is tracked by over $200 billion funds, was forced to delist Nigeria from its Emerging Market Bond Index because of the government’s vacillation about taking critical economic decisions. The inaction of government in those early days precipitated a number of events that resulted in the contraction of the economy.
The naira has been so battered under this administration that its exchange rate to the dollar moved from about N220/$ in May 2015 to around N520/$ in February 2017 simply as a consequence of the government’s hesitation to take the right steps. The government tried everything, including blocking out some items and arresting dollar hawkers, but nothing worked. However, while the hit or miss strategy lasted, the naira became worsted by other currencies. While the official rate was pegged at N197 to the dollar, it was going for over N500 in the parallel market, thus creating an avenue for government officials and others who had access to foreign exchange at the official rate to engage in round tripping.
Similarly, for the first 22 months of the life of this administration, there was no policy direction on the power sector as critical as it is to growing the economy. The operators were in confusion and could not make critical and crucial investment decisions. Even now, the regulatory agency for the sector, the Nigeria Electricity Regulatory Commission (NERC), has been without a substantive chief executive since January 2016. The effect was that while the population increased, investment in the power sector stayed stagnant. This caused a further stress on the already stretched facilities and power generation dropped, resulting in system failures becoming the norm. This triggered an increase in the cost of doing business and made local products uncompetitive with the attendant job losses.
While we acknowledge the slight improvement in the economy in recent times, the indecision of the government at the onset of the administration is at a great cost to the nation and getting back to the level the nation was in 2015 is at great pains to the people. For instance, after shilly-shallying for over 20 months, the Central Bank of Nigeria (CBN) eventually came up with a policy that has saved the naira from further plunge and the currency is gradually heading towards its 2015 level. But what would have happened if the right decisions had been taken in 2015? The economy would have been in a better shape and the citizens would have been spared the untold hardship they have had to weather. In leadership, vacillation is not fascinating because when the leaders dither, the people suffer.
However, in spite of the domineering pall in the nation’s economic firmament, a few things have happened in the recent past that elicit hope and indicate that the government may gradually be getting its acts right about restoring health to the economy. For instance, unveiling the Economic Recovery and Growth Plan (ERGP) which provides an economic compass for the country, signing the executive order on the ease of doing business, floating the N-Power scheme meant to provide employment opportunities to young graduates across the country and intensifying rail and road projects across the country are programmes which, if purposefully and sincerely pursued, have the capacity to stimulate economic growth.
We are encouraged by the determination of the government to revive the economy as expressed by Professor Yemi Osinbajo, the Acting President, in his speech to the nation on the occasion of this year’s Democracy Day and the commemoration of the administration’s two years in office. But we hope that the government will walk the talk and proceed from rhetoric to providing real solutions to the nation’s economic challenges. The greatest legacy this government can leave behind is a well-managed economy that gives the average Nigerian a chance to hope for the good life without lusting to become a politician or jostling to be named an aide to a political office holder.