Economist John Maynard Keynes once said that “In the long run we are all dead.” The problem with Nigeria’s economy is that it is being run by people who will be dead all too soon. When a 79-year-old leads a country with an average age of 18, a disconnect between the government’s approach and the people’s interests is inevitable.
The Buhari administration’s short termism and its disregard for what is left for future generations has set us on a path to ruin. Geriatric politicians are enjoying their golden years, treating government money as their pensions to run down, and neglecting thoughts of what inheritance they will leave behind.
Two announcements this week have demonstrated this. First, the National Economic Council declared that the country’s Excess Crude Account has dried up. Every year the government sets a budgeted price for crude oil and when the market price is higher, the surplus enters the Excess Crude Account. Despite having over $20 billion over a decade ago, there is now only $35 million left.
This cannot be explained by low oil prices, as the budgeted amounts are consistently below the market prices. In 2021, the benchmark was $57 per barrel, whereas the average annual price was $71 per barrel.
Mismanagement, wasteful spending and the callous calculation that the administration is in its final year before the president is term limited, have combined to leave the next generation without the safety net that they need.
The second example is how they have stored up problems that ordinary people will have to face once the administration is finished. The Buhari administration announcement that it has put off dealing with the fuel subsidy problem yet again is another sign of political cowardice. It is the equivalent of not putting out a fire on a house you are about to bequeath.
Despite being oil rich, chronic underinvestment in the downstream petroleum sector means we cannot refine our oil into usable fuel. This has led to us importing an astronomical amount of fuel. In 2020, the country managed to spend $43.5 billion more importing refined products than it earned exporting crude. The cost of failure to invest in Nigerian refining capacity is now there for everyone to see, as the subsidy programme sends billions of dollars abroad every year and Nigeria gets no closer to self-sufficiency.
Moving to a new model for the energy sector would entail short term pain as funds are diverted from subsidies to developing capacity, but over the long term it is the only economically rationale approach. The real problem is that the current administration will be long gone before the fruits are realised.
We know what happens to countries whose leaderships bury their heads in the sand about the structural problems of subsidy regimes. Venezuela and Lebanon were both subsidising fuel as their economies spiraled, right up to the point when there was literally no fuel left.
But at least Venezuela and Lebanon started as middle-income countries, whereas 40 per cent of Nigerians are living below the poverty line. We cannot afford to ignore the fundamentals of economics with the reckless disregard of those who do not need to worry about what will happen in a couple of years. And this is to say nothing of all the other long-term challenges we face, such as rising debt, environmental degradation, and providing jobs for a rising population.
The conclusion is clear. We need leadership that is more in touch with the generations who will live with the consequences of their policies. As a start, that should mean not selecting geriatric candidates for president who are clinging onto life. Instead, we should choose younger candidates who know the struggles people face in clinging onto their livelihoods. It means having someone who is concerned about what the country will look like in 2050, when Nigeria is the third most populous country on the planet, because they know they will live to see that day.
With the presidential primaries upcoming, this is the moment to call for younger candidates who are in touch with the people they will be responsible for. We do not have the time to delay the decisions we will have to live with for so long.
Adeyemi wrote this piece from Abuja
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