SHAKA MOMODU; Buhari by his actions and inactions has accelerated the economy slide into recession"
situation – and is growing worse by the day. It is also no longer
news that this government is practically clueless on how to
manage this unenviable situation and prevent the country from
sinking even deeper into recession.
Granted, the economy was not in the best of shape when this
government took over power 15 months ago but revitalising it
was a major campaign plank of the All Progressives Congress
(APC).
The truth is this government by its actions and inactions has
accelerated the slide of the economy into recession and made a
not-so-bad situation far worse.
According to a recent report quoting MAN, 272 companies have
shut down in the last one year and 180,000 jobs have been lost
to closures.
In the last 16 years, the country’s economy grew exponentially to
become Africa’s biggest economy with a GDP of $574 billion
contrary to the narrative out there that has been disingenuously
christened “The 16 years of waste” by a crooked party, the APC.
In just just one year of Buhari in office, that GDP has dropped to
$296 billion. Is this progress or retrogression?
The truth is this government has practically crippled the private
sector which is the engine room of economic growth.
Beginning from from the Olusegun Obasanjo administration, the
federal government got serious and began to take steps towards
import substitution.
The managers of the nation’s economy at the time started taking
one commodity after the other, with a view to implementing
policies that would encourage dealers in such commodities to
transform from simply importing and trading in them, into fully
integrated local manufacturers.
Obasanjo’s effort resulted in a lot of investments in soft drink
manufacturing, leading to the rise of brands like 5Alive, Funman
fruit juices, Chivita, etc. It also resulted in the development of the
packaged-water manufacturing industry.
What was different when the Goodluck Jonathan administration
took office that this policy became the underpinning principle for
the transformation of the economy.
What was different in the Jonathan government approach to
import substitution was that it was developed into two broad
economic programmes with various components called the
Nigerian Industrial Revolution Plan (NIRP) and the Agricultural
Transformation Agenda (ATA)/Growth Enhancement Scheme
( GES).
While the NIRP was being implemented by the Federal Ministry of
Industry, Trade and Investment, under the leadership of Olusegun
Aganga, an expert poached from Goldman sachs, the ATA/GES
was anchored by a first-class agricultural economist and now the
president of the African Development Bank (AfDB), Dr. Akinwumi
Adesina, who were then ministers of Industry and Agriculture
respectively.
These two policy frameworks, which were inextricably linked at
many points, were being implemented in an orderly manner with
backward integration strategies, leading to massive investments in
cement production which invariably transformed Nigeria from a
net importer of cement with less than 5 million tonnes per annum
capacity, to a substantial net exporter with over 50 million tonnes
per annum production capacity, after nearly $20 billion had been
injected into the sector by private individuals with strong
government support through waivers and tax exemptions.
The same programme was being implemented for the fertiliser
industry, automobile industry, downstream petroleum industry,
petrochemical industry, sugar industry, rice production, cassava
flour in place of wheat and aquaculture industry, among others.
This plan plan, although not entirely perfect, provided a clear vision
and direction that seemed to lead the nation away from its
dangerous dependence on other nations for its essential
commodities.
Also it made progress quite rapidly because of the robust and
coordinated economic team which had a coordinator in the
person of the then minister of finance, Dr. Ngozi Okonjo-Iweala,
working in conjunction with other ministers and private sector
heavyweights to ensure a smooth implementation of the plan.
Entrepreneurs like Aliko Dangote, Abdulsamad Rabiu, Tony
Elumelu, and others were given waivers and tax exemptions as
incentives to invest massively in cement production and various
other sectors of the economy that significantly contributed to
lifting the economy to Africa’s premier status.
Wait a moment – imagine that people like Dangote, Samad, and
co. didn’t invest massively in cement production, and we were
still importing this all-important building material with the present
forex problems attendant upon importation of goods into the
country. What would have been the fate of the construction
industry? Today, the nation is waiting patiently for the Dangote
refinery with an installed capacity that surpasses that of the
nation’s four refineries put together to come on stream so that
the country can finally be able to meet the local demand for fuel
and put the ghost of importation behind it thereby conserving
foreign reserves.
It is is a shame that Buhari thinks including some members of the
private sector in his government’s economic team is not a good
idea. For the avoidance of doubt, there is nothing wrong with the
OPS trying to influence government policy in furtherance of growth
of local companies; it is for the ultimate benefit of the economy.
All the government needs to do is to strengthen regulation, weigh
and balance the quest for private benefits with the national
economic interest to take informed policy decisions.
Interestingly, and perhaps sadly, whenever Buhari travels abroad
ostensibly to woo foreign investors, he doesn’t travel with private
sector operators. Instead, his trips are usually packed full with all
sorts of strange nomenclature of naive government officials while
the entrepreneurs who can network and form business alliances
are left out in the cold all because according to the narrative, he
doesn’t want businessmen to hijack his government.
Ironically, the investors he is wooing from abroad are not
government officials of those countries, or are they? Those
investors are private sector operators who have attained global
acclaim due to the right policies and enabling environments
created by their home governments.
It is is quite easy to second-guess him on the economy had he
been in power for eight of the last 16 years. His attitude to
businesses and his lack of full appreciation of the fierce urgency
required to unsentimentally tackle immediate challenges are
responsible for where the economy has found itself today.
Also worrying and baffling is the insensitivity about some rash
decisions like the rushed implementation of the Treasury Single
Account (TSA) which has led to the loss of thousands of jobs
and put the financial system in a precarious situation.
Just look at the decision to order nine banks to remit over $2
billion to the TSA within 24 hours. How can any sensitive
government do that when even the CBN doesn’t have enough
dollars to fulfil its financial obligations? Why not allow the banks
to gradually remit the money to the TSA within an established
timeframe? The immediate result of that decision is the fall in the
value of the naira. Without a doubt, such a brash military-style
approach only further compounds the economic crisis in the land.
Now, what has happened to all those laudable programmes
inherited, expanded and implemented by the Jonathan
administration earlier referred to? The truth is that in the mad
frenzy to denigrate everything done by Jonathan, Buhari forgot
that he would be judged not on Jonathan’s record but on his own
performance. Everything done by the last government no matter
how noble or well intentioned became fair game and in the
twinkling of an eye was reduced to rubble in a brutal campaign
that entertained the mob but unfortunately, has not put food on
their table.
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