It is already the mid-term, two years, into a presidential tenure of four years for the President Muhammadu Buhari administration. The Economic Recovery and Growth Plan which is the economic policy framework of the administration was only unveiled in the first quarter of 2017, almost two years into the life of the administration. With just two years left to go, the late formulation and presentation show that economic governance did not get the necessary attention it deserved from the inception of the Buhari administration. The tardiness also reflected in the undue delay in appointing ministers which took over since six months after the President was sworn in; and the raising of Eurobonds for the implementation of the 2016 federal budget in the first quarter of 2017.
The GDP reports of the National Bureau of Statistics since the first quarter of 2016 show five consecutive quarters of negative GDP growth without concrete plans from the administration on how to exit the recession. Although the negative growth is slowing, there are still concerns about the growth dynamics in the coming one to two years. Unemployment and underemployment have been on the rise since the inception of the administration. There has also been a movement from single digit inflation to the top echelons before the 20 per cent mark. Clearly, this is not evidence of progress but one of retrogression.
Not a single megawatt of electricity has been added to the grid since Buhari assumed office. The promise to fix electricity within six months of assuming office has been turned into a mirage. Electricity distribution companies are not paying for the power supplied to them and thereby disrupting the entire Nigerian electricity industry revenue collection value chain. Power consumers have been subjected to extortion and have been forced to pay more for darkness after the tariff increase.
The combination of the power, works and housing sectors into one ministry is a great challenge that would task the energies of even the gods and when we remember that a mere mortal and human has been placed in charge of these three key sectors, we are compelled to shudder and question the wisdom of the decision. The three sectors should be split and each sector given to a competent core professional to manage as the minister.
The mobilisational and turnaround energy of the housing sector has been neglected considering its premier position as one of the greatest stock of wealth in every industrialised nation. The premier position of housing as the first sector to raise a fund – the neglected National Housing Fund seems to have either been forgotten or ignored by the administration. Ideas about tapping the double digit funds of the private sector for housing development will not go a long way in the face of obvious challenges of affordability that will attend to such housing development and in the face of dwindling resources of the private sector to be dedicated to the long term and strategic housing sector.
Capital importation has continued to decline over the two years leading to the lowest point in the First Quarter of 2017. The National Bureau of Statistics in the Capital Importation Report (Quarter 1 2017) stated as follows: “The total value of capital imported into Nigeria in the first quarter of 2017 was estimated to be $908.27 million. Although this was an increase of 27.75 per cent relative to the same quarter of 2016, it was nevertheless 41.36 per cent smaller than the value of capital imported in the previous quarter, and was the second lowest value recorded since 2007”. The right enabling environment to encourage organisations and individuals to bring in their capital into the country has not been established and something drastic needs to be done to engage the confidence of both local and foreign investors.
Monetary policy and fiscal policy have been uncoordinated and have not reflected the coherence needed to get Nigeria out of economic recession. This got to a stage in 2016 where the Minister of Finance and the Central Bank Governor openly attacked each other and the CBN called for a retreat to harmonise monetary, fiscal and trade policies. But this is coming at a time when there is an Economic Management Team chaired by the Vice-President. It is therefore not surprising that Nigeria is facing grave economic challenges. The Federal Government needs to reconcile the tight monetary policy regime with the need to spend our way out of recession.
In periods of grave national economic crisis, every nation needs a leader who unites and mobilises all the latent and potent energies of the people around the national cause of getting out of the recession on the premise that everyone will work and everyone is made to understand that they will be part of sharing the benefits of a rejuvenated economy. A situation where the leadership works on a “we and them” policy and where some parts of Nigeria are treated as expendable people will not augur well for national economic rejuvenation. The attempt to procure loans for railways that excludes the South-East Corridor of Nigeria, being a corridor that has the highest rate of mobility and possible passenger traffic, cannot be justified in economic philosophy, logic, reasoning and good conscience. Appointments to manage key national economic positions that are made on the bases of primordial sentiments rather than ability and competence will rather dig the hole deeper instead of getting us out of recession.
Agricultural productivity will not reach the desired level when herdsmen are allowed to run riot, kill, maim, destroy crops and livelihoods of settled farers and the administration looks the other way. For the agriculture economy to grow, there must be equality before the law and equal protection of the law.
The Federal Government’s budgets of 2016 and 2017 were presented very late in the year; the first on December 22, 2015 whilst the second came on December 15, 2016. The 2016 budget did not get presidential assent until early May 2016 whilst we still await presidential assent for the 2017 budget in the last days of May 2017. Again, this is contrary to the full gamut of the Fiscal Responsibility Act. Budgets are not enacted for the mere fun of it, but to provide clear directions and guides for the government, private sector and civil society on the way to move the economic performance to the highest level needed for economic growth and development.
Contrary to the clear provisions of the Fiscal Responsibility Act, which requires that Budget Implementation Reports be produced, published and disseminated within one month from the end of each quarter, the administration has published only two BIRs for the whole of the 2016 financial year. None has been published for 2017. The implication is that the government is in default of its obligations for four quarters now. This also calls up the issue of capital budget implementation. Available reports on the website of the Budget Office of the Federation do not present a cause to cheer. The fact that the Minister of Finance, Kemi Adeosun, claims some superlative performance of the 2016 capital budget without details is clearly a good case of the need for reforms in the area of improved fiscal transparency.