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HomeExecutive BriefThe Buhari legacy of economic woes, is there hope for incoming dispensation

The Buhari legacy of economic woes, is there hope for incoming dispensation

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By Oludare Mayowa

In a few days, the administration of President Mohammadu Buhari will wind down while the change of baton between him and the next administration, expected to be headed by the former Lagos governor, Bola Tinubu, who was elected under the controversial election on February 25, takes effect.

From all indications, the Buhari regime will be remembered for three key issues that he anchored his campaign on in 2015 and promised to address, which he has failed woefully to deliver on all fronts.

First, he will be remembered for his failure as a retired army general that promised but failed to secure the lives and property of Nigerians across the nation during his tenure. His election in 2015 was anchored on his promise to rescue the country from insecurity; specifically, the Boko Haram insurgency was intractable under his predecessor.

He will also be remembered for his inability to improve the lives of Nigerians as the nation’s economy kept nose-diving in front of his very eyes while he was hapless to do anything about it. His economic policy and management rank among the worst on the continent and have left millions of Nigerians impoverished and worse off than they were in 2015.

Last but not least, he will be remembered for his permissive body language toward corruption and how the corrupt situation worsened during his tenure. At the end of his tenure on May 29, the Buhari administration will go down as the most corrupt since the inception of civil rule in 1999.

Unfortunately, these are the three areas in which he solicited support from Nigerians while he was campaigning to take over as the chief executive of this entity called Nigeria. He was very bullish about his conviction on the three planks, and many Nigerians believed him, especially in the area of security because of his background as a retired military general, and gave him their votes during the 2015 election.

He had promised Nigerians that he would combat corruption, revamp the economy, and improve security at all levels.

The presidential pardon granted to the former governors of Taraba and Plateau states by the Buhari administration recently has finally put a nail in the coffin of the government’s pretense of being an anti-graft crusader.

While the handling of the allegations against the ex-acting chairman of the Economic and Financial Crime Commission (EFCC), Ibrahim Magu, and many others in his government who have allegations of corruption hanging on their necks left much to be desired,

Prior to his coming as president in 2015, the security challenge was mainly restricted to the northeast part of the country, with Boko Haram being the main troublemaker in the country. Today, the battleground has expanded to every nook and cranny of the country, with new militia groups taking over a swath of the country’s territory.

The herdsmen, the ISWAP, the IPOB, the Yoruba nation fighters, and many more have taken charge of a better part of Nigerian territory, with our so-called retired general seeming helpless and unable to rein in the terror.

The economy has relapsed into recession twice during his tenure, while the country’s debt stocks have risen astronomically, with more companies closing down operations due to a lack of access to foreign exchange to procure raw materials and other inputs for production.

Today, Nigeria services its debt with close to 95 percent of revenue generation, about 90 percent of crude oil production is stolen, and the cost of living has skyrocketed beyond the common man’s reach. Many more Nigerians have sunken further into poverty with the high cost of food and basic needs beyond reach thereby reducing the quality of lives of average Nigerians.

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In April, the nation’s Director General of the Budget Office, Ben Akabueze, issued a red alert on the state of the country’s debt profile, saying Nigeria now has “limited borrowing space” due to its poor debt-to-revenue ratio and stressing that “trouble” looms for the country if it exceeds its limits.

Akabueze, a former banker and commissioner in Lagos, is warning on the heels of the request for approval for an $800 million World Bank loan by President Muhammadu Buhari to the Senate.

He pointed out that while Nigeria remains healthy with its debt-to-GDP ratio, the country is not with its debt-to-revenue ratio.

“You may have heard that we have one of the lowest gross domestic product-to-debt ratios in the world. While the size of the FG budget for 2023 created some excitement, the aggregate budget of all the governments in the country amounted to about N30 trillion. That is less than 15 percent in terms of ratio to GDP.

“Even on the African continent, the ratio of spending is about 20 percent. South Africa is about 30 percent; Morocco is about 40 percent. And at 15 percent, that is too small for our needs. That is why there is fierce competition for limited resources.

“That can determine how much we can reasonably borrow. We now have very limited borrowing space, not because our debt-to-GDP ratio is high but because our revenue is too small to sustain the size of our debt. That explains our high debt service ratio. Once a country’s debt service ratio exceeds 30 percent, that country is in trouble, and we are pushing towards 100 percent, and that tells you how much trouble we are in.”

This is the depth the Buhari government has dragged the nation to, and even at the twilight of his administration, he was still making requests for borrowing and making appointments to further deplete the nation’s resources.

The Buhari government is a disaster we, Nigerians, ignorantly brought upon ourselves, and the generation yet unborn will inherit the fallout of his misgovernance through a huge debt overhang, deep-seated clannishness, and huge corruption in governance.

Foreign investors have since fled the country as the environment became hostile for businesses, and many of them who had gleefully invested in the country are not able to repatriate the proceeds of their investment in the form of dividends or even capital invested as a result of a lack of access to foreign exchange.

Recently, the anti-graft agency, the Economic and Financial Crime Commission (EFCC), arrested the immediate past minister of power, Saleh Mamma, for allegedly stealing about N22 billion from allocations to fund Zugeru hydropower plants.

Under the watch of Buhari, people like Mamma, the Accountant General of the Federation, Ahmed Idris, and many of his aides and ministers were able to conveniently steal billions of dollars of the nation’s assets despite the anti-corruption stance of the president.

Last year, the local unit of Heineken, Nigerian Breweries Plc, sought alternative measures to ease the burden on its foreign investors, who have been unable to repatriate their dividends to their home countries due to dollar scarcity in the economy.

The Breweries firm gave its foreign investors the option of reinvesting their dividends back into the company instead of collecting cash, which they may eventually lose due to the devaluation and depreciation of the local currency while they are waiting to repatriate such funds back to their home country.

While this measure is reasonable, the flip side is that it will not encourage fresh capital inflow into the country; rather, it will send the wrong signal that the country is not ready to receive foreign investors into its economy.

What use is an investment if investors cannot benefit from the proceeds of their labour as a result of currency risk? This is the situation in which the country finds itself today as a result of mismanagement of the economy and a lack of courage to take bold decisions to revamp the economy and bring it back on the right path.

So, as a result of the miscalculation, the country is losing a huge opportunity to address the issue of growing unemployment, increase the capacity to expand the economy and reduce dependence on imports.

The country has, therefore, continued to depend on external borrowing, not only to sustain its balance of trade but also to reduce the erosion of its foreign exchange reserves and ensure the few companies left in the country are able to sustain the importation of input for their production.

Value for the currency is no longer the priority of this government, as the so-called investment in infrastructure is at variance with the huge resources committed to such projects.

Equally, the growing insecurity in the country is being fueled more by corruption than other factors. Both the security agencies and those who are directly in the saddle to procure platforms and equipment to battle the insurgents and terrorists are taking advantage of the lack of accountability to fleece the economy.

The fight against insurgence has been turned into an industry, with everyone involved milking the country rather than supporting the quest to end the insecurity in the land.

Without any doubt, the future of this country is threatened by the myriad of intractable challenges the people are currently facing. Today, a number of the country’s best minds are daily migrating for greener pastures outside the shores of the country due mainly to their inability to see a future here.

Those who are left behind are reeling from hyperinflation, an unsecured environment, and hopelessness.

Though it could be said that it’s not all doom and gloom as the government has managed to score some level of performance in some areas, those achievements are, however, negligible in the face of the huge gap and its impact on the standard of living of Nigerians.

For instance, the reconstruction of the Lagos-Ibadan Expressway, which was started by the government of President Goodluck Jonathan, is nearing completion after close to ten years since it was started and after huge resources was expended and pains were suffered by users of the road.

Also, there is a ray of hope that the much-talked-about second Niger Bridge, which links Asaba, the capital of Delta, to Anambra State and the entire southeastern region, may be completed before the president exits government on May 29.

The development of standard rail gauge, which links Lagos to Ibadan, is now running; the same is true for Abuja to Kaduna, though the attack on the train on its way to Kaduna in March last year has caused disruption in the operations of the train.

Some road construction is going on in many parts of the country, either financed by loans or by tax credits to some companies, which has helped reduce the carnage on our roads.

However, in spite of the pockets of development, the country remains more backward than it was when the president was elected in 2015, and the same is true in terms of division among the ethnic groups that make up the country.

The issue of ethnicity has become a prominent talking point among Nigerians as the president’s agenda of northernization remains a major setback to the unity of the country. Employment in government institutions has been reduced to who you know, your religion, and where you come from under the watch of our president.

The hallmark of good governance is the improvement of the welfare of the people, and anything short of that is mere rhetoric and a failure of leadership. In the last eight years of the Buhari government, the middle class has completely been whipped out, with many of them fleeing the country to greener pastures abroad, while those who remain in the country have turned to political scavengers for survival.

The outgoing administration of President Buhari will only be remembered for the pains suffered by the families of those who were abducted by bandits and the huge ransom collected before some of them were released, while many were also killed despite the payment of millions of naira in ransom.

Even as the government winds down activities, economists have warned that the incoming government may face a debt repayment crisis if nothing is done to tackle the spate of borrowing amid low revenue.

A professor of economics at the University of Ibadan, Prof. Adeola Adenikinju, has warned that Nigeria’s debt service to revenue ratio could exceed 100% if urgent measures are not taken to expand the country’s revenue base.

Adenikinju stressed the need for the incoming administration to prioritize the expansion of the revenue base in order to avoid a debt crisis.

He said, “If care is not taken, the debt service to revenue ratio may exceed 100%. Hence, the incoming administration must place emphasis on expanding the revenue base of the country significantly.

“Hence, it must ensure that debts are incurred to finance productive investment that can finance itself and contribute to economic growth.”

Also, a professor of economics at the University of Kaduna, Seth Akutson, said, “Actually, it depends on the incoming government on how they want to do it. It is about doing the right thing. The debt is not an issue, but how you utilize those debts is. Can we account judiciously?

“Of course, what we are going to face with the incoming government is the repayment of the debt, particularly the interest that will be accruing, which may affect whatever capital expenditure that they are going to embark upon. We are hopeful perhaps that this government will bring the right people that will work towards debt restructuring or debt forgiveness.”

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138)

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