EbonyHerald Stores Ebony Herald News24
RE: OUR NASCENT DEMOCRACY
I wrote a piece in 2009 titled: “Our Nascent Democracy” when Nigeria just had ten years of unbroken democracy after returning to civil rule in 1999. Today, as we voyage beyond 25 unbroken years (I don’t know if our democracy is still nascent), some of the indices of societal decadence I wrote about 15 years ago like poor power supply, incessant fuel hike, hunger, bad road and various forms of corruption that made life so unbearable for people, have rather than improving, continue to go downhill with about 71 million Nigerians living in extreme poverty according to World Poverty Clock of 2023 and about 133 million people referred to as multidimensional poor according to National Bureau of Statistics in 2023. Bad as Nigeria is, student still graduate at 25 years old, why then is the case of Nigeria different as a nation that it cannot graduate from corruption, bad leadership and other societal festivities in 25 years?
The piece which was about the state of the nation then, come when Musa Y’adua as president was doing his best to turn around the nation’s economy he inherited from Obasanjo. But then, oesophagus (death) the thief of the mouth did not allow that period to last. As economic indices all over the world constitute major performance indicators for every political administration, history has always been kind to any leader who presides over an economic boom while the reverse is the case for a leader who leads an economic turmoil or an economic crunch. Now that we are 25, the common question in the heart of every Nigerian would be “how have we fared” in the last 25 years given the degree of hope we had in 1999 when we joyfully ta-ta military rule and embraced democracy?
At independence, Nigeria’s blue print for development which was a combination of policies, frameworks and reforms with the aim of providing a foundation for economic growth and development was so unique. As these policies were rolled out at independence with accelerated implementation during the oil bang in the late 1960s, 70s and 80s with great investment in vital areas of the economy such as agriculture, manufacturing, telecommunication and power, the atmosphere was green with elevated hope of getting to our promise land in a short time but then, incessant change of government with its instabilities such as corruption and failure of leadership set in. The various military interventions and hunger for power crippled these lofty objectives thereby making life so burdensome to common man each day.
When Nigeria returned to civil rule in 1999 and Olusegun Obasanjo took over, the lost hope of many Nigerians over Nigeria was again rekindled, particularly in his ability to redirect the course of the nation and bring about the reversal of wrong economic decision that were taken during the stretched military interlude. Not disappointing Nigerians, Obasanjo in his effort to address these economic challenges through the Bureau of Public Enterprises, embarked on privatization of the New Port-Harcourt and Kaduna Refineries with the sale of 51% of government shares to a consortium led by Bluestar Oil Services Limited.
This initiative was carried out by Obasanjo in order to increase the capacity of Nigeria’s four refineries with processing capacity of 445,000 barrels per day but operating below 70% with incessant management and operational crisis. It was also meant to end the era of refining petroleum product abroad so as to reduce the amount of foreign exchange the country spent on importation of petrol in order to strengthen local currency and increase purchasing power but this policy did not last as it was reversed by subsequent administration. And 25 years after, we still import fuel, our refineries are still not working to full capacity and foreign exchange has skyrocketed beyond imagination.
Power sector was not left out in Obj. reform as he commenced the National Integrated Power Project (NIPP) in 2004 to tackle deficient power generation and gas flaring in order to stabilize electricity supply. This project was thereafter subjected to undue political and economic scrutiny that later led to disruption in the whole process and the current sorry state of electricity in the country where about 85 million or 45% of Nigerians are without access to electricity.
Other such reforms of Obasanjo administration that did not yield much result because of lack of political will and continuity include banking reform. In 1999, Nigeria’s external debt was about $30 billion but with the debt cancellation agreement with Paris Club in 2005, Nigeria paid $12bn out of her debt and obtained $18bn debt cancellation from Paris Club. This miraculously dropped Nigeria’s total debt-to-GDP from 66.13% in 2002 to 12.39% in 2006 and 11.67% in 2007 when he left office. Today, Nigeria’s total external and domestic debt in third quarter of 2023 stood at US$41.59 and US$72.76 billion respectively. So, with the various reformations in the administration, within eight years according to a Data Services company in Oyo State, growth rate moved from 2.58% in May 1999 to 6.06% in 2007, unemployment dropped from 10% to 12.30% and inflation rate from 11.91% to 8.55%.
In the administration of Umaru Musa Yar’adua, growth rate moved from 6.06% in 2007 to 8.0% in May 2010, inflation from 8.55% to 14.10% while unemployment increased from 12.30% to 19.70%. In the administration of Goodluck Jonathan, growth rate dropped from 8.0% to 2.31%, inflation from 14.10% to 7.98% and unemployment from 19.70% to 6.41%. From May 2015 when Muhammadu Buhari took over to May 2023, inflation rate skyrocketed from 7.98% to 22.41% while unemployment took flight from 6.41% to a staggering 33.28%.
Despite that Obasanjo administration was imbued with various challenges, it is apposite to say that the discontinuity by subsequent governments with some of the laudable reforms and policies of his administration and the death of President Yar’adua were integral in the problems currently facing Nigeria. For instance, Obasanjo inherited exchange rate of N21.89 per $1 and left it at N128.28 per $1. His successor moved it from N128.29 to N149.99 per $1, Jonathan, from N149.99/$ to N196.95/$, Buhari from N196.95/$ to N461.06/$ while Tinubu shifts it from N461.06/$ to its current state of N1, 445.78/$.
So far in the fourth republic, available data from Nairalytics established that Nigeria’s economy in the first year of Obasanjo stood at 0.58% while the highest under him was 15.33% in 2002 before it fell again to 6.59% in 2007. Under Yar’adua in 2008, it was 6.76%, 9.13% in 2010 while it was 5.31% under Jonathan in 2011 and 6.22% in 2014. Under Muhammadu Buhari, GDP declined by -1.58% and 2.27% in 2019. Cumulatively, GDP average stood at 6.95% during Obasanjo administration, 7.98% during Yar’adua, 4.80% during Jonathan and Buhari decided to bring it to 0.3% thereby leaving the economy in its best between 2008 and 2010 than any other since 1999.
Economic indices in the one year of Tinubu voyage as aired by Channel TV Station shows that inflation has risen from 22.41% to 33.69%, GDP growth rate from 2.51% to 2.98%, interest rate from 18% to 26.25% and food inflation from 24.82% to 40.54%. With more fearful statistics, it is sad that the more we go, the less we grow as a nation and the more our leaders amass wealth because it has been generally agreed that leadership is the bane of Nigeria’s problem. President Tinubu should therefore know that so much is expected of him to turning things around.
He should be patient to always do his home work properly before taking policy decisions and not taking them before planning because evidence abounds so far that some of his policies in his one year in office were taken haphazardly. For instance, good planning such as provision of buses should have been on ground with other forms of consultations before announcing chaotically that “Fuel subsidy is gone”. Such hasty decision has also brought about some policy reversals in his administration such as the suspension of the implementation of cyber security levy and the cancellation of the distribution of N8,000 palliative to Nigerians.
Going forward, Tinubu , should know that any government policy that does not impact the public positively should be re-examined. He should therefore make deliberate effort to reduce government spending and focus more on revamping moribund industries so as to reduce unemployment, poverty and frustration in the land. Policies that will encourage investors and make Nigeria investment hub in Africa should be pursued. He should try and be intentional about bringing our refineries to work again because it is a big slap that we have refineries but yet refine our crude product abroad.
He should do well to launch and deploy the Compressed Natural Gas (CNG) vehicles for mass transit in Nigeria as promised so as to ease transportation. The mistake of the last administration with nominal ministers should be avoided, any minister not living up to expectation should be honourably shown the way out so they won’t take Nigerians for granted.
On the recovery of naira, no doubt Nigerians are in a hurry for development but as Kingsley Moghalu puts, “the country’s transition to an export-driven economy is necessary for the naira’s recovery.” This according to him is a long-term approach that Nigeria should adopt. Tinubu should therefore put a comprehensive plan in place that will make Nigerian economy a productive export-driven economy in order to strengthen our dear naira.
As part of the solutions given by Moghalu, Nigeria needs to raise interest rates in order to increase its foreign portfolio investment (FPI) so as to boost liquidity in the FX market. “One of the reasons is that the only way you can encourage immediate inflows that will stabilize the naira is not even so much foreign investment, it’s foreign portfolio investment, which is investments in the open market operations, treasury bills, [and] the stock exchange.” Tinubu administration should therefore diversify its economic base so as to create enabling environment for export oriented manufacturing to grow. With oil revenue, government should try to give loan to domestic industries so as to increase local production because this democracy must work.
Olushola Omogbehin a Public affair analyst writes from Abuja FCT Nigeria
