Economy: Buhari’s Second Coming Reflects His First Coming |The Republican News


Image result for President Buhari in sober mood

President Buhari

By Chinelo Obogo

Though the context and situation in which President Muhammadu Buhari emerged as Head of State in the past may have been different, the country’s multifaceted concerns, which have precedents throughout history, have remained the same. This report examines the similarities between Buhari’s former and present administration, and if his views, methods and economic policies have remained the same over the years or if there has been any change.
When President Muhammadu Buhari overthrew Shehu Shagari in a military coup on December 31, 1983, he promised among other things, to stamp out corruption from the country. The aim of the coup, according to him, was to save Nigeria from impending economic and political collapse.
At the time, Buhari’s take over appeared to enjoy the support of many Nigerians, because the Shagari administration was already plagued with allegations of corruption. The consensus then was that the alleged corruption and incompetence of the Shagari administration had made the coup inevitable. Among other promises, Buhari’s regime vowed to entrench discipline, and he put much energy into investigating the corruption of the Shagari administration. In preparing tribunals to try the accused, over 400 people were put in detention.
Buhari’s administration instituted a War Against Indiscipline (WAI) campaign to fight laziness, lateness, examination malpractice and disorderliness, and the positive effects of WAI was tremendous, such that it became his legacy. His administration began recovering stolen funds from politicians and other public officers through special military tribunals.
In the area of security, he was applauded, especially as he was able to successfully crush the notorious Maitatsine sect. As a commanding officer of the Third Armored Brigade at Jos, Buhari played a leading role when former President Shehu Shagari destroyed the Maitatsine riots of 1980 in the Bulumkutu area of Maiduguri. The founder of the sect, Mohammed Marwa was alleged to have been killed in 1980, but his people continued killing. When Buhari became head of state, a fraction of the Maitatsine group that escaped Jimeta, Yola, started attacking Christians and Muslims alike. Buhari sent a military expedition and defeated the uprising, but with a heavy toll on civilians.
Many weeks after he took over, he delayed in presenting a national budget.  By the middle of his tenure, much of the economic issues that characterized the First Republic had returned. There was a decline in the economy, and food and other imports including palm oil and rice were high. In trying to save the economy, Buhari’s regime imposed austerity measures, which came with constraints. The economic policy of the regime included a currency change in 1984, which came two weeks before the delayed budget of 1984. Despite his efforts, and the collapse of oil prices, the country’s earnings fell by more than half, and the economy went into a recession. Other measures taken to revamp the economy involved the closure of borders, wage freeze, cut-back on government spending etc.
The austerity measures employed by the Buhari regime, led to mass sack of civil servants and increased unemployment, and to solve the problem, he expelled thousands of migrants. He also withdrew food subsidy and re-introduced fees, which caused students’ protests. By October 1984, Buhari declared that the government was broke. By then, his economic policies had achieved very little success. The economy suffered, while the national debt rose from $14 billion to $18 billion in less than two years.
With the austerity measures in place, Nigerians had to queue for essential commodities (popularly called essenco), such as bread and milk. Raw materials and spare parts needed to keep factories running were scarce. Inflation rose to 40 percent.
He also changed the colour of the naira and gave a limit beyond which nobody can change into the new currency.
When he seized power, one dollar exchanged for N0.724 but by the time he was overthrown, one dollar exchanged for N0.894. There was pressure on him by the International Monetary Fund to devalue the naira, and in 1984, he resisted devaluation. As a result, foreign currency reduced and his response was to ration it, and cut imports by half. By this time, his support had slowly begun to decline.

Prior to the 2015 elections, one of the cardinal points on which President Buhari hinged his campaign was to stamp out corruption. His past credentials in fighting corruption were his selling point. After his victory at the polls, he informed Nigerians that he was going to concentrate on probing his immediate predecessor, Goodluck Jonathan.
Though he has been accused of being selective, his anti-corruption war began in full swing after he won the elections, as the Economic and Financial Crimes Commission (EFCC) has arraigned top politicians accused of corruption, and monies have reportedly been recovered.
Like his efforts in dealing with the Maitasine sect, President Buhari’s administration has, to a large extent, curtailed the activities of the Boko Haram terrorist group in some parts of the North.
A constitutional lawyer, poet and columnist, Abdul Mahmud says Buhari has scored high in terms of security. He told The Sun in an interview: “I score him highly on security. Boko Haram insurgents are no longer exploding bombs in our city centers. They have been chased into Sambisa forest. But, the old and new problems of kidnapping and herdsmen need to be addressed the same way he’s addressing the Boko Haram menace.”
In the area of handling the economy, there seems to be a repeat of the past. Like he did in 1984, Buhari firmly resisted the devaluation of the naira, and financial analysts theorised that based on the campaign he ran, which made people see him as one who would put Nigerian interests ahead of foreign ones, he stoutly refused devaluation.
Before May 29, 2015, the naira was officially pegged at 197-199 per dollar, but was purchased at over N220 per dollar at the parallel market. In a bid to save the currency from a free fall, the government introduced a policy that limited the availability of forex to the public. In addition, 41 import items were banned from getting access to forex. Even though the CBN has officially floated the naira to about N290 to a dollar, the economic uncertainties that have persisted, have prevented an influx of foreign investors, which in turn has affected all aspects of the economy.  According to the National Bureau of Statistics, this development has caused the loss of jobs of thousands of Nigerians. In a recent report it released on its website, it said that 1.53 million economically active persons joined the labour force between January 1 and March 31, 2016.
Despite inheriting over $30 billion in foreign reserves by the Jonathan administration, $2.5 billion in the Sovereign Wealth Fund, $1.4 billion in the Excess Crude Account, and $4.65 billion in back taxes from NLNG, the Minister for Finance, Kemi Adeosun, recently said the country was ‘technically’ in a recession. While answering questions when she appeared before the Senate recently, she admitted that the country was in a recession, but tried to allay fears, saying even though things are tough, there should be no panic.
She said: “We should not be worried about the IMF projections, but we should be confident about what we are doing. Technically, Nigeria is in recession, but we should not go into definition, but what are we doing?”
The CBN governor, Godwin Emefelie, reinforced her assertion during a closed door meeting at the Senate, where he was reported to have said the country was experiencing economic stagflation and inflation at the same time.
According to, economic recession is a period of general economic decline and is typically accompanied by a drop in the stock market, an increase in unemployment, and a decline in the housing market. The blame of a recession generally falls on the federal leadership, often, either the president himself or the entire administration.
Economic stagflation refers to a period of little growth in an economy, rising prices, unemployment and inflation. In its forecast on Nigeria, the International Monetary Fund, which released its latest World Economic outlook on its site, said Nigeria’s growth projection for this year has spiraled downwards. It also says that the country’s growth would be 1.1 percent next year.
Key pointers to an economy that is in recession are; GDP decline, decline in income and profits reported by businesses, decline in economic activity spread across the economy, decline in income and profits reported by businesses, job losses, inflation rate rises, companies go bankrupt. A recession is a sign that things have gone bad in an economy.
A GDP is the market value of all goods and services produced within a country in a given period of time. Nigeria’s’ GDP growth contracted to -0.36 per cent in the first quarter of 2016, compared to 2.11 in the fourth quarter of 2015, and 3.86 percent in the first quarter of 2015.
The National Bureau of Statistics recently released reports which show that the country’s Consumer Price Index, the instrument for measuring inflation, rose to 16.5 percent (an 11-year high) in June, compared to 15.6 percent in May. The International Monetary Fund (IMF) recently said that Nigeria’s economy was projected to contract in 2016. It cut the country’s GDP growth forecast from 2.3 percent in April, to 1.8 percent, the lowest in 29 years. The economic downturn, occasioned by the fall of oil prices have caused a sharp increase in the price of essential commodities, while many small and medium scale businesses are struggling to stay afloat.
In the aspect of economic policies, a former Minister for Education, Oby Ezekwesili, says that Buhari was repeating the same mistakes he made in 1984.  “Buhari’s economic policies are archaic and opaque, reminiscent of his first coming in the 80’s. During that era, inflation spiraled, jobs were lost. During that era, the economic growth level dipped. That era wasn’t the best of eras in economic progress. What did not work in 1984 cannot possibly be a solution in a global economy that is much more integrated. We have lost the single digit inflation status we used to maintain in the past administration, ” she said.
A professor of political economy and management, Prof. Pat Utomi also gave a damning verdict on the President’s policies. “The problem with Buhari’s administration is his medieval mindset. He excludes rather than includes. So, he does not get the best idea. He is insular. Because of their medieval mindset, they have created a country that is more divided than they met it,” he said.
The economic downturn has affected the president’s approval ratings. According to a reputable survey agency, NOIpolls, President Buhari’s approval ratings across five geopolitical zones for the month of June 2016 had dropped by nine percent against his May 2016 ratings which stood at 48 percent. In October, 2015, his approval ratings were 80 percent. The poll was conducted on June 27, 2016, and the agency revealed that it randomly selected 1000 Nigerians spread across the six geo-political zones and above the age of 18. The key indicators used in the survey were his performance in the areas of education; where he scored 18 percent, in conflict resolution, he scored 28 percent, in agriculture and food security, he scored 21 percent, in infrastructure, he scored 45 percent in the area of fight against corruption, 48 percent in the area of national security, he scored 13 percent, in job creation, he scored 13 percent, and in poverty alleviation, he scored 11 percent.
In the survey, he recorded a 61 percent approval rating in the North West zone, and 59 percent approval rating in the North East zone. In the South South, his approval rating was 24 percent, and in the South east, eight percent.

What is the way out of the economic recession?
Cardinal Anthony Okogie suggests a political solution. In an open letter he wrote to President Buhari, he advised that  the present administration needs to close ranks by reaching out to experienced professionals in the opposition parties who can proffer immediate solutions.
He said: “The entire political class needs to come together, irrespective of party differences, to acknowledge its collective guilt and to seek ways of saving the sinking ship that our country has become. This cannot be done if some officials of your administration demonize and alienate members of the opposition. If a large portion of the blame for the present situation is to be laid on the doorsteps of the entire political class, the search for a solution must involve everyone. That is why no one should be alienated. All hands must be on deck. This is the time to revitalize moribund industries, reinvigorate our agriculture, make our country tourist and investor friendly, and enable our young men and women to find fulfillment by contributing to the common good.”
The President of the Manufacturers Association of Nigeria (MAN), Frank Jacobs, said emphasis should be laid on the need to fund the productive sectors of the economy adequately so that the tempo of industrialisation attained by the country can be sustained, as well as save the sector from the current economic tsunami. He said: “ export of manufactured products and, indeed, other finished products should be encouraged in order to make up for  the deficit we are currently witnessing in the forex market while exporters should be encouraged to repatriate accrued funds home. The government should also explore other avenues of foreign exchange inflow outside oil sales by giving incentives to exporters and introducing ‘counterpurchase strategies’ used in the not too distant past by countries like Malaysia, Singapore, Brazil among others which included conditionalities for forex generation before being given certain size of dollar-denominated contracts  like defence or power.”   The Sun

Leave a Reply