That the Nigerian economy has been in recession since last year is no longer news. In 2016, overall economic output regressed by a factor of -1.8 per cent, the worst since the height of our tragic civil war in 1968. External reserves dwindled to a dangerous $27 billion while exchange rate nosedived to N493 to the US dollar on the BDC market. Public debt has risen to an unprecedented high of 5 per cent of GDP even as inflation rose to a high of 18.9 per cent.
Manufacturers have been groaning under the weight of scarce foreign exchange, which has compounded the problem of capacity under-utilization. Layoffs have been going on quietly in the industrial sector as well as in banking and finance. There is a growing threat of hunger as food output is declining in the face of farmers-herders conflict in the Middle Belt, which is unarguably the bread basket of Nigeria. Across all tiers of government, public finances are in dire straits, as workers and pensioners are owed backlogs of payments going back months, if not years.
Public debt currently stands at US$36 billion, precisely the same amount we had when the Obasanjo administration in 2005 decided to negotiate a settlement with the Paris Club. Our only saving grace in the current situation is that the bulk of national debt is denominated in Naira. But with a debt-service ratio of 66 per cent, we have reached the maximum threshold on our debt sustainability levels.
The incidence of poverty is reaching harrowing proportions. Unemployment is bordering on crisis proportions, with incidences of youth unemployment as high as 70 per cent in the poorest regions of the North-East and North-West. The state of the nation is best described by the term anomie; a term crafted by the 19th century French sociologist, Emil Durkheim. Rural banditry is on the increase, in addition to armed criminality and a looming nightmare of random, nihilistic violence. There is social decay everywhere; and with it an all-pervading atmosphere of emptiness and gloom. Meanwhile, the political class continues to bicker over the spoils of public office, with a fractious, ruling party on one hand, and a chimpanzee-dominated opposition on the other.
At no time has our nation ever been brought to such humiliation as it is today. Matters have not been helped by the health status of our President. The ultimate tragedy is that the President’s worst enemies are those he has trusted the most; the intrigues would have impressed the Medicis of medieval Florence.
It is universally acknowledged that this recession was not precipitated by the current administration. It derives from decades of poor policy choices, irresponsible leadership and an unsustainable political economy anchored on collecting petro-dollar rents from treacherous multinational oil companies. Added to it is the grim reality of grand corruption. According to the London-based Chatham House, the national treasury was losing US$1 billion monthly from oil theft, known locally as “oil bunkering.”
Towards the electoral cycle of 2015, there were rumours of opposition politicians amassing military arsenals in readiness for Armageddon in the event that they did not win the elections. Investors took cover by offloading Naira and stashing up dollars. The dollarization of the economy has become a nightmare that would not go away. The dollar became the currency of settlement in political horse-trading in smoke-filled chambers. Foreign investors took the cue and started selling up and squirelling their capital abroad. Local tycoons changed their savings into dollars and stashed them in domiciliary accounts while others sent theirs abroad. An estimated US$50 billion left our shores in what has become a fatal financial haemorrhage for our economy.
Whilst it is true that the APC-led administration inherited an economic crisis; the truth must be told — it went ahead to nail the coffin by its wanton acts of bungling incompetence. It took several months before a cabinet could be constituted, thereby losing a lot of valuable time. It also took even longer to develop an economic blueprint that would provide a strategic framework for frontally tackling the economic recession. The greed and myopia of the National Assembly has not helped matters. Imprisoned by a total absence of moral scruples, it woul not sign up the annual budget before its cut is guaranteed. Even as we write in this rainy month of April, the 2017 budget is yet to be finalised; even as the gaunt, haunting eyes of children stricken by cerebrospinal meningitis stare at us, begging for mercy and reprieve from a sentence of human-induced death, the politicians continue their games of blackmail and gross rent-seeking.
We were delighted when a couple of weeks ago President Muhammadu Buhari launched the national Economic Recovery and Growth Plan (ERGP). I congratulate the administration for this initiative. I’m aware that most of the technical work was done by the Minister of National Planning in collaboration with his Minister of State, Ms. Zainab Ahmad and the Director-General of Budget, Ben Akabueze. These gentlemen and gentlewoman have worked very hard to hammer out this new economic blueprint that, if rigorously implemented, can turn around the fortunes of our economy. The priorities of the new plan – power and infrastructure, food security, good governance, employment, human development and industrialization are unassailable. The plan also makes it clear that a sound macro-economic environment and an efficient public sector are critical to long-term recovery and growth. I could not agree more.
Where I have reservations relates to the nitty-gritty of implementation. The big elephant in the room is the public service, with Byzantinism, venality and sloth. No matter how visionary your economic plan as a statesman or practical economist, you would have to rely on civil servants to implement it. The ERGP can only succeed if the right vehicle is structured for its rigorous implementation.