Buhari vs. Jonathan: Beyond the elections

The two main parties talk around the major development challenges-corruption, insecurity, economy (unemployment/poverty, power, infrastructure, etc) health, education, etc. However, it is my considered view that neither of them has any credible agenda to deal with the issues, especially within the context of the evolving global economy and Nigeria’s broken public finance.    They are not […]

The two main parties talk around the major development challenges-corruption, insecurity, economy (unemployment/poverty, power, infrastructure, etc) health, education, etc. However, it is my considered view that neither of them has any credible agenda to deal with the issues, especially within the context of the evolving global economy and Nigeria’s broken public finance.    They are not telling us how much each of their promises will cost and where they will get the money. Neither talks about the broken or near bankrupt public finance and the strategy to fix it.
In response to the question of where the money will come from, I heard one of the politicians say that the problem of Nigeria was not money but the management of resources. This is half-truth. The problem is both.  Even with all the loopholes and waste closed, with increased efficiency per dollar spent, there is still a binding budget constraint.  Did I hear that APC promises a welfare system that will pay between N5,000 and N10,000 per month to the poorest 25 million Nigerians?  Just this programme alone will cost between N1.5 and N3 trillion per annum. Add to this the cost of free primary education plus free meal (to be funded by the federal budget or would it force non-APC state governments to implement the same?), plus some millions of public housing, etc.  
I have tried to cost some of the promises by both the APC and the PDP, given alternative scenarios for public finance and the numbers don’t add up.   The quality of political debate and discourse seems to border on the pedestrian. From the quality of its team, I did not expect much from the current government, but I must confess that I expected APC as a party aspiring to take over from PDP to come up with a knockout punch. Evidently, from what we have read from the various versions of its manifesto as well as the depth of promises being made, it does not seem that it has a better offer.
Recall that the key word of the 2015 budget is ‘austerity’.  Austerity? This is just within a few months of the fall in oil prices. History repeats itself in a very cruel way, as this was exactly what happened under the Shehu Shagari administration.   The austerity measures included the rationing of ‘essential commodities’ and most states owed salary arrears. Corruption was said to be pervasive, and as Sani Abacha said in that famous coup speech, ‘unemployment has reached unacceptable proportions and our hospitals have become mere consulting clinics’.  General Muhammadu Buhari/Tunde Idiagbon regime made the fight against corruption and restoration of discipline the cardinal point of their administration which lasted for 20 months. We have come full circle.   The parallels with the Shagari regime are troubling. At the time of oil boom, Nigeria again went on a consumption spree such that the budgets of the last five years can best be described as ‘consumption budgets’, with new borrowing by the federal government exceeding the actual expenditure on critical infrastructure. Not one penny was added to the stock of foreign reserves at a period Nigeria earned hundreds of billions from oil. For comparisons, President Obasanjo met about $5 billion in foreign reserves, and the average monthly oil price for the 72 months he was in office was $38, and yet he left $43 billion in foreign reserves after paying $12 billion to write-off Nigeria’s external debt. In the last five years, the average monthly oil price has been over $100, and the quantity also higher but our foreign reserves have been declining and exchange rate depreciating.
The rate of public debt accumulation at a time of unprecedented boom had no parallel in the world.  While the Obasanjo administration bought and enlarged the policy space for Nigeria, the current government has sold and constricted it.  What debt relief did for Nigeria was to liberate Nigerian policymakers from the intrusive conditionalities of the creditors and thereby truly allowing Nigeria independence in its public policy. How have we used the independence?  Through our own choices, we have yet again tied the hands of future policymakers.  In sum, the mismanagement of our economy has brought us once more to the brink.  
Poverty incidence and unemployment are also simultaneously at all-time high levels. According to the NBS, poverty incidence grew to 69% in 2010 and projected to be 71% in 2011, with unemployment at 24%.  This is the worst record in Nigeria’s history, and the paradox is that this happened during the unprecedented oil boom.
One theme I picked up listening to the campaign rallies is the confusion about measuring government “performance”. Most people seem to confuse ‘inputs’, or ‘processes’ with output.  In truth, the President has ‘outperformed’ his predecessors except that it is in reverse order.   
The growth rate of the agricultural sector in the last five years still remains far below the performance under Obasanjo. No other president had presided over the slaughter of about 15,000 people by insurgents in a peacetime; no other president earned up to 50% of the amount of resources the current government earned from oil and yet with very little outcomes; no other president had the rate of borrowing; none had significant forex earnings and yet did not add one penny to foreign reserves but losing international reserves at a time of boom; no other president had a depreciating exchange rate at a time of export boom; at no time in Nigeria’s history has poverty reached 71% (even under Abacha, it was 67 -70%); and under no other president did unemployment reach 24%. Surely, these are unprecedented records and he surely ‘outperformed’ his predecessors!  What a satire!
 My advice to President Jonathan and his handlers is to stop wasting their time trying to campaign on his job record. Those who have decided to vote for him will not do so because he has taken Nigeria to the moon. His record on the economy is a clear ‘F’ grade.  
Despite presiding over the biggest oil boom in our history, it has not added one percentage point to the growth rate of GDP compared to the Obasanjo regime especially the 2003- 07 period.    The president promised Nigeria nothing in the last election and we did not get value for money. He should this time around present us with his plan for the future, and focus on how he would redeem himself in the second term-if he wins!
Sadly the government’s economic team is very weak, dominated by self-interested and self-conflicted group of traders and businessmen, and so-called economic team meetings have been nothing but showbiz time. The very people government exists to regulate have seized the levers of government as policymakers and most government institutions have largely been “privatized” to them.
  So far, neither the APC nor the PDP has a credible programme for employment and poverty reduction. The APC promises to create 20,000 jobs per state in the first year, totalling a mere 720,000 jobs.  This sounds like a quota system and for a country where the new entrants into the labour market per annum exceed two million.  If it was intended as a joke, APC must please get serious.  On the other hand, President Jonathan targets two million jobs per annum but his strategy for doing so is a Job Board— another committee of sort.  Sorry, Mr. President, a Job Board is not a strategy. The principal job Nigerians hired you to do for them is to create jobs for them too. You cannot outsource that job, Sir.  Creating 3 million jobs per annum under the unfolding crisis would task our creativity and audacity to the limits.
 Surprisingly, none of the parties/candidates has any grand vision about African economic integration, led by Nigeria. There is no programme on how to make the naira the de facto currency of ECOWAS or the international financial centre that can attract more than $100 billion per annum. Where is the strategy for orchestrating the revolutionary finance to power the economy during this downturn? For President Jonathan, I find it shocking that the most important initiative of his government to secure the future of the economy by Nigeria refusing to sign the ruinous Economic Partnership Agreement (EPA) with the European Union is not even being mentioned.   Or does the government not understand the import of that?  It will be interesting to know the APC’s strategy for exploiting strategic alliances within Africa, China, and the world for Nigeria’s prosperity.

Excerpted from a submission by Professor Soludo, a former Governor of Central Bank of Nigeria.