Minabere Ibelema


Our tough-talking President Muhammadu Buhari is apparently feeling helpless about Nigeria’s worsening economy. He is telling anyone who would listen that Nigeria is broke. In other words, we should not expect much from his government.

Meanwhile, Nigerians are still hopeful— even expectant —of the Buhari dividend. And critics are already flailing away about his non-performance.

The Peoples Democratic Party chieftains and other party faithful are virtually taunting the retired general to deliver on his promises. They have charged that he is talking down the economy with his apocalyptic statements about the economy, which scare away prospective foreign investors.



Even non-partisan critics are coming down hard. A headline in the Washington Times last Monday read, “Nigerians disenchanted as new president ‘too slow’ to deliver on lofty campaign promises.” And a headline in The Punch declared that body language is no longer enough. It was an allusion to the fleeting improvements in electricity supplies and some other services that were attributed to the Buhari aura.

But let’s face it, it is Buhari’s bad luck to assume office at this time. It would take a miracle to reverse Nigerians’ plight any time soon. Sure Buhari didn’t do Nigeria any favours by lingering over the formation of a government even as the economy worsened.

Still, if he seems helpless, it is because the forces dragging down the economy are beyond him.

So, should Nigerians just sit back and expect nothing from a president they elected with much fanfare and hopefulness. Definitely not. It is still necessary to put the fire on the administration’s feet. After all, Buhari was aware of the worsening economy when he was making lofty campaign promises.

However, more than ever before, Nigerians will find relevance in these words of American moral philosopher Reinhold Niebuhr: “God grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.” Sure, a philosophical view is not a substitute for food on the table, nor does it ease hunger pangs. But it should put things in perspective and allay misguided expectations.

Here’s the reality. Last year June, Nigeria’s economic mainstay, crude oil, was selling at about $105 per barrel. Today, it is selling at about $48. This is a reduction of more than 50 per cent. To put this in perspective, imagine that your income is cut in half. It means suddenly having to afford less than half of your routine expenses: food, supplies, rent, mortgage, etc. That’s essentially Nigeria’s situation.

And though no one has a grasp on when the prices will stabilise and begin to rebound, the most optimistic projection is the ending of 2016. The only thing that may bring about a quick boost in oil prices would be a decision by the Organisation of Oil Exporting Countries to sharply reduce production. And even that would require compliance by OPEC members and the solidarity of non-OPEC members. From all indications, none of this is likely.

Hopeful Future

Still, there is long-term hope for countries such as Nigeria and Venezuela which are experiencing severe financial crunch because of the fallen oil prices. For one thing, the current glut may result in skyrocketing prices down the road. The Saudi vice minister of oil, Prince Abdulaziz bin Salman, told a meeting of Asian energy ministers recently that up to $200 billion of investment in the oil exploration was cancelled this year and as much as five more per cent more will be cancelled next year.

“The potential impact of current cuts in expenditure on future oil supplies is both substantial and long-lasting,” the French News Agency quotes Abdulaziz, as saying. “A prolonged period of low oil prices is unsustainable as it will induce large investment cuts and reduce the resilience of the oil industry, undermining the future security of supply and setting the scene for another sharp price rise.”

Another hopeful sign for the industry is the prospect that several non-OPEC members will decide to join OPEC, boosting the cartel’s leverage on oil prices. If nothing else, the price crisis is bringing OPEC and non-OPEC countries into greater dialogue. But cooperation on oil will be checkmated by political tensions among some major oil-producing countries, especially Saudi Arabia on one hand and Russia and Iran on the other.

Given this prospect, the best that Buhari can do is to try to ease Nigerians’ distress. And even in this regard, his options are limited.

When confronted with a similar situation of a rapidly deteriorating US economy in 2008, newly elected President Barack Obama adopted the strategy of infusing the economy with much capital. His administration bailed out financial institutions and auto companies that were teetering on bankruptcy. It invested in infrastructural improvements to provide job opportunities.

It boosted auto purchases through a “cash-for-clunkers” programme that offered owners of old cars cash-incentives to purchase new ones with the dual goal of stimulating auto sales while also reducing pollution. And it pursued a similar programme to forestall foreclosures on people’s homes and simultaneously rescue the mortgage industry.

Obama’s capital-infusing strategy was easy for him to do, relatively speaking, anyway. With the world’s most robust economy even at the worst of times and a currency that is universally attractive, the United States can borrow virtually infinitely. Nigeria can’t.

The closest thing to the Obama strategy so far in Buhari’s approach is the proposed programme that would pay the unemployed and the very poor N5,000 monthly. That is, of course, a tall order in a country where governments and businesses don’t regularly pay their employees.

In fact, with an already bloated bureaucracy, Buhari is necessarily adding to the unemployment problem by shrinking the federal workforce. The cut in the number of ministries, for example, will add to unemployment, though it didn’t go far enough to accomplish the goal of shrinking the bureaucracy.

Despite the downside, however, more of such shrinkage is necessary. The savings can go into productive expenditures and ensure that the existing workforce is properly remunerated and motivated to provide competent service.

These can contribute to making Nigeria more attractive to foreign capital, which should spur further industrialisation, which will reduce the dangerous dependence on one product.

With prudent policies by the government and forbearance and resourcefulness by the people, the Nigerian economy should emerge from this crisis much more robust and resilient than ever.

Bambless1:
I Concur!

basilo101:
Anybody expecting anything from Buhari will just have high BP. We from SE saw it comming, but others were more interested in ridding on his herd of al majiri's vote to put their mediocre local champions to national limelight.

dont8:
Still, if he seems helpless, it is because the forces (PDP-Wailers) dragging down the economy are beyond him.

baralatie:

PMB as the president of the biggest African economy cannot be helpless unless he chose to ignore the issues concerning the economy and security of its citizens because of "said chanters" around his office who have consistently being anti Nigerian in the quest for power and refused every Nigerian advancement achieved over the years!