₦airaland Forum

Tomoarika:
Let me digress a bit to refresh our memory on where we are, and thus provide the context in which to evaluate the promises being made to us. 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. Under the Shagari government, oil price reached its highest in 1980/81.
During the same period, Nigeria ratcheted up its
consumption and all tiers of government were in
competition as to which would out-borrow the other.
Huge public debt was the consequence. When oil
prices crashed in early 1982, the National Assembly
then passed the Economic Stabilization (Austerity
Measures) Act in one day— going through the first,
second, and third readings the same day. 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. I am not sure they had a credible plan to get the economy out of the doldrums (although it must be admitted that poverty incidence in Nigeria as of 1985 when they left office was a just46%— according to the Federal Office of Statistics).
We have come full circle. If the experience under
Shagari could be excused as an unexpected shock,
what Nigeria is going through now is a consequence
of our deliberate wrong choices. We have always
known that the unprecedented oil boom (in both
price and quantity—despite oil theft) of the last six
years is temporary but the government chose to
treat it as a permanent shock.

The parallels with the Shagari regime are troubling. First, 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.

Second, 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.
I note that when I assumed office as Governor of CBN, the stock of foreign reserves was $10 billion.
The average monthly oil price during my 60 months
in office was $59, but foreign reserve reached the all- time peak of $62 billion (and despite paying $12 billion for external debt, and losing over $15 billion during the unprecedented global financial and economic crisis) I left behind $45 billion. Recall also that our exchange rate continuously appreciated during this period and was at N117 to the dollar before the global crisis and we deliberately allowed it to depreciate in order to preserve our reserves. My calculation is that if the economy was better managed, our foreign reserves should have been between $102 –$118 billion and exchange rate around N112 before the fall in oil prices. As of now, the reserves should be around $90 billion and exchange rate no higher than N125 per dollar.

Third, 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 Nigeria 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.
This time, the debt is not necessarily to foreign
creditor institutions/governments which are organized under the Paris club but largely to private
agents which is even more volatile. We call it
domestic debt. But if one carefully unpacks the bond portfolio, what percentage of it is held by foreign private agents? And I understand the Government had removed the speed bumps we kept to slow the speed of capital flight, and someone is sweating to explain the gyrations in foreign reserves. I am just smiling!

In sum, the mismanagement of our economy has
brought us once more to the brink. Government
officials rely on the artificial construct of debt to GDP ratio to tell us we can borrow as much as we want.
That is nonsense, especially for an economy with a mono but highly volatile source of revenue and forex earnings. The chicken will soon come home to roost.
Today, the combined domestic and external debt of
the Federal Government is in excess of $40 billion.
Add to this the fact that abandoned capital projects
littered all over the country amount to over $50
billion. No word yet on other huge contingent
liabilities. If oil prices continue to fall, I bet that
Nigeria will soon have a heavy debt burden even with low debt to GDP ratio. Furthermore, given the current and capital account regime, it is evident that Nigeria does not have enough foreign reserves to adequately cover for imports plus short term liabilities. In essence, we are approaching the classic of what the Shagari government faced, and no wonder the hasty introduction of ‘austerity measures’ again.

Fourth, 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 as well as to some of the propagandists is the
confusion about measuring government
“performance”. Most people seem to confuse
‘inputs’, or ‘processes’ with output. Earlier this
month, I had a dinner with a group of friends (14 of
us) and we were chit-chatting about Nigeria. One of
us, an associate of President Jonathan veered off to
repeat a propaganda mantra that Jonathan had
outperformed his predecessors. He also reminded us that Jonathan re-based the GDP and that Nigeria is now the biggest economy in Africa; etc. It was fun listening to the response by others. In sum, the
group agreed that the President had ‘outperformed’
his predecessors except that it is in reverse order.

First, my friend was educated that re-basing the GDP is no achievement: it is a routine statistical exercise, and depending on the base year that you choose, you get a different GDP figure. Re-basing the GDP has nothing to do with government policy. Besides, as naira-dollar exchange rate continues to depreciate, the GDP in current dollars will also shrink considerably soon.
We were reminded of Jonathan’s agricultural
‘revolution’. But someone cut in and noted that for all the propaganda, the growth rate of the agricultural sector in the last five years still remains far below the performance under Obasanjo. One of us reminded him that 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!

One of those present took the satire to some level by comparing Jonathan to the ‘performance’ of the
former Governor of Anambra, Peter Obi. He noted
that while Obi gloated about ‘savings’, there is no
signature project to remember his regime except
that his regime took the first position among all
states in Nigeria in the democratization of poverty—-mass impoverishment of the people of Anambra.
According to the National Bureau of Statistics,
poverty rose under his watch in Anambra from 20%
in 2004 (lowest in Nigeria then) to 68% in 2010 (a
238% deterioration!). Our friend likened it to a father who had no idea of what to do with his resources and was celebrating his fat bank account while his children were dying of kwashiorkor. He pointed out that since it is the likes of Peter Obi who are the advisers to Jonathan on how to manage the economy (thereby confusing micromanagement which you do as a trader with macro governance) it is little wonder that poverty is fast becoming another name for Nigeria. It was a very hilarious evening.

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. As one reviews the laundry list of micro interventions the government calls its achievements, one wonders whether such list is all that the government could deliver with an unprecedented oil boom and an unprecedented public debt accumulation. I can clearly see why reasonable people are worried.

Everywhere else in the world, government
performance on the economy is measured by some
outcome variables such as: income (GDP growth
rate), stability of prices (inflation and exchange rate), unemployment rate, poverty rate, etc. On all these scores, this government has performed worse than its immediate predecessor— Obasanjo regime.
If we appropriately adjust for oil income and debt, then this government is the worst in our history on the economy. All statistics are from the National Bureau of Statistics.
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. Obasanjo met GDP growth rate at 2% but averaged 7% within 2003- 07.
The current government has been stuck at 6%
despite an unprecedented oil boom. Income (GDP)
growth has actually performed worse, and poverty
escalated. This is the only government in our history where rapidly increasing government expenditure was associated with increasing poverty. The director general of NBS stated in his written press conference address in 2011 that about 112 million Nigerians were living in poverty. Is this the record to defend?
Obama had a tough time in his re-election in 2012
because unemployment reached 8%. Here,
unemployment is at a record 24% and poverty at an
all-time 71% but people are prancing around,
gloating about ‘performance’. As I write, the Naira
exchange rate to the dollar is $210 at the parallel
market. What a historic performance! Please save
your breathe and save us the embarrassment. 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. Mention any major
government department or agency and someone will tell you whom it has been ‘allocated’ to, and the
person subsequently nominates his minion to occupy the seat. What do you then expect? The economy seems to be on auto pilot, with confusion as to who is in charge, and government largely as a constraint.
There are no big ideas, and it is difficult to see where economic policy is headed to. My thesis is that the Nigerian economy, if properly managed, should have been growing at an annual rate of about 12% given the oil boom, and poverty and unemployment should have fallen dramatically over the last five years. This is topic for another day.

Promhize:
This is revealing.

I'm so sure that if any of the candidates are asked questions pertaining to this issues in a debate, they would fail woefully.

How do we end up having people like this leading us.

Chigold101:
Soluda has once again proven that he is a weak man. A man i so much loved but his unforgiven spirit is second to none.

Soludo is writing like this against GEJ because GEJ is the reason why he lost Anambra election in 2010(I worked as member of his campaign team).

In 2013 he joined APGA and was talked about how to continue with Obi‘s good work as governor of Anambra state but Obi who already had Obiano in mind used style to push Soludo aside...

He joined Atiku‘s camp in 2011 thinking that GEJ will lose at the PDP primaries, but their camp was disgraced. Now he has come here to cause confusion in the polity because all he wants is to see GEJ disgraced, but it will not work for him in Jesus name.

This is how his unforgiven spirit made him to make sure that Dora Akunyiri (his wife‘s aunty. Dora is the younger sister to the wife‘s mother) never win Anambra central senatoral sit. He took it upon himself to make sure that Ngige is decleard the winner even when there was a little confusion in few constituencie. All because Dora through GEJ & Abuja PDP helped Peter Obi defeat him in 2010.

As an insider who knows the fight going on between Soludo, GEJ & Obi am not suprised at all with the this piece. It has some elements of truth but it is coated with many sweet lies.

He took sabatical after Peter Obi messed him up in 2013 prior to Anambra state guber election. Which sabatical? He went in to leak his wounds...

He thinks he has seen where to nail GEJ.

Chigold101:
Soluda has once again proven that he is a weak man. A man i so much loved but his unforgiven spirit is second to none.

Soludo is writing like this against GEJ because GEJ is the reason why he lost Anambra election in 2010(I worked as member of his campaign team).

In 2013 he joined APGA and was talked about how to continue with Obi‘s good work as governor of Anambra state but Obi who already had Obiano in mind used style to push Soludo aside...

He joined Atiku‘s camp in 2011 thinking that GEJ will lose at the PDP primaries, but their camp was disgraced. Now he has come here to cause confusion in the polity because all he wants is to see GEJ disgraced, but it will not work for him in Jesus name.

This is how his unforgiven spirit made him to make sure that Dora Akunyiri (his wife‘s aunty. Dora is the younger sister to the wife‘s mother) never win Anambra central senatoral sit. He took it upon himself to make sure that Ngige is decleard the winner even when there was a little confusion in few constituencie. All because Dora through GEJ & Abuja PDP helped Peter Obi defeat him in 2010.

As an insider who knows the fight going on between Soludo, GEJ & Obi am not suprised at all with the this piece. It has some elements of truth but it is coated with many sweet lies.

He took sabatical after Peter Obi messed him up in 2013 prior to Anambra state guber election. Which sabatical? He went in to leak his wounds...

He thinks he has seen where to nail GEJ.

You can get angry or accept it.

A plan without the dollar or Naira signs to it is nothing but a wish-list. They are not telling us how much each of their promises will cost and where they will get the money. None talks about the broken or near bankrupt public finance and the strategy to fix it.

I remember that Chief Obafemi Awolowo was asked similar questions in 1978 and 1979 about his promises of free education and free medical services. Even as a teenager, I was impressed by how he reeled out figures about the amounts he would save from various ‘waste’ including the tea/coffee served in government offices. The point is that at least he did his homework and had his numbers and I give credit to his team.

berrystunn:
TAAH GO SLEEP

idrisbello:
*******It hurts them you ended their subsidy fraud******** **You sold off NEPA and ended their fraudulent NEPA contracts. **You removed ghost workers from civil service and reduce their wealth. **You refused to renew their oil blocks license they shared among themselves. **You handed NPA verification to a third party and eliminated port frauds. **It hurts them you stopped the bootlegging in fertilizer distribution. **You hurt them by making sure they don't hoard petroleum product and Nigerians will sleep at filling stations while they make astronomical profits. **You pinched them where it hurts most by making sure elections are free and fair & they can't impose their candidates on us. **You hurt the cabal by looking into their face and telling them no sir. **We know Tinubu, Amaechi, Rochas & co. don't love Nigeria more than us.***you restored rail system that gulp billlions of naira yearly, it hurts them *** You have made Nigeria proud with cars now produced in Nigeria up to 70% local content. Many car merchant and corruption in auto mobile industry stopped **We know GMB is a man of integrity and strict to what he believes. But we also know those pushing him have a hidden agenda. They have bullied you, lie against you, insulted you and make Nigeria insecure just to get back to business as usual. But I promise you sir, they will not bully our votes, we will go to the poll blindfolded for you. For their peace will be too costly!
If you love Nigeria please repost to all your contacts!

CCsurplus007:
Now this is what I have been telling my friends, tell us what you want to do and how you intend doing it not some public charade of lies and deception. When we have thousands of intellectuals to choose from, I wonder what we should still be doing with someone still arguing about his secondary school certificate. May God deliver Nigeria

But prof, someone reading this piece would imagine we were living in El-Dorado during obj's tenure. One would have assumed OBJ was pope john paul or the messiah.why was the railway not working during your tenure? despite the huge sums injected into the power sector yet phcn failed. Why wasnt any of our university among the best 200 then? rather Obj built personal libraries and universities to his name. All federal Government projects in the east was stopped or frustrated.what of the monopolistic approach of Obj when only Dangote was allowed to import anything and frustrated other peoples businesses that were opposed to him.since the agricultural sector was better during obj's tenure why dint it add to our foreign reserves and massive corruption in that sector was still rife. what about the haliburton and other numerous scandals. Soludo did not tell us that increasing workers salary then affected our recurrent expenditure now.

The thing is anybody can come and reel out figures as if it paradise during thier own era. This is a nice presentation but not without some personal bias I still think both parties can learn a lot from this if they objectively look at the salient points raised.

CCsurplus007:
Now this is what I have been telling my friends, tell us what you want to do and how you intend doing it not some public charade of lies and deception. When we have thousands of intellectuals to choose from, I wonder what we should still be doing with someone still arguing about his secondary school certificate. May God deliver Nigeria

But prof, someone reading this piece would imagine we were living in El-Dorado during obj's tenure. One would have assumed OBJ was pope john paul or the messiah.why was the railway not working during your tenure? despite the huge sums injected into the power sector yet phcn failed. Why wasnt any of our university among the best 200 then? rather Obj built personal libraries and universities to his name. All federal Government projects in the east was stopped or frustrated.what of the monopolistic approach of Obj when only Dangote was allowed to import anything and frustrated other peoples businesses that were opposed to him.since the agricultural sector was better during obj's tenure why dint it add to our foreign reserves and massive corruption in that sector was still rife. what about the haliburton and other numerous scandals. Soludo did not tell us that increasing workers salary then affected our recurrent expenditure now.

The thing is anybody can come and reel out figures as if it paradise during thier own era. This is a nice presentation but not without some personal bias I still think both parties can learn a lot from this if they objectively look at the salient points raised.

sincerenigerian:
How I wish Nigerians can read this piece from top to bottom. This piece should be an eye opener for all of us.

Good piece from Prof. Soludo.

noblezone:
It pains me, Soludo was schemed out of the Anambra Guber race.
Any way, tomorrow is yet another day.

And I still calling on all Biafrans to come home, let us build our great nation.
The likes of Soludo are not needed or wanted in Nigeria.
In Biafra, people like him will become rallying point for national growth!

If he insists on bringing this level of scrutiny in Nigeria, they will simply kill him!
Nigeria is irredeemable.

idrisbello:
*******It hurts them you ended their subsidy fraud******** **You sold off NEPA and ended their fraudulent NEPA contracts. **You removed ghost workers from civil service and reduce their wealth. **You refused to renew their oil blocks license they shared among themselves. **You handed NPA verification to a third party and eliminated port frauds. **It hurts them you stopped the bootlegging in fertilizer distribution. **You hurt them by making sure they don't hoard petroleum product and Nigerians will sleep at filling stations while they make astronomical profits. **You pinched them where it hurts most by making sure elections are free and fair & they can't impose their candidates on us. **You hurt the cabal by looking into their face and telling them no sir. **We know Tinubu, Amaechi, Rochas & co. don't love Nigeria more than us.***you restored rail system that gulp billlions of naira yearly, it hurts them *** You have made Nigeria proud with cars now produced in Nigeria up to 70% local content. Many car merchant and corruption in auto mobile industry stopped **We know GMB is a man of integrity and strict to what he believes. But we also know those pushing him have a hidden agenda. They have bullied you, lie against you, insulted you and make Nigeria insecure just to get back to business as usual. But I promise you sir, they will not bully our votes, we will go to the poll blindfolded for you. For their peace will be too costly!
If you love Nigeria please repost to all your contacts!

damola1:
Soludo, you are right for most of what you wrote. But still you are a learner when it comes to politics.

Did awolowo you spoke about, with such figures win the election? NO.

Politics is not played with intelligent figures, this is just the fact, thats why you can't win an election. How many of the voters are as figure smart as you? so what's the use of speaking big grammar to someone like you, who will not even go and vote anyway, when I can use bag of rice to convince 1Million other people? Politics is played by understanding people, their desires, and how to play on their desires. Thats why, GMB is in the race. Cos. A. he's a muslim. and a core northerner. B. Because he can work with people like the SW.

I look at what Lagos as achieved (As it affects my life, This morning, I rode a bicylce to my office, 15mins Ride, with good roads, few pot holes, and I feel refreshed), and I compare with what you've wrote, and I tell you. We've a better chance standing behind the infrastructure of APC. Like you rightly noted, we need a sharp leader now, especially now that we are broke, and GEJ hasn't shown any of such characteristics even with so much money made. If GEJ wins this election, Nigeria is doomed!... he's a good guy, but he's not just the man for the job. He's too much of a politician than a technocrat, We need sharp guys, with sharp teams , who will hit the bulls eye in govt.