₦airaland Forum

mekaboy:
My friend be open minded for once. He is neither writting for or against Gej, but for Nigeria.

If he cant comprehend, he had pointed out the mess we r in, how we got in it and then challenged the both parties to come up with the how to get out of it. Which till date none of the parties are able to.

manny4life:
I read every single word and I am truly honored to have read this piece. I supported Jonathan but of recent, I have been more cautious than ever. The truth is our economy really needs help, unfortunately, Buhari isn't the man for the job either. Soludo rubbish both PDP and APC, man, he gave President Jonathan the bitter truth. Some may not like what he wrote, how he wrote and why he wrote it, but truth be told, Soludo asked pertinent questions. I liked where he hinted about the "Austerity" measures... How I wish this man could be my mentor, or yet work for him. He is endowed with wisdom.

MadCow1:
Last time I checked, the road that goes from Owerri to Upper Iweka was built by Obasanjo administration. To say he stopped all federal projects in the east would be a lie. And also remember that this train matter was started by Obasanjo regime. The unbundling of NEPA was achieve under Obasanjo despite the difficulties he faced from the unions. The IPP's were mostly started under Obasanjo tenure as well with import waivers placed on power equipments. Or have you forgotten the News of how billions of power equipments imported into the country for power projects were found in the ports with some port officials indicted for having started to pilfer and sell some of them.

He didn't paint Obasanjo as a saint but highlighted many salient points that can be ignored with particular respect to our debt profile, exchange rate, employment statistics and foreign reserves all this weighed against the price of Nigeria's major source of foreign income which is OIL.

ACM10:
Chino what do you expect him to do? The opposition has not tasted power yet. So the only thing left for him is to analyse their campaign promises. GEJ is the one in power, so he must analyse his achievement. Did he tell lies?

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.

[b]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.[/b]

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.

MadCow1:
I did...

Some of the points in the article have always been obvious to me. Many Nigerians underestimate what lies ahead of us. Oil Prices are currently at 45 dollars per barrel with Nigeria having over 35 million barrel of unsold oil out there with nobody to sell to. Russia has flooded the Market with so much oil and the Saudis are doing same and both these nations have a shitload of oil to sell. The Americans who were our biggest customers seem to have become self sufficient and have started exploring ways to make their oil cheaper to produce. Even the Russian economy right now is in peril as a result of the current oil prices.

Job loss has already started with some companies like Shell laying off staff weekly. Total Nigeria is proposing a 20% salary cut or firing 20% of its staff strength. New oil well projects have been abandoned as they are no longer economically viable. Projects like the Samsung Heavy Industry and the Brass LNG projects that would have created over 100,000 jobs have been bugged down by corruption. The NNPC is also not helping as some of the meetings I have sat in on with them have left me wondering how brazen they have gotten in their shameless acts.

I for one don't support Jonathan for almost the same reasons as Soludo's driver.. But more importantly, I actually believe that Jonathan does not have the capacity to be any thing more than he currently is right now. He seems to be truly clueless as to what being the head of State is truly about. I doubt he has the intelligence to even understand the predicament he has gotten himself and the country into. If he were smart, he would abandon ship and just run. The wastage in his government has been truly unprecedented. With the trillions of Naira spent on the amnesty programme alone (with no end in sight), one can only imagine what all that money could have done in other key sectors of the economy.

I have started working on moving my family out of Nigeria until things settle down. At this rate, it seems the smart thing to do iis to move my family into a better adjusted economy and work my way back as I don't intend to abandon Nigeria entirely. I see this issue of Boko Haram getting worse this year and spreading to even the south.

I don't believe in God, but if there is one out there, there can't possibly be a better time than now for him to intervene in the matters of Nigeria.

omenka:
Wow!!! This is pure gold!! Thank you sir Charles! I hope these little jesters that come here to promote all those lies that bear stark contrast with realities on ground are reading this. And I hope the genuinely ignorant fellows that have been sold the lies over time can now take a step back and see for themselves what terrible dummies they've been sold.

By and large, Jonathan has added not a single substance to the economy of this nation since he came on board. All those statistics reeled out to the public about fledging economy by Iweala are all a tissue of lies.

LRNZH:
[b]Generally good piece from Soludo.

That said, he has over hyped OBJ and IBB's regimes. What happened to Murtala/OBJ regime in the 70s which laid the groundwork for Nigeria's development as we know it today?

Right now, give Nigeria stable electricity and see the miracles that this country will perform. Soludo is wrong to compare us with Greece and Spain who have reached a certain employment saturation. Nigera is yet to get there so electricity will guarantee jobs in Nigeria. He should be speaking 3rd world macro economics here.

Why not endorse GMB who is surrounded by proven technocrats and progressives?
GEJ grade F is true. But staying undecided is a vote for the incumbent. Soludo may be on the fence to avoid the ire of Igbo's who are mostly Pro-GEJ but he needs to stop burying his head in sand.

GMB is untested under current economic conditions but that is a better choice than a confirmed Grade F failure like GEJ. GMB still has the room to score from grade A to F.

Thank you former CBN Governor.[/b]

DoTheNeedful:
Look at your mouth like that of a tribalist,liar and hypocrite . Read the sh1t you wrote up there again and tell me you have not contradicted yourself. A journey of a thousand miles begin with a step. According to you,people like soludo will be the rallying point of biafra. Yet, with all his intelligence the biafra party in form of APGA could not even field him as gubernatorial candidate in Anambara(alaigbo).
Ironically,it is Nigeria "killing" the likes of Soludo that made him a CBN governor. I am sure you would not have known that a person like Soludo exist if not for the fact that a Yoruba man made hin a CBN governor .
You are pathetic

manny4life:
I read every single word and I am truly honored to have read this piece. I supported Jonathan but of recent, I have been more cautious than ever. The truth is our economy really needs help, unfortunately, Buhari isn't the man for the job either. Soludo rubbish both PDP and APC, man, he gave President Jonathan the bitter truth. Some may not like what he wrote, how he wrote and why he wrote it, but truth be told, Soludo asked pertinent questions. I liked where he hinted about the "Austerity" measures... How I wish this man could be my mentor, or yet work for him. He is endowed with wisdom.

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!

omenka:
I read every single word. This is a cutting edge masterpiece! I haven't the slightest of doubt Abati and co would do all they can to ensure Jonathan doesn't lay his hand on the paper. It might make him question all the things he's been told from day one because as it stands, the man seems completely detached from reality, dancing in the rain while his house is on fire.

One thing I know for sure is that Buhari will reduce to the barest minimum the cost of governance. He will do away with all those aircraft Jonathan secured for the presidency for God-only-knows which cost billions annually to maintain. He will free up more funds for capital commitments by ridding the executive of the retinue of needless aides, assistants, and advisers and senior special advisers.

There are just too many means of cutting costs and freeing up more funds to finance capital projects but believe me, it might backfire should Buhari mention some of those things on his campaign. So for now, I'm in support of him limiting his manifesto to what he's been telling us, the stakes are just too damn high to make any daredevil pronouncements at the moment.

EUROBOMBER:
You are correct my brother. Recent economic trends call for concern. I want to hear from both the PDP and the APC how they intend to get the Nigerian economy back on track.

This is not about shouting GEJ till 2019 or Sai Buhari!

Boss13:
Trust me, both have no clue. One is eager to stay; the other eager to accomplish a dream

Luchitec:
No doubt, Prof. Soludo raised some valid points about the state of affairs in the country. However, Soludo's denigration of Peter Obi for leaving funds in Anambra State coffers while at the same time praising OBJ's regime for accumulating a huge external reserve highlights his doublespeak and pettiness. Moreover, if stuffs that transpired in the banking sector during Sanusi's tenure at CBN are put into consideration, then Soludo is actually overrating himself as an economic guru.

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.

EUROBOMBER:
Then we have a big problem on our hands.

Boss13:
What was Peter Obi leaving the money for? To show he was honest? Sure he successfully built a fat account with no road to the bank to withdraw the money

ogene007:
What is Buhari's economic blueprint or is it a case of 'when we get there, we will know what to do'. Please, provide us with what policy direction APC intends to pursue, other than to come and reverse all the privitization that has been done and return us to status quo. Where will APC get the funding for all the bogus promises they are making all over the place. Let us not forget the Tinubu and Amaechi were two key individuals who vehemently kicked against any form of savings from the oil boom era, first, Tinubu went to court over the excess crude account set up by OBJ, and go the supreme court to declare it illegal, secondly, Amaechi under the governors forum, opposed the sovereign wealth fund that GEJ set up, they wanted GEJ to bring all the monies and share between the FG and state governments. Coming to the budget, how many times has the national assembly increased the crude oil benchmark for the yearly budgets? They always increase it to ensure that less is available for savings. That there hasn't been meaningful savings throughout the period of the oil boom, has not been for want of trying by GEJ and his economic team, rather, it has happened due to the collective greed of the likes of Tinubu, Amaechi and other key members of the opposition, who today have become the self appointed apostles of 'change', who is deceiving who? Where we fault Soludo in his analysis is that he failed to state clearly that the oil boom money was shared by the three levels of government.

cutestA:
I read the piece Soludo raised some vital pointys before he became consumed by the innate hatred he has for Gej and peter Obi for messing him up during Anambra guber election. Notwithstanding,he made some valid points but for the hidden agenda to discredit the achievements of the current government

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.