Buhari. |
Nothing
unites citizens like a prosperous commonwealth. A country without prosperity is
a country at war with itself.
History is a guide: The Greek Empire was
progressively united when the commonwealth was prosperous for all. When the
Roman Empire became more prosperous for all citizens, it replaced the Greek;
imperial Greece was no longer prosperous for all its citizens.
Nigeria is at a crossroads because
rather than being prosperous for all its citizens, it exists more for the tiny
privileged political and business classes. President Muhammadu Buhari has paid
more attention to reducing prosperity at all levels, to the extent that the
once-booming middle class has finally disappeared. As a result of Buhari’s
economic socialisation, the country is today dangerously divided into two
extreme classes — the tiny super-rich class and the sprawling super-poor.
But how did we get this backward? How
did our smoothly running economic journey not only get halted, but unbelievably
taken to such an economically egalitarian society where everyone is being made
economically poor? Imagine Nigeria experimenting with such a socialist economic
ideology as the one Deng Xiaoping had to dismantle in China starting from 1978,
and Mikhail Gorbachev had to discard in an effort to end the crushing classless
socialist economic experimentation in the Soviet Union!
Today, Nigeria has as many as 91 million
out of its 200 million citizens stuck in excruciating poverty to the
extent that the country has become the world’s poverty capital. All but about
1% of the country’s citizens fight for their survival every day, a situation
that has thrown the country into difficult-to-deal-with ethnic and religious
rivalries. The nation is in such an economic danger that if nothing is done —
that is, if Buharinomics is not stopped – it will be so
socially and economically threatened and devastated that millions of Nigerians
might be forced to head for other African countries in search of economic and
social survival.
The question remains: how did we get to
this economic desert, this social tipping point? How did we get to spending as
high as 66% of our revenue on just debt service? How has the country’s debt
profile skyrocketed from N12.06 trillion accumulated over 16 years (from
Obasanjo 1999 to Jonathan 2015) to N24 trillion in only four years of Buhari?
Why is it that it now costs Nigerians double the amount they used to spend four
years ago in order to put food on the table? How come Nigeria’s social security
has become worse than what is obtainable even in warring nations?
By growing big government, recurrent
expenditure, and consumption spending without any efforts made to ensure a
corresponding productive government, Buharinomics has undermined government
revenues. Consequently, fiscal deficits have grown in a way that skyrocketed domestic
debts with expensive high cost of debt service.
With this, the country is today
approaching a national debt crisis. Just imagine that Nigeria’s debt service
which stood at N943 billion in 2015 is today N2.04 trillion without
corresponding capital expenditure, particularly in infrastructure that is
critical to reducing the cost of doing business and improving the country’s
competitiveness. Not even the social welfare of the millions of Nigerians
increasingly being pushed down the poverty line is being taken care of.
So, what is Buharinomics all about? If
it is an ideology, how can we really explain this kind of ideology? The worst
debt service to revenue ratio in Nigeria’s history and in whole world. With
recurrent from N2.59 trillion in 2015 jumping unbelievably to N4.04 trillion in
2019, one is forced to wonder what kind of economic ideology is this that has
almost doubled the country’s debt service to revenue ratio from about 45% in
2015 to 70% today! What we are contending with is not perceptible economic
growth benefits but high debt service to revenue as a result of high government
spending, that is, over 80% consumption.
In the meantime, inflation is
increasingly difficult to combat without liquidity tightening, which by
reducing money in circulation goes further to reduce the overall purchasing
power of the already impoverished Nigerians as well as reduce private sector
investments. Mopping liquidity along with spending over $15 billion annually to
artificially strengthen the naira is unbelievably subsidising forex for
importers while putting local producers out of business along with more job
export and poverty import.
We have to stop Buhari from continuing
with this senseless dismemberment of the country’s economy. And there is no
other way to stop him than by voting him out on February 23; unless we do so,
the country would, by December 2020, become bankrupt. At that point, the
country would be forced to borrow to add to its revenue if it wanted to
continue to meet its debt service obligations.
Perhaps it will be difficult to stop
Buhari, given that those benefiting from this shambolic arrangement are doing
everything humanly possible to ensure that he is re-elected to continue with
this destruction of our commonwealth. No, we must take our economy out of
Buhari’s incompetent hands because allowing us to get to the point of
bankruptcy will automatically mean lenders stopping to lend to us, even if we
increased the policy rate to as high as 30%. At that point, lenders will
resort to demanding that we hand them our strategic oil reserves and other
important national assets. And should government refuse, then, they could go
ahead to confiscate our offshore assets including oil cargoes leaving the
shores of our country.
We all know that if this happens, it is
all over for Nigeria. At this point, all our crude oil buyers will avoid our
oil, while the cost of insuring oil cargoes will skyrocket. Also at this point,
the country’s foreign reserves would become zero, since creditors could be
given the right to take over such foreign reserve accounts.
We require someone like Atiku to reverse
this dangerous trend.
We need Atiku to set in motion a set of
pro-growth, pro-investment and pro-job policies – policies geared toward
stopping the looming bankruptcy by discontinuing the country’s expensive
domestic borrowings. We need Atiku whose prioritisation of cheap and
concessionary external loans will bring to an end the present crowding out of
the real sector firms from the debt markets and government social spending. And
to prevent the looming bankruptcy, besides replacing domestic loans with
external loans along with buying back of government’s debts using quantitative
easing, the Atiku administration intends to use some of the cheap external
loans for the repayment of the country’s expensive-to-service domestic loans.
Enwegbara, a development
economist, wrote from Abuja and can be reached via basil_enwegbara@yahoo.com
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