This is election week in Nigeria. Campaign rallies are on-going across the federation for the presidential, gubernatorial and legislative elections. Yet, the nation is not awash with cash. This is odd, most unusual. This is not the Nigeria we are used to.
In the weeks to the elections in 2015, the streets of Nigeria were awash with cash. There was ‘cash mobilisation’ for virtually everybody for all manners of services, right or wrong, towards electoral success. A lot of cash was shared out on campaign grounds too. It had been like that since the decade of independence. You could say it was a Nigerian thing. Not this time.
Something definitely has changed. This is not the usual Nigeria. It is a very significant pointer to the change which President Muhammadu Buhari and his All Progressives Congress (APC) promised in their 2015 campaign for which the electorates handed them victory. The electoral cash bazaar is over; wasteful and prodigal spending is out the door; sanity has taken over; Buhari is in charge, and things have changed!
It is not an accidental outcome. It was planned, and it kicked in with precision. The profligacy of electoral campaign seasons was never financed by legitimate cash. It had always been financed by misappropriations from government coffers at various levels. That was why the APC government made sweeping arrests of the human ‘cash machines’ immediately it came to power.
So many of these human ‘cash machines’ confessed to their crimes and made refunds to government coffers. Others are facing trials for brigandage running into billions of dollars. But for the wheel of justice rolling ever so slowly, they would have started serving their terms. However, they would get there, and President Buhari, by Executive Order which makes for the confiscation of proceeds of corruption, has ensured that they would not enjoy the proceeds of their crimes.
Beyond ensuring the recovery of stolen funds, the APC government has taken steps to tackle the problem of election cash bazaars right from the root. The basic question was: where and how does this corrupt funding emanate from?
The APC government carried out an audit of 15 Federal Government revenue-generating agencies and found out that between 2010 and 2015, their remittances fell short by N8.1 trillion! That is over N1.6 trillion per annum over the period. It is also over 25 percent of the national budget for the period! This massive under-remittance carried out by civil servants is often done with the knowledge and connivance of people in government to provide slush funds for various purposes. It is a major source of the electoral cash bazaar.
President Buhari has shut this huge window for good. That is why the cash bazaar hasn’t run this year – and will never run for as long as the APC is in power! It used to be that governments did whatever they could in terms of development within the first two years after the elections. From the third year, everything about development ceases and the governments stash up cash to prosecute the next elections with the usual cash bazaar. It is now over for good.
Now, the effects of this are visible in every neighbourhood, even for the simple to see. This campaign season shorn of cheap cash will see much less young men dying from drunken revelry and substance-induced brawls on behalf of political godfathers whose children are safely abroad.
Way beyond that, the Nigerian economy is much healthier without this wasteful spending and its resultant outcomes. Basic economics tells us that when there is too much money chasing too few goods, there is inflation. This is what happens after each electoral cash bazaar. The whole country suffers it through heightened inflation. It won’t happen this time, as a result of deliberate actions taken by the Buhari government.
There is also a foreign dimension to the election-related economic destabilisation which has also been sown up by the Buhari government. The Nigerian economy had been running on four-year cycles coinciding with the elections. It was a system well-known to institutional investors, especially foreign investors. And it has ensured constant crash and restart for the Nigerian economy.
Canada-based investment analyst, Pat Okaro, explains how this stultifying system has worked over the years:
“In Africa or the developing world, foreign investors sell off before any presidential election to avoid heightened risks of anarchy and breakout of violence post-election. And so, if you’re into the Nigerian Stock Exchange (NSE), you’ll notice that the market crashed every four years,” Okaro said.
“Now, enter Acting President Osinbajo who set up a special forex window for foreign investors. This window guarantees them to take out their dollars at the same rate they brought them in. So that removes the panic because in every election cycle when they sell off, not only does the stock market crash, but the naira also crashes as a result of oversupply. So with this guarantee, the foreigners are a bit relaxed.
“At this time in the last election cycle, GTBank was N17. Today, it is N33.50. At this time in the last election cycle, Zenith Bank was N17. Today, it is N22.50. Some of us have keyed into this predictable market response pre-election and have played it successfully in the last election cycles. It’s working this time, but obviously the returns won’t be as usual,” he said.
This would explain in a large measure why the nation has remained perennially underdeveloped. But Buhari has made this history now. Government’s revenue agencies have started making real remittances. A striking example is the Joint Admissions and Matriculation Board (JAMB) which organises entrance examinations to tertiary institutions. Between 2010 and 2016, JAMB remitted a meagre N51 million to the Federal Government. But in 2017 alone, this same JAMB under Buhari’s appointee remitted a mind-blowing N7.8 billion! And with the Treasury Single Account which the government pursued immediately it came to power, remittances to government coffers now flow automatically and don’t depend on the character of the head of the government agency. As a result, all these agencies had remitted some N8.9 trillion into government coffers by March 2018, averaging N2.9 trillion per annum. This is unprecedented, breaking the dependence on crude oil revenue alone for financing the budget!
Having dealt institutional corruption a mortal blow, the Buhari government had resources to embark on a comprehensive social investment programme. This programme aimed at helping the most vulnerable in the society include Home-Grown School Feeding Programme, Conditional Cash Transfer Programme, Government Enterprise and Empowerment Programme (which incorporates MarketMoni, FarmerMoni, and TraderMoni), as well as N-Power Programme.
The very interesting thing is that this social intervention scheme has been financed from a total budget of N500 billion between 2016 and 2018 fiscal years. The total budget for these three years is less than a third of the under-remittance for just a year under the previous government! Now, that’s the real dividend of democracy and good governance.
Larry Ifebelunoke
Ifebelunoke writes from Lagos.
