In the past 4 years, apparent breakdown of law and order across the entire nation has been a serious concern for many. This is in addition to the Boko Haram scourge that has obviously challenged and seems to be overwhelming his capacity. His government has failed to respond adequately to the growing menace of Fulani militia ravaging swathes of the middle belt of the country, the south-west, and other parts of southern Nigeria. Kidnapping, ritual killings and violent crimes continue to terrorize everyday living in Nigeria.
Sometimes too, the security apparatuses of the police, the army and the navy, collude with terrorist in orchestrating this macabre dance of death on hapless citizens. It would not be far-fetched to conclude that in the past 4 years, life in Nigeria has come full circle to the Hobbesian state of nature where life is nasty, brutish and short. Everyday harvests of deaths and corpses clearly demonstrate government’s manifest lack of concern for the lives of ordinary Nigerians.
Rather than proactive police measures to address structural problems in the economy, his preferred style was to man the system by attempting to block leakages which led him relapsing into his old ways of economic protectionism that negated liberal market principles. Lapses in administration were frequently apparent and often compounded by frequent logjams with the legislature. But particularly worrisome in the past 4 years is the plunge into lame excuses in the glaring inability to keep to his 2014 campaign promises and a never-ending, nauseating, blame game. With most campaign promises all but reneged, the government found itself in a manufacturing labyrinth of subterfuges and innuendos and when things got out of hand, his ministers were caught in barefaced lies and cover-ups. His media handlers have turned deception, half-truths, spinning, agenda-setting, priming and cover-ups into an art form. The situation has been so bad that some feel that Nigeria now epitomizes the post-truth society.
These concerns were re-echoed by leading international news covers that greeted his re-election. As the news of his re-election last February filtered in, Financial Times declared that “Nigeria’s returning president has a chance to make amends.” The Telegraph of London asked: “Is Nigeria about to become the next Venezuela? The signs are not good.” The Economist said that it is “time to keep those promises” and the BBC News asked: “do the promises stack up?” At home and abroad, the signal is that Buhari’s second term as Nigeria’s head of government is burdened with a damaging credibility and integrity deficit. But like the Financial Times, we think Buhari can still redeem himself and that integrity of his that Nigerians had believed.
Nigeria is bedeviled by six core problems of growth, investment, debt, energy, and of course, inequality. Granted all of these problems preceded Buhari’s second coming in 2015, but his approach so far seems to be nibbling at them. Without decisive pro-market reforms it is likely to be “old wine in old bottle.”
Growth has decelerated over the last ten years from the peak of 8 percent in 2011 to current 2 percent. For the past 3 years, Nigeria growth rate has underperformed both global and regional average with a mean growth rate of just 2 percent over the last 5 years while the population expands by 3 percent each year which is a percent higher than the GDP. Crudely speaking, we have more people than could be taken care of by our productivity. As is common in such situations, the bulk of the wealth concentrates on quite a few individuals. Recent Oxfam research estimates that just 2 percent of Nigerians own almost all the deposits in Nigerian banks and just 5 percent of the population own approximately 40 percent of the GDP.
At current 2%, growth is suboptimal, leaving a population gap of 2%. In other words, to beat population, the economy must grow at about 4%. While this absorbs the population expansion, it does not guarantee full employment. To generate full employment, the economy must grow at about 6%. This should remove the employment gap. However, to build a sustainable economy with a transformational capacity requires a GDP growth rate of above 8%. Unfortunately, the highly regulated macroeconomic system of economic patriotism preferred by Buhari’s administration in the second trimester lacks the required momentum to spur the level of growth required to fill the population gap, the employment gap and the transformational gap which guarantees real improvement in the quality of life of citizens.
Corresponding with this suboptimal growth is the investment trap. Following his preference for neo-dirigiste policies, the economy has bled investments, especially foreign direct investments, reversing previous years of record FDIs during which Nigeria was among the most attractive destination for foreign capital in emerging markets. Lack of investment stymies growth since it is the catalyst for sustained economic growth with multiplier effect on aggregate income.
- To be continued
Bongo Adi
