Atiku, Tinubu eye market economy as Buharinomics fails

With less than a year to the end of the current government, an appraisal of the Nigerian economy using a mix of metrics shows that the country is worse off now than when President Muhammadu Buhari took over seven years ago.

For this reason, stakeholders have said it is not going to be business as usual for the next president as the country grapples with high inflation rate, high unemployment rate, insecurity, dwindling purchasing power of households, high cost of raw materials, and naira depreciation.

President Buhari’s posture from the outset was to address corruption, insecurity and improve the standard of living of Nigerians. In the last ranking by the Mo Ibrahim Index, the Nigerian economy was classified as “increasing deterioration”.

The analysis of the Nigerian economy was carried out using the Global Multidimensional Poverty Index (MPI) 2021, Transparency International’s Corruption Perception Index (TI) 2021, Mo Ibrahim Index of African Governance 2020 and the Human Development Index (HDI) 2020, and all point to the same conclusion.

The MPI evaluates acute multidimensional poverty, by comparing socio-economic progress being made in more than 100 developing countries. It measures the extent of deprivation individuals suffer based on 10 indicators in three equally weighted categories, including healthcare, education and the standard of living.

According to the University of Oxford, multidimensional poverty means poor health, lack of education, inadequate living standards, disempowerment, poor quality of work, the threat of violence, and living in areas that are environmentally hazardous.

When split further, the above three broad indicators include nutrition, child mortality, years of schooling, school attendance and cooking fuel. Others are sanitation, drinking water, electricity, housing, and assets. MPI values range from 0 to 1, with higher values indicating higher multidimensional poverty.

Nigeria’s MPI was derived from the country’s demographic and health surveys conducted between 2015 and 2020, and collated from a sample size of 90,919 individuals. And based on the assessment, Nigeria’s MPI score was 0.254 in 2021. A low score such as Nigeria’s indicates a very high level of multidimensional poverty. The number of poor Nigerians has been predicted to reach 95 million by the end of 2022, according to the World Bank.

The MPI further showed that Nigeria’s intensity of deprivation was 54.8 percent, while 26.8 percent of Nigerians were in severe multidimensional poverty. Another set of Nigerians, 19.2 percent, were vulnerable to multidimensional poverty.

On what could have caused the high poverty intensity in the country, the report attributed 78.3 percent of Nigeria’s multidimensional poverty to challenges people encountered while accessing healthcare and education as well as the declining standard of living.

The Nigerian Medical Association recently said over 9,000 medical doctors left Nigeria in search of greener pastures in the United Kingdom, United States and Canada in the last two years.

Inaccessible quality healthcare caused 19.2 percent of the nation’s multidimensional poverty, 30.9 percent was caused by inadequate education, and 28.2 percent by the declining standard of living.

TI’s Corruption Perception Index put President Buhari’s anti-corruption drive under close scrutiny, because Nigeria has not fared well in the ranking in the last few years. Nigeria ranked 136th in 2015, having scored 26. It was ranked 144th in 2018 with a score of 27, while in 2021, it scored 24 and was ranked 154th in the world. A score of 100 signifies that the country is very clean while zero indicates a very corrupt country.

The number of high profile corruption cases uncovered in the last few years will leave no one in doubt about the TI rankings for Nigeria. Just recently, the country’s accountant-general was suspended for allegedly diverting over N100 billion; Ibrahim Magu, the former chairman of the Economic and Financial Crimes Commission was removed from office after he was accused of diverting recovered funds and seized assets, while the former managing director of the Niger Delta Development Commission was arrested over a fraud allegation running into N47 billion.

The Mo Ibrahim corroborates the aforementioned indexes. Nigeria’s overall ranking in the Mo Ibrahim Index of African Governance deteriorated between 2015 and 2019. From 48.9 in 2015 to 48.4 in 2016, it declined further to 46.7 in 2017 and 46.6 in 2018. The worst grade was in 2019 when the country got 45.5.

“TI rating on corruption is a perception of how corrupt a system is. With the consistent low rating of the country, Nigeria is perceived to be corrupt. It can also mean that the system that was put in place to check corrupt practices is not effective,” Moses Ojo, a Lagos-based economic analyst, said.

He said there had been an improvement in the HDI for Nigeria over time, from 0.465 in 2005 to 0.539 in 2019.

“However, the nation is still ranked among the low human development nations. This speaks to the fact that there has been a low level of investment in soft infrastructures such as healthcare and education or there is no impact of the meagre spending on soft infrastructures,” he said.

According to Ojo, with low life expectancy, high level of poverty, and declining purchasing power, it is expected that the HDI of the country will be low, impacting the contribution of the affected populace to the economic output.

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How Atiku, Tinubu will be different

Positive sentiment trailed the quick release of the economic agendas of the leading presidential candidates, as this is expected to raise the level of engagement with the electorate and give room for the scrutiny of their programmes before the general elections in 2023.

Atiku Abubakar and Bola Tinubu, flagbearers of the main opposition People’s Democratic Party and the ruling All Progressives Congress unveiled their economic agendas on Thursday.

“Many options are available to them to revive the economy. On the monetary side, the CBN needs to control inflation and float the naira. On the fiscal side, government needs to reduce its size, resolve the insecurity, deregulate the energy and power sectors,” Abiola Gbemisola, an investment analyst with FBNQuest Merchant Bank, said.

Both presidential candidates favour a market economy. This is why stakeholders believe they will depart from President Buhari’s style of economic management.

Announcing his economic agenda few days ago, Atiku anchored his programmes on three principles, which are reaffirming the critical sector of private leadership and greater private sector participation, repositioning the public sector for better service delivery, and enabling appropriate legal framework for rapid economy and social development.

“I will allow the market greater leverage in determining the prices; this way we shall eliminate the persistent price distortions occasioned by current interventionist exchange rate management policy. Government interventions, where absolutely necessary, will be done responsibly and judiciously,” he said.

Tinubu’s economic programmes will focus on job creation, value-addition in manufacturing and the revival of infrastructures in Nigeria.

According to him, if elected as the next president, he would focus on stimulating jobs, get Nigeria to work by launching a major public works programme, with significant and heavy investment being channelled into infrastructure, and value-adding manufacturing and agriculture.

He would anchor his growth plan for the economy on the establishment of sub-regional industrial hubs to exploit each zone’s competitive advantage and optimise their potential for industrial growth.

“My administration will build an efficient, fast-growing, and well-diversified emerging economy with a real GDP growth averaging 12 percent annually for the next four years, translating into millions of new jobs during this period,” Tinubu said.