Nigeria’s President Muhammadu Buhari has boasted in an interview with Bloomberg that his administration leaves Africa’s largest economy in a better place than it was when he was first elected in 2015.
The 79 year-old pointed to increased investments in infrastructure, recovery of stolen funds and improved security as key achievements.
He also defended the country’s expensive petrol subsidy practice as he accused western countries of doing the same while he claimed the country’s rising debt service to revenue ratio was necessary to achieve record investments in infrastructure.
Buhari also backed the Central Bank’s controversial foreign exchange management, saying there would be no change until the naira is no longer susceptible to external shocks.
“We leave Nigeria in a far better place than we found it,” Buhari said in an interview with international news outlet, Bloomberg.
“Corruption is less hidden, for Nigerians feel empowered to report it without fear, while money is returned; terrorists no longer hold any territory in Nigeria, and their leaders are deceased; and vast infrastructure development sets the country on course for sustainable and equitable growth,” Buhari said.
Nigeria has been in and out of two economic recessions under Buhari’s watch, with economic output shrinking by more than 20 percent since 2015.
The average growth rate under the outgoing president is less than the average population growth rate of 2.6 percent and that has caused poverty to spike in the country of 200 million people.
Buhari also defended his policy to maintain the expensive petrol subsidy despite the incessant scarcity of the product it has caused and the impact on the government’s balance sheet.
“Most western countries are today implementing fuel subsidies. Why would we remove ours now?” he said.
“What is good for the goose is good for the gander! What our western allies are learning the hard way is what looks good on paper and the human consequences are two different things.
“My government set in motion plans to remove the subsidy late last year. After further consultation with stakeholders, and as events unfolded this year, such a move became increasingly untenable,” Buhari said.
He added that increased local refining capacity, as private players and modular refineries (Dangote Refinery, BUA Group Refinery, Waltersmith Refinery) come on board, will help in the future.
Buhari also said that Nigeria would only seek exchange rate unification after the country has significantly improved domestic production of fuel and food. Without that “the exchange rate is still susceptible to external shocks that can suddenly and severely affect Nigerian citizens,” he said.
He also highlighted a renewed trust between Nigeria and its traditional western allies, the US and UK, evidenced by the jets acquired from the former and intelligence from the latter that have helped in taming the deadly terrorist group, Boko Haram.
He now however wants the separatist group called the Indigenous People of Biafra (IPOB) declared as a terrorist organisation.
“We urge those same international partners to take additional steps costing them nothing, by proscribing another group – IPOB – as a terrorist organization.
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“Their leadership enjoys safe haven in the West, broadcasting hate speech into Nigeria from London, spending millions lobbying members of the US Congress, and freely using international financial networks to arm agitators on the ground. This must stop,” he said.
Below are Buhari’s other responses to questions posed by Bloomberg:
Herder-farmer conflicts
My administration is the only in Nigeria’s history to implement a solution to decades-long herder-farmer conflicts, exacerbated by desertification and demographic growth. The National Livestock Transformation Plan, putting ranching at its core, is the only way to deplete the competition for resources at the core of the clashes.
Governors from some individual states have sought to play politics where ranches have been established; but where there have been disputes have dramatically reduced.
Economy
How prescient our policies for boosting domestic production have become! For years we have been criticised by the likes of the FT, the Economist, and others for supposedly mistaken attempts to de-globalise and re-localize food production and boost manufacturing.
Now with the war in Ukraine breaking global food supply chains “Davos Man” is in retreat as the energy crisis makes countries everywhere think again about energy independence and security.
We have spent our two terms investing heavily in national road, rail, and transport infrastructure set to unleash growth, connect communities, and lessen inequality. This is structural transformation.
It may not show on standard economic metrics now, but the results will be apparent in good time. Corruption Starting with our Whistleblowing Policy enacted in my first year in office hundreds of millions in stolen funds have been returned within Nigeria.
Working with our international partners, hundreds of millions of various currencies have been returned from abroad – primarily from the UK, US, and Switzerland – and used as social and welfare funds distributed directly to the poorest during the Covid pandemic and the provision of long-delayed infrastructure-roads, bridges, rail, and power.
As an illustration, Monetary recoveries (January-December) 2021 show that more N152 billion has been recovered.
Dollar recoveries for the year amount to over USD 386 million; GBP, more than 1.1 million; Euro, about 157,000; Saudi Riyals about 1.7 million some more in Digital and other currencies.
Those partners refused to return these monies held for decades to previous Nigerian administrations in the certainty they would simply be re-stolen. They changed their approach with us because they knew my administration could be trusted.
Food inflation
We can only imagine what food inflation would be today had we not initiated organized programmes to boost domestic production. And still, we do not grow enough domestically.
Initiatives such as the Nigeria Anchor Borrower’s programme, helping farmers compete against artificially lowered imports has boosted rice production to 9 million metric tonnes in 2021 from around 5.4 million metric tonnes in 2015. Even in the years of drought, rice production outstripped pre-2015 levels.
Imports have fallen to near zero. We are making progress. Against these advances international trade remains rigged against food security in Africa.
The EU’s policies in particular (see: It’s time for a new economic deal between the EU and Africa) are all rhetoric of open trade – yet their Common Agricultural Policy subsidy programmes and export of those subsidized goods create dependence, undermine Africa’s self-sufficiency, and cause food poverty and starvation.
If only out of enlightened self-interest the West – and particularly Europe – must step up. The moral if not economic case for doing so is unarguable. Do nothing, and more migrants from across the Sahel will attempt dangerous journeys to reach Europe.
Electricity shortfall
First, we need more input. Our legislative framework has been a drag. The landmark PIA (see later answers) will bolster input, raise capital, and bring transparency to the system. On grid modernization, there are hundreds of ongoing projects and initiatives attracting funding from investors.
Take my Presidential Power Initiative (PPI), a government-to-government initiative between the Governments of Nigeria and Germany, with Siemens AG, to upgrade the electricity grid with a $2 billion investment.
Once signed into law the constitutional amendment bill – recently voted through parliament – will allow state governments to generate and transmit their own electricity, further facilitating investor participation in our market and enabling states and local businesses to transmit excess supply to the grid.
We are also decentralizing the national grid through renewable driven mini-grids. The $550 million Nigeria Electrification Project has deployed more than 20,000 Standalone Solar Systems (SHS), as well as Solar Hybrid mini-grids in over 250 locations.
Rising debt service to revenue ratio
A narrow focus on debt misses the point. What it fills is Nigeria’s longstanding infrastructure deficit by constructing a foundation for sustainable growth – spreading opportunity to ensure no part of the country is left behind, which has led to insecurity in the past. Our infrastructure developments have been the most ambitious since Nigeria’s independence.
Over 800 federal roads are being constructed or undergoing rehabilitation and 650km of rail line have been laid, helping alleviate food inflation pressures, given most food is produced in the north.
Had the infrastructure gap not been filled it would only grow, becoming more costly to repair what little we have while lacking more on infrastructure on which to build growth, negatively impacting progress towards UN Sustainable Development Goals.
The challenge of low revenues and how to boost tax collection
Though we have the largest economy in Africa, it is true that translating that wealth into revenue generation is challenging. We raised VAT in 2020, and the IMF wanted us to raise it further, but this is a complex issue that cannot be addressed by tax hikes alone. Around 80% of Nigerians work in the so-called informal economy – a situation exacerbated by the pandemic. It is difficult to tax the informally employed, and no country has yet found an adequate solution.
Still, we are striving to find one, including the roll out of a national ID card which has grown from 7 million in 2015 to between 90-100 million today – including a tax code and, at the same time combined with access to various government services.
In 2016 I launched the Presidential Enabling Business Environment Council (PEBEC), making Nigeria an easier place to start and grow a business. PEBEC’s policies, as with our national ID card rollout, help integrate the informal sector.
We also work closely with ECOWAS to implement initiatives like the Support Programme for Tax Transition in West Africa (PATF), improving the management of domestic taxation and ensuring better coordination of taxation in the ECOWAS and West African Economic and Monetary Union.
Declining oil production
Four years ago, we unveiled plans for a new gas pipeline connecting Nigeria to Europe. Last week (2nd June) – in record time – the Nigerian National Petroleum Company (NNPC) entered into an agreement with the Economic Community of West African States (ECOWAS) for its construction.
Concurrently on 1st July the NNPC will become a Limited Liability Company and be subject to more robust auditing and commercial disclosure obligations. It will help stimulate investment and boost transparency, where corruption has deterred the former and stymied the latter.
My administration is the first to pass this landmark reform of our oil and gas sector, after two decades of predecessors’ failure to do so – no doubt due to vested interests. Criminality and terrorism in oil-producing regions hamper production, and it would help if our western allies designated IPOB as a terrorist group, given their complicity in damage to pipelines and infrastructure.
We have invested in our security forces, including the $1 billion military deal with the U.S. for the acquisition of A-29 Super Tucano aircraft. These efforts are making an impact: wells that had to be closed due to criminality have now reopened. With these efforts, OPEC has raised our quota for next month.
Can Nigeria gain from the gas supply crisis?
We need long term partnership not inconsistency and contradiction on green energy policy from the UK and European Union.
Investment is hampered by their broad-brush moratorium on overseas gas projects, while at home the same projects are classified as green. It does not help their energy security, it does not help Nigeria’s economy, and it does not help the environment.
It is a hypocrisy that must end. To change, the UK and EU countries should invest in our planned 4000 km pipeline to bring Nigerian gas – the largest reserves in Africa – via Morocco, then onto Europe.
CBN governor and political ambition
The CBN governor is appointed by the President. But this appointment is subject to confirmation by the Nigerian Senate. Ultimately, it will be for the CBN’s board of directors to determine whether a CBN governor’s actions have fallen foul of the laws in place to ensure he can most effectively carry out his duties.
But there is a subtext to the accusations. Because the governor follows a model outside of the economic orthodoxy, he is labelled political. But the orthodoxy has proved wrong time and again.
Instead, the governor is following an alternative economic model that puts people at the heart of policy. Nigeria should be free to choose its development model and how to construct our economy, so it functions for Nigerians.
