The year 2019 was an interesting year for Nigeria, dominated in Q1 by the general elections, and the inevitable drama they brought. It is not an exaggeration to say that all significant political and economic events took their lead from the vote in which President Buhari retained his position by a wider margin than that with which he first won it, thus giving him an endorsement of sorts to double down on his dated economic policies.
The President’s governance approach will challenge Nigeria’s economy going into the future. How will the country’s institutions, and indeed the wider economy, cope with policies that are implemented based on whims rather than data? Early indicators appear to suggest that the answer is: badly.
The first thing that needs fixing is the politics. In the election period, at least 600 people were killed in election-related incidents. As far as I know, no one is in custody for any of these deaths giving a strong incentive for impunity, one that was duly cashed on in subsequent sub-national elections. There is increasing voter apathy with the political process, a development which risks delegitimising future governments. This sets the stage for Nigeria’s biggest political challenge, which will be restoring faith in the democratic process. Sadly, this does not appear to be a priority for the current administration as the disinterest towards updating the Electoral Act indicates. Rather, regime entrenchment appears to be the matter of urgency.
Within the last month, after weeks of denial, a bill to extend the tenure of members of the Executive and legislators to a single term of six years was introduced in the National Assembly. The process risks putting the country on a political slippery slope. If it can be argued that two-term eight years isn’t enough time to appreciably turn around the fortunes of the country, it would not be long before arguments that a six-year single term is also not enough. When squared with bills seeking to regulate social media and “hate speech”, the trajectory of the current government is perilous. If the public has no ability to hold government accountable, we will no longer be in a democracy.
On the rule of law, the government continued to flout court orders late into the year with the repeated defiance of numerous court orders. Cherry-picking what court orders to obey do not indicate a government committed to the rule of law, and thus it is no surprise that foreign investment into the country has been on a steady downward trajectory. Capital does not like the uncertainty of arbitrariness.
Inflation is at its highest in nearly a decade, partially driven by the government’s arbitrary decision to shut the country’s land borders to all imports and exports. Food prices have surged beyond the seasonal spikes customary during the festive season. I don’t expect the border closure to end soon, and given that the fundamentals that cause smuggling, the initial reason the government gave for closing the border, well, whenever it is reopened, expect business to resume as usual.
Speaking of arbitrariness, the CBN’s decision to introduce a ₦50 charge on the use of Point-Of-Sale (POS) terminals for every transaction above ₦1000 had a depressingly predictable outcome of not only pushing more people to use cash to settle their transactions but also creating yet another barrier of entry for Nigerians whose lives are entirely governed by the informal economy; thereby creating the same cash management issues the CBN says it was trying to resolve with its Operation Cashless policy. Let us not talk about the attendant security risks. Regulatory somersaults do not come more elaborate than that.
All of these ill-thought out policy actions mean that the key metrics for measuring the wellbeing of the average Nigerian are in decline. Per capita income has fallen, unemployment is most probably at such a level that the failure to fund the National Bureau of Statistics (NBS) to do a single unemployment survey in the calendar year 2019 is very suspicious. This in a period of surging inflation and weak economic growth.
All of the government’s missteps in the year 2019 point to an almost indisputable fact: Nigeria’s government is severely cash-strapped and desperately needs money. That it is seeking fresh loans instead of embarking on long-overdue cost-cutting and reducing the size of government is telling. Heck, after agreeing to pay government workers 83 percent more than they were earning, the government found reasons, until faced with a shutdown, to kick the can down the road regarding those payments to an already bloated public service. At some point, Nigeria will face the reality of having to live within our means. The year 2020 starts tomorrow, and not one goal of the colourful Vision 2020:20 has been met. Until we fix the politics, Nigeria’s potential will remain unfulfilled.
CHETA NWANZE
