Steve Hanke, a professor of applied economics at American Ivy League University, Johns Hopkins, has been critical of the economic record of Nigerian President Muhammadu Buhari.
Hanke, who analysed key economic indicators from unemployment to inflation, had some harsh words for Buhari and his administration for failing to improve the economy after five years in charge.
“Buhari continues to be asleep at the wheel while Nigeria sinks into chaos,” Hanke said, citing higher unemployment, inflation and poverty rates.
Hanke also claimed Nigeria had become a “bloodbath” under “Buhari’s reign of terror, corruption, mismanagement and incompetence,” as he bemoaned the spate of extra-judicial killings under the 77-year old.
He specifically referenced data by SBM Intelligence that showed that at least 1588 people have been killed in Nigeria between July and September from extrajudicial killings.
Read Also: Rising food costs, border closure push Nigeria inflation to near 3-yr high
“Justice can also be a hard thing to find in Buhari’s dystopian Nigeria,” Hanke said, referring to a recent survey by NOI polls where 88 percent of respondents in Nigeria said corruption was prevalent in the courts.
The comments of Hanke, a globally respected economist with 287,500 followers on Twitter, do little favours for Nigeria’s reputation globally. In a show of the reach he has, his tweets on the matter went viral.
One of his tweets, where he said “Buhari has failed and Nigeria is in the grip of chaos. Bandits control the highways and the government can’t protect its own citizens from Boko Haram or the corrupt police,” was retweeted 16,300 times and liked 14,600 times.
Some of Hanke’s impassioned comments on Nigeria’s many failings did however show that not all the blame could be laid at the feet of Buhari, with past leaders also contributing to some of the country’s current challenges.
“60 years ago, Nigeria gained independence, but what has it achieved? Rampant corruption, wasted oil revenues, lack of education and a worthless currency to name but a few and to top it off, Buhari is missing in action. What a record,” Hanke said.
Hanke also criticised the exemption of the Nigerian National Petroleum Corporation (NNPC) from operating the Treasury Single Account, which he said enables the state-owned oil company to go “on its merry way without oversight.”
“Nigeria’s TSA was meant to centralise government financials and allow oversight, yet Buhari exempted his own corrupt petroleum corporation,” Hanke, who has served as an adviser to heads of state in countries throughout Asia, South America, Europe, and the Middle East, said.
He suggested that the NNPC, long criticised for its opaqueness, should be privatised in order to get the refineries- which currently operate at 10 percent capacity- running and reverse the billions spent in importing petroleum products.
Over the years, the government has also indulged in a wasteful subsidy practice.
In the last four years, the government has spent four times more subsidising petrol than on capital projects for education, health and science and technology combined according to data by the Budget Office.
“These stunning facts are just the tip of the iceberg of Nigeria’s dysfunctional economy,” Hanke said.
Buhari may however be on the verge of scrapping the wasteful subsidy practice forever. The government announced a subsidy removal this year and the retail price for petrol has become flexible since then.
It’s not the first time Hanke has criticised Buhari. In 2017, the professor took a dim view of the President’s incessant travelling and nonchalant demeanour towards an economy in tatters.
He said at the time that “Buhari’s absence from Nigeria is representative of his nature as the president, his negligence brought about the worst recession in 25 years.”
Although the collapse in oil prices and militant-induced production disruptions took a big toll on the economy which slipped into its first recession in a quarter of a century in 2016, critics say Buhari’s socialist economic policies did the economy little favours.
It took a rebound in oil prices for the economy to exit recession in 2017 rather than well-thought out economic policies.
The signs that Nigeria’s exit from recession was not broad-based are reflected in the country’s negative growth in GDP per capita since 2015 and deepening poverty levels.
Unemployment in Africa’s most populous nation has more than tripled to 27 percent (as at the second quarter of 2020) since Buhari was first elected President in 2015, something Hanke was also quick to highlight in a chart he shared via his twitter handle.
Between 2006 and 2014, unemployment rate averaged 12.84 percent, about half the current level.
Several Nigerians have lost their jobs while others are faced with salary cuts or no pay at all as a result of the negative impact of the coronavirus pandemic on the economy.
Inflation is also at a record-high, accelerating by the most in nearly three years at 13.7 percent in September.
Hanke, who claims to measure Nigeria’s inflation each day using black-market exchange rates and Purchasing Power Parity (PPP), says the rate is closer to 30 percent, two times higher than the official rate published by the National Bureau of Statistics (NBS).
“This yields reliable measurements and is over two times the phony official rate reported by Governor Emefiele and the Central Bank of Nigeria (CBN),” Hanke said.
The persistent rise in inflation and unemployment indicates the worsening living standards for Nigerians as the hike in the prices of goods and services is unmatched by declining incomes, thus crippling the purchasing power of Nigerians and pulling more persons below the poverty line.
Poverty has been on a meteoric rise so much so that Nigeria overtook India, which has five times the population of Nigeria, as the country with the highest number of poor people in the world in 2018, according to American research group, Brookings Institution.
Some 87 million Nigerians are living in extreme poverty, nearly half of the total population.
If Nigeria’s poor people formed a country, it would be larger than the populations of Canada, Spain and Singapore combined.
Economists are projecting that an additional 7 million Nigerians will fall into a widening poverty pit by the end of 2020 with 5 million expected to come from the impact of the COVID-19 pandemic while 2 million people are expected to be impoverished by the more familiar problem of weak economic growth.
The living standard of Nigerians will only get worse if inflation and unemployment continue to escalate given the recent downturn in economic growth which saw GDP contract by 6.1 percent in Q2 2020 and is projected to further contract in Q3 2020.
If there’s a contraction in Q3, which the trend in the CBN’s manufacturing and non-manufacturing Q3 PMI indicates, then the economy would have entered its second recession in five years.
