Economy: Challenges Before Buhari

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Today, the All
Progressives Congress (APC’s) presidential candidate in the March 28 election, General Muhammadu Buhari (rtd), will assume office as the next president of the Federal Republic of Nigeria, after six years of Dr. Goodluck Jonathan of the Peoples Democratic Party (PDP).
Buhari had hinged his electioneering campaign message on three of the nation’s key problems, namely: insecurity, economy and corruption.
Even while surrounded by the ever enthusiastic crowd that witnessed every one of his campaign rallies across the country, the former military Head of State had resisted the temptation to reach beyond these cardinal promises in order not to over excite the people.
For him, the nation was already in distress and no true patriot needed to pretend otherwise. It was surely not time for the usual bogus promises and bad politicking that characterized past electioneering experiences. Things must change for good. And it was up to the Nigerian electorate to decide whether they wanted that change or not.
Now that he has the people’s mandate to preside over state affairs, Buhari must begin to figure out how best to restore security across the country; stabilize the nation’s prostrate economy; and fight corruption, especially in the public service.
Although he had been reported to have suggested the need to tackle insecurity and unemployment before stabilizing the economy, Buhari had also in an address to a delegation of Northern elders on a congratulatory visit to him in Abuja recently, hinted on how he intends to begin the process of revamping the economy.
“In the economy, we have to quickly turn to agriculture and mining because that is where you can do the quickest work and earn results. In other areas, you need to study them and dust all the books and studies and get people, experienced people, committed people and technocrats to come and help the government and identify priorities so that with what is available to us, we can quickly make our people realize their hope for the government they have chosen.”
Nevertheless, the new president needs to wield a magic wand if he actually desires to turn around an economy that is already beset with a $63 billion debt burden; less than $30 billion foreign reserve; less than $2.5 billion Excess Crude Account; and with crude oil prices still hovering very close to the national budget benchmark.
For the most part of last week, business and social activities got to the brink of shutting down nationwide following what could arguably be described as the worst fuel crisis in Nigeria’s economic history. Flight cancellations, high transport fares, reduced banking hours, power blackout, impromptu school vacations and long-distance trekking were some of the discomforts brought upon the populace as oil workers embarked on an industrial strike ostensibly to arm-twist the outgoing Jonathan administration to pay outstanding fuel subsidy claims by major oil marketers. The strike was only called off after the workers got reassurances from the Senate that the incoming government will settle the marketers who have been accused by the outgoing Finance Minister, Dr. Ngozi Okonjo-Iweala, of inflating the receipted figures.
The implication of this is that Buhari has already inherited the controversial N250 billion fuel subsidy claims even as he is reportedly insisting that the interim committees’ report presented to him is silent on the issue. But even beyond that, the new administration needs to find a way of rehabilitating the nation’s refineries if there must be an end to fuel importation and the intermittent scarcities that generate unnecessary hiccups in the socio-economic system.
Even as Buhari is still being congratulated as winner of the March presidential poll and Jonathan hailed for his statesmanly concession of defeat, there is no disputing the fact that the campaigns leading to the elections were mostly rough and dirty. In fact, some observers believe that, for the first time in post-colonial Nigeria, the ranks of worship centres, alumni associations, market groups, town unions, youth organizations and even labour unions were deeply permeated by politicians. The present crisis in the Nigerian Labour Congress (NLC) is suspected to have been sponsored from outside the body prior to the elections. The same scenario was reported to have played out in some state councils. But how Buhari successfully reconciles the parallel leaderships of the NLC and other tainted unions will, to a large degree, depend on the sagacity of whoever he appoints as his labour minister.
Again, a number of professional bodies still have unresolved issues with the outgoing federal government, especially those bordering on special salary structures and improved working condition. Jonathan’s administration was variously accused of reneging on the implementation of agreements reached with nearly every one of these associations and for which reason some, including the Academic Staff Union of Universities (ASUU), had to embark on prolonged industrial actions at different times in the recent past. These and many more are patiently lying in wait for the new helmsman.
Crude oil theft is another problem which the new president has to tackle immediately. With its dwindling oil revenue, the government needs to restrategise on the current war against oil thieves and pipeline vandals. The billions of naira so far spent in pursuit of this effort every year have clearly not achieved the desired result as the economy has continued to haemorrhage from the exploits of these saboteurs.
Buhari and whatever team of experts he assembles eventually will surely inherit a very weak local currency resulting from depleted foreign reserves and an inflation rate that has gone back to double digit. This is exactly where his planned diversification to agriculture and mining will pay great dividends, if properly managed.
And to the issues of power generation, transmission and distribution, these are areas where President Buhari will surely need to wave his magic wand. Apart from successfully unbundling the former Power Holding Company of Nigeria (PHCN), the outgoing administration went a step further to privatise the PHCN subsidiaries in the hope that Nigerians would begin to enjoy better electricity supply at commensurate market rates. But even with the ever increasing consumer charge per kilowatt hour, such hope has continued to crash alongside the total national power output which fell from 3,600 megawatts before the 2013 privatisation exercise to the present output of about 2,700 megawatts.
The irony of the power situation in Nigeria is that output has continued to drop despite the Federal Government’s reforms and several direct investments in the sector. Nearly all the electricity generation facilities across the country have been reactivated or expanded with special intervention funds from the Central Bank of Nigeria (CBN) and credits from multinational finance agencies.
In fact, given the fervent desire of the people for uninterrupted electricity, there are Nigerians who strongly feel that any political leader who is able to permanently solve the nation’s power supply riddle during his first tenure in office will have easily earned himself a massive mandate for another term.
Buhari, therefore, needs to start early to initiate and coordinate policies that would serve to rein in inflation and give the naira a respite; just as Nigerians would expect him to be resolute in his fight against corruption as to help reduce the ever widening income gap in the country.

 

Ibelema Jumbo

Muhammadu Buhari
Muhammadu Buhari