To start with, this is not an attempt to defend Buharinomics , but just an attempt to set the records straight. Ours from the 1970s to the 1980s through the 1990s to the year 2000s and to date have always been the economy and there was never a time that we were “Better Off” but only getting “Worse Off” by the “passage” of each administration. What ought to have been done on the economy was never done, we have been postponing the evil day through economic cosmetics policies.
The economic hardship being experienced currently by most Nigerians “revolves” around the two major policies by the Tibunu’s administration; namely: fuel subsidy removal and the exchange rate unification. Everyone knows that Muhammad Sanusi II is an advocate of “subsidy removal” and “multiple exchange rates unification”. However, as its advocate it is better for him to convince Nigerians that the benefits on the people and the economy in the longer term are greater than the current “hardship” being experienced instead of “scapegoating” the immediate past administration.
We can not “debate” the “malaise” on the Nigerian economy in “isolation” of just one administration certainly no. Fuel subsidy removal for instance, was a policy decision that was long-overdue which ought to have been made in the late 1990s when our refineries became moribund. From the year 2000s to date our successive governments could not “revive” our local refineries which is largely the reason for subsidy payment either because they do not believe on government ownership of the refineries or do not just have the political will.
There were “procrastinations” and unsuccessful attempts at fuel subsidy removal by presidents Obasanjo, Yar’adua , Jonathan not just Buhari. Subsidy removal appeared to be a “difficult” policy decision to make by all of the said administrations perhaps due to its consequences on the masses and the likely stiff “resistance” from the labour unions. On the foreign exchange market, state interventions did not begin and end with Buhari’s administration. From the 1970s to date there were series of state interventions in different forms by successive presidents as against the much-needed floating of the market.
From the economic points of view there were so many top policy choices that ought to have been taken by successive governments on the economy not just on fuel subsidy and multiple exchange rates, but were not taken. President Tibunu has for the first time taken top policy choices beyond the successive economic “cosmetics”policies, but with no doubt the policy choices have immediate “consequences”on the “masses” which its seek to benefits in the longer term.
As convincing as the argument on the top policy choices taken by the Tibunu’s administration, I strongly “blame” the administration for its poor “planning” and lack of prompt “response” on the policies’ negative impact on workers and the general public. As an oil dependent economy from the 1970s to date we have had both oil “boom” and burst eras. The 1970s were “boom” eras, 1980s were largely “burst” eras with a “windfall” in the early 1990s, the 1990s largely witnessed serious political “back” and “forth”, the year 2000s to 2014 were largely “boom” eras, but from the year 2014 to date are largely “burst” eras.
Before the 1970s we had a diversified economy which was agarian with about 75% contributions to our exports. From the 1970s oil boom, the contributions of oil rose from about 25% in the late 1960s to about 96% in 2010. From then on the economy became mono-culture. For five decades crude oil remains the main source of our foreign exchange and government revenue especially at sub- national levels.
From the 1970s to date we had so many missed opportunities on the economy. During 1970s “oil boom” it was decleared that our problem was not money , but how to spend its. We then spent most of our “windfall”on Udoji award and World Black and African Festival of Arts and Culture (FESTAC).
By the 1980 we were back to square one as a result of “oil burst” we witnessed a lot of economic crisis which led to the adoption of Structural Adjustment Programme (SAP) with its live long consequential impact. By 1990/91 we had another opportunity due to “Gulf war” oil “windfall” which we spent chunk of its on “gift” to military officers. The 1990s economy was largely affected by a lot of political “back” and “forth” with series of economic sanctions against us by the international community.
From the mid 1970s to the year 2001 , Nigeria earned more than US$300billion from oil yet it was left with US$30 external debt by 2001 with little or nothing to show for its. Nigeria returns to democracy in 1999 with the price of crude at $15 per barrel; official exchange rate of US$1 to at N21; inflation rate of 6%; economic growth rate of about 2.1% and public debt of US$30. Soon after the return to democracy the price of oil began to appreciate steadily. It rose to $50 in 2005, then $61 in 2006, $69 in 2007 and $94 in 2008.
Excess Crude Account (ECA) was established in 2004 by Obasanjo’s administration for rainy days and saved about $25billion before he left office against all odds. He equally left about $60billion in the foreign reserves. However, oil prices dropped to $60 in 2009 and in 2010, it surged to $77 in 2011, it got to a record high of $107, and later to $109 in 2012, $105 in 2013, but dropped to $96.2 in 2014.
Due to our huge balances in reserves and the ECA during the 2008-2009 short-lived global economic meltdown we could not feel much impact on the economy, but by 2014 when the price of crude oil began to fall we just had US$30billion in the reserves and US$2billion in the ECA. Many observers wondered why would the balances on reserves and the ECA became so low despite the appreciable crude oil prices for many years on.
From July, 2014 when the price of crude began to fall to as low as US$27 in 2016 we do not have the economic “buffers” of the 2008-2009 period. The Buhari administration governed under three major economic crises; namely: low crude oil prices, COVID-19 pandemic and the Russian Ukrainian crisis. We witnessed the unprecedented free for all fall on the value of Naira.
In my thought, from 1999 to date president Obasanjo has no “match” in terms of policies and reforms while president Buhari even though “debt financed” has no “match” in terms of infrastructural strides on rails, roads, airports, irrigation sides, and intervention on agriculture etc.
May God bless Nigeria!
Nuruddeen writes from Kaduna
nurudeendauda24@gmail.com
