Nigerian President Muhammadu Buhari has accused his predecessor, Goodluck Jonathan of destroying the country’s economy.
It was contained in a statement signed by his media aide, Garba Shehu.
It read:
“With due respects to the former President Dr. Goodluck
Jonathan, these are the facts about the economy you left behind, in case
you have forgotten.“I hope this will help to erase the wrong statement credited to you
at your party, the PDP Convention at the Eagle Square last weekend that
you handed to President Buhari a robustly healthy economy.“To the same extent, this should also help to erase yet another false
statement by Senator Ahmed Mohammed Makarfi, the Caretaker Chairman of
the party, to the effect that under the previous administration there
was money but now things are very hard.“Let me start by reasserting an obvious statement, which is that the
President Muhammadu Buhari administration was handed an economy ravaged
by years of mismanagement and corruption.“It is understandable that Dr Jonathan kept his comments short
because a cursory look at any sector clearly indicated that he and his
Government presided over the most monumental and tragic economic
mismanagement recorded in our national history.“The oil sector boomed under his tenure, with oil prices as high as
US$ 120 and peace in the Nigeria Delta. Nigeria earned unprecedented
dollar revenues. Sadly, that is where the story turns sour. There is
nothing to show for the revenues earned, no major capital project was
completed, neither power generation, road development, rail or
agriculture benefitted from the windfall earnings. Rather the
administration presided over the diversion of oil revenues on a such a
massive scale, that even without the protection now accorded to Whistle
blowers, the then Central Bank Governor blew not only a whistle but a
trumpet. He was hurriedly shown the door.“Meanwhile, the acquisition by public officers and their cohorts of
private jets, luxury yachts and the accumulation of expensive property
portfolios worldwide continued unabated. Indeed, the President once
celebrated having the largest number of private jets, whilst our youth
languished without jobs, our fields stood idle and our factories began
the lay off of workers.“The government simply reticulated oil revenue through personal
spending by corrupt leaders, wasteful expenses and salaries. This was
done rather than investing in what would grow the economy. Economies
grow due to capital investment in assets like seaports, airports, power
plants, railways, roads and housing. Nigeria can not record a single
major infrastructural project in the last 10 years. In short, the money
was mismanaged.“Such was the looting that even the goose that was laying the golden
egg was being systematically starved. The direct contractual costs of
oil produced, in the form of cash calls, remained unpaid. The incoming,
President Buhari’s welcome from the oil majors included demand for
US$6Bn owed by Nigeria for oil that had already been sold or stolen.“At the inception of the current administration, 21 States were
unable to meet their salary bills and the spectre of workers arrears had
commenced. The PDP solution was the raid the Ecological Fund and
selectively grant N2bn each to the PDP States. It was only aggressive
borrowing by the Ministry of Finance under Dr Okonjo- Iweala that
prevented Federal Government from also owing salaries. The economic
wisdom of borrowing to pay recurrent bills is a questionable one,
particularly as those paid would have included over 45,000 that have
subsequently been removed by the Buhari led administration as ghost
workers. It also included the lavish costs of chartering private jets,
first class travel and other wasteful acts that have been eliminated
under this administration.“To compound the problem the government was borrowing heavily and
owed contractors, and international oil companies. When this government
took over we had accumulated debt back to the level it was before the
Paris Club Debt Forgiveness.“All these factors were building up to Nigeria heading for a major
crisis if the price of oil fell. Nigeria did not have fiscal buffers to
withstand an oil shock.“The oil shock should and could have been foreseen. When Islamic
State of Iraq and Syria, ISIS crisis started, it was clear that the
United States of America wanted to cut off funds to terror groups by
crashing the price of oil. When America granted permission for
exploration of oil on land ( Shale) the warning signs were evident, but
these were ignored by Nigeria’s economic managers.“Such was the looting that even the goose that was laying the golden
egg was being systematically starved. The direct contractual costs of
oil produced, in the form of cash calls, remained unpaid. The incoming
President Buhari’s welcome from the oil majors included demand for
US$6Bn owed by Nigeria for oil that had already been sold or stolen.“At the inception of the Buhari administration, 21 States were unable
to meet their salary bills and the specter of workers arrears had
commenced. The PDP solution was to raid the Ecological Fund and
selectively grant N2Bn each to the PDP States. It was only aggressive
borrowing by the Ministry of Finance that prevented Federal Government
from also owing salaries. The economic wisdom of borrowing to pay
recurrent bills is a questionable one, particularly as those paid would
have included over 45,000 that have subsequently been removed by the
Buhari led administration as ghost workers. It also included the lavish
costs of chartering private jets, first class travel and other wasteful
acts that have been eliminated under this administration.“In summary, Nigeria earned a lot of money when oil prices were high
but there is nothing to show for it. Now oil prices have fallen we are
suffering.What could they have done differently?
They could have begun doing the very things that the Muhammadu Buhari administration is doing so painfully now:
1. Fight corruption.
2. Sanitize the huge salary bill by eliminating payroll fraud.
3. Reduce wasteful expenses like First Class Travel and Private jets.
4. Encourage State Governments to reform their spending and build savings or investments.
5. Increase spending on capital projects especially on infrastructure
needed to make Nigerian businesses competitive and create jobs.6. Block the leakages that allowed government revenues to be siphoned into private hands.
7. Focus on key sectors ( apart from oil) that can create jobs and or
generate revenue such as Agriculture, Solid Minerals, and
Manufacturing.“If these things had been done when the oil price was as high as
US$120 per barrel, Nigeria would not be in the current predicament.“We would not be suffering now if we had no cash reserves but we had
power, or a rail system, or good roads, or good housing. But we don’t
have money and we don’t have the projects either.“Now that the oil has fallen below those levels, it is very difficult
to do what is needed but they must be done to save Nigeria. There is no
other way if we want to be honest.“If PDP were still in power they would have continued deceiving
people, by borrowing to fund stealing and wastage and the problem would
have simply been postponed for future generations to face.“One of former President Jonathon’s specific boasts is that dollar
under him was N180 compared to today. With such a line of argument, it
is clear why we are where we are. With oil prices as high as $120 the
average inflow of dollars each month was high, making it easy to support
cheap dollars. However, with oil price plummeting as low as $28, the
fundamental laws of supply and demand dictated that the currency would
need to adjust since oil was the sole export. It is instructive to note
that virtually every major oil exporter has witnessed currency
adjustments with the fall in oil price.“The Buhari administration has taken a long term strategic view of
supporting a stable naira on both the supply and demand sides. President
Buhari has driven Import substitution to reduce demand for dollars to
buy things we can produce thereby creating thousands of rural jobs in
rice and other staples. In addition, there is a credible plan to
diversify our revenue sources away from oil, with a focus on export
crops as well as solid minerals, with the release of US$100M fund to
develop solid mineral extraction.“President Muhammdu Buhari has a positive and prosperous vision for
Nigeria. A nation in which the natural talent and hard work of the
people is being supported by an enabling environment for infrastructural
development and policy reforms that will develop a firm future for our
nation. Nigerians are looking forward and the PDP’s lurking in the
economic rear view mirror only underscores the resolve of Nigerians,
that as far as the economy is concerned it is “never again.”