Before Buhari took over power, the Jonathan administration squandered the whopping sum of N7.9 trillion without appropriation between 2010 and 2015. This is besides more than a trillion naira unaccounted for and wasted on the so-called Subsidy Reinvestment and Empowerment Programme (SURE-P), and trillions of naira fraudulently handed to business friends of politicians in the false name of import duty waivers and tax incentives. Over N5 trillion was spent on the so-called constituency projects, money federal lawmakers collected upfront without executing the projects the money was budgeted for.
Also notwithstanding the Fiscal Responsibility Act of 2007 which mandates government MDAs to remit 80 percent of their operating surpluses, having generated N3.06 trillion in 2009, they remitted only N46.8 billion; they generated N3.07 trillion in 2010 but remitted a mere N54.1 billion, and generated N3.17 trillion in 2011, whilst remitting a meagre sum of N73.8 billion. Little wonder the looting of the staggering sum of $501 billion, earned in oil revenues between May 2010 and February 2015, became the largest ever financial looting in human history. As if not enough, the country’s domestic debt rose from below N4 trillion in 2010, by the time Jonathan was leaving office, unbelievably to N13 trillion, with over N3.5 trillion spent, not on the repayment of the debt, but just on debt service payment.
But in one year of the Buhari administration, although the federal government’s TSA policy and the creation of fiscal efficient unit may not have fully blocked these mind-boggling leakages and wastages, yet it has at least brought them to the barest minimum, along with all checks and balances in place.
While the anti-graft war, the focal point of this administration goes on, it is not the war against corruption that should be celebrated by this government. It is the administration’s trying to ensure that Nigeria operates within the confines of the rule of law that should be celebrated. The rule of law, being alien to Nigerians, is for the first time in the history of our country making impunity caused by the rule of man increasingly a thing of the past in Nigeria. And that most African countries have never witnessed serious development is because they operate the rule of man rather than the rule of law.
With Nigeria having one of the world’s worst battered images, and avoided by serious foreign investors, the emergence of President Buhari as Nigeria’s ever best diplomatic brand is fast rebranding and remarketing our image around the world to the extent that our country is being accorded its rightful position in the world as both the most populous and the largest economy in Africa. In fact, our battered image has since been repaired that today the international community sees a decent Nigeria and most Nigerians as trustworthy people.
Foreign investors who used to hardly obey the laws of the land, thanks to President Buhari, are being forced to stop operating in Nigeria as if it were a no-man’s land. From MTN being slammed a N1.4 trillion penalty by NCC to Shell being sued for N1.3bn by the Federal Government on behalf of 350 communities in Delta and Bayelsa States for the crude oil spill that occurred at OML 118 Bonga Oilfield on December 20, 2011, the Buhari administration is telling these lawless foreign investors that the era of impunity is over in Nigeria. Even Guinness Nigeria has to pay a fine of $5 million imposed on it by NAFDAC for using expired raw materials in its brewing.
Aware that the country has witnessed one of the worst low infrastructure investments during its sixteen year of return to democracy, the Buhari administration has to increase the capital budget from less the than 20 percent it has always been to as high as 30 percent. What this means is that the combined total of N1,683 billion spent on capital budgets during the three preceding fiscal years of 2013, 2014, and 2015 was far less than the N1,845 billion the Buhari administration budgeted for capital expenditure in 2016 alone.
While the turning around of the economy during the past twelve months hasn’t been easy and also because it is not supposed to be easy, the administration no doubt, has made some significant progress in positioning the country’s economy on the growth path. But, rather than going back to study why it took past countries in our similar situation years to be able to restructure and reposition their economies, most of our economists have simply decided to join the opposition party in singing that little has been achieved.
For this reason, I believe that we should take a look at how the U.S, faced with similar economic challenges during the great depression of the 1930s, overcome this by voting in Franklin D. Roosevelt in 1932. And how it took two-and-a-half years (from March 4, 1933 to August 14, 1935) before Americans began to witness the much expected change, starting with the implementation of a Social Security Programme to the abandonment of the doctrine of laissez-faire. Even President FDR had to wait for his second tenure in office (precisely in February 2, 1937) before dropping the bombshell in altering the composition of the US Supreme Court, which allowed him to replace hard-core opposition party supreme court justices with justices ready to work with him to succeed.
In other words, to fully understand the causes of the economic problem, it took Roosevelt such a long period of meticulous thinking through problem, planning and testing his government’s set of strategies so that not only would his government never find itself back in the old system, but most importantly to make sure never again would America witness a devastating economic downturn. As a result, a full departure from the old economic conventions was discovered as the permanent answer.
Like America, China was in severe economic chaos to the extent that by December 1978 when Deng Xiaoping inherited the country’s economy from Mao Zedong, it was a completely rundown economy. But to get China out of economic woes and by avoiding the past mistakes, Deng knew he needed out of the box thinking and unconventional planning. To fully do away with those grave structural defects inherent in communist economic system, the Deng team had to come up with some best sets of development options which were never fully deployed until 1985; and even in 1989, there were unprecedented protests (April 15 – June 4) of the perceived economic hardships caused by Deng’s economic reforms.
While this is not telling Nigerians to stop being in a hurry with this administration, it is important that we understand the amount of time it took those great economic transformers to successfully take their countries from our kind of economic woes to economic stardom. That is why if we too want to become like those countries, we have to give the Buhari administration enough time to properly put in place some set of carefully designed plans should we want to see a turnaround of our overly battered economy. Therefore, we should know that patience is critical if we don’t want this administration to repeat the same old fire-brigade approach that brought us to where we are today.
Just like how Roosevelt administration’s revolutionary social welfare programmes, which suddenly turned millions of excluded poor Americans from mere economic spectators to active economic participants, and as a result of this singular policy demand, the depressed US economy suddenly began spectacular growth, Buhari administration’s N500bn social welfare package for Nigeria’s poorest holds the key to the transformation of the country’s grassroots economy. This has, since oil became our economic mainstay, been completely excluded and ignored by government after government, without understanding that it is the grassroots economy that holds the secret to our economic growth. Not only because it has a huge economic multiplier effect, but most important, its trickle-down effect is what will grow the economy out of the impending recession.
Odilim Enwegbara is an Abuja based Development Economist.