By Akanimo Sampson
Before the rampaging COVID-19 pandemic, economic watchers said Nigeria under President Muhammadu Buhari’s economics was struggling to shake off the long-term effect of a 2016 recession. At the moment, the country’s fast-growing population tends to be outstripping the Buharinomics growth, which they claim, stands at two per cent.
Now, the economic wahala appears to be getting worse with the latest data tumbling out of the National Bureau of Statistics (NBS). The statistics bureau says 83 million or some 40 per cent of the country’s population is classified as poor in 2019.
In its executive summary of the 2019 poverty and inequality report, NBS notes that between September 2018 and October 2019, it conducted the latest round of the Nigerian Living Standards Survey after 10 years.
The national poverty line is calculated by adding the food poverty line and the cost of non-food basic needs, according to the statistics office. NBS’ calculations showed that the value of the national poverty line was equal to N137,430 per person, per year.
The worrisome figures highlight that when the consumption expenditure of a Nigerian was below N137,430 per year, such individual is considered poor by national standards. This is even in exclusion of Borno State, the state in the North-East axis that is worst hit by the decade-long Boko Haram insurgency because many areas there were not safe to reach by NBS at the time of the survey.
Economic watchers, however, say by last December ending, it was clear the country’s economy was heading into a triple-shock crisis. United Nations estimates that Nigeria will have a population of 400 million by 2050, just three decades away.
Disturbingly, Nigeria is still relying on the oil from the Niger Delta, a vastly polluted area, for 90 per cent of its foreign exchange. Sadly, the oil price has been plunging due to the global coronavirus pandemic. The implication is that the COVID-19 crisis has been cutting government oil revenue.
Unarguably, Nigeria is one of the world’s largest oil producers, and as such, the precipitous drop in global oil prices has also put the country in an economic mess. It seems to be having a significant impact on government spending. The country relies on oil petroleum for at least 40% of tax revenue in recent years.
Before oil prices plummeted, Abuja was contending with low growth of around two per cent. Without a doubt, the seeming failure of the Buhari administration to diversify the economy and build much-needed transport and power infrastructure has stymied growth and the spread of wealth beyond a proliferating rich circle.
It is not entirely the fault of the All Progressives Congress’ (APC) administration under Buhari’s command. Poor infrastructure has been holding back development in the country.
Financial analysts are saying that while the Nigerian naira remains firmed around 6.5% on the black market the previous Tuesday from a week ago after the Central Bank resumed US dollar sales to commercial lenders following that week’s gradual easing of the coronavirus lockdown.
The obviously weak naira rose to 430 per dollar on the unofficial market patronised mostly by individuals with dollar expenses abroad. Before last week, it had previously hit N460, the weakest in three years as dollar shortages gripped the market.
The apex bank, CBN has said it will sell $100 million per week to help individuals meet foreign school fees, obligations and small businesses wishing to make essential imports needed to revamp economic activities.
At the beginning of this May, the International Energy Agency (IEA) said oil markets closed with a weekly gain. International benchmark Brent rose to $26.81 from $21.44 a week earlier. Production cuts of close to 10 million barrels per day (BPD) by OPEC+ kicked off the previous Friday as the cartel looks to mitigate the supply glut and falling prices caused by the unprecedented dip in consumption.
Oil demand is expected to fall by as much as 26 million BPD this May in the face of the land and continued air travel restrictions. Last March, Finance Minister, Zainab Ahmed, had said that with global oil prices plunging, this year’s record N10.59 trillion ($29.42 billion) budget will be cut by about 15 per cent.
At the time, she said the initial assumed oil price of $57 per barrel will be reduced to a worst-case scenario of $30 per barrel. But, on Tuesday, she said that the benchmark will again have to be revised downward.
In a web conference about the impact of low oil prices in Nigeria, the finance minister says, “we are in the process of an amendment that is bringing down the revenue indicator to $20 per barrel,’’ adding that the country’s oil and gas projects will be ‘delivered’ much later than originally planned” due to upstream budget cuts.
Minister of State for Budget and National Planning, Clem Ikanade Agba, had said that the Buhari administration was expecting the injection of around N2.00 trillion stimulus into the economy in response to the COVID-19 pandemic and the crashing oil prices.
He was speaking on Tuesday at a webinar on Citizens Dialogue Session on Government Fiscal Policy Decisions to the Fall in Oil Prices and the Covid-19 Pandemic organised by the Federal Ministry of Finance, Budget and National Planning and supported by Partnership to Engage, Reform and Learn (PERL) and the UK Department for International Development (DFID).
On paper, the country will be spending $311 million recovered Abacha loot on infrastructure development. But, the opposition Peoples Democratic Party (PDP) is alleging that some sacred cows are already looting the recovered Abacha loot. The late Head of State, General Sani Abacha, allegedly stole the funds when he dominated the affairs of the country as a military dictator.
Garba Shehu, President Buhari’s spokesman said on Tuesday: “These funds have already been allocated, and will be used in full, for vital and decades-overdue infrastructure development: The second Niger Bridge, the Lagos-Ibadan and Abuja-Kaduna-Kano expressways.’’
While Shehu also said part of the money will be invested in the 3,050-megawatt Mambilla hydroelectric plant, which has been planned for over three decades, the administration said it is in talks to discuss deferring debt service payments.
However, PDP is alleging that a cabal in the Presidency and APC are using fake subheads and duplicated projects as a ploy to re-loot the repatriated $311 million traced to Abacha.
The opposition is claiming that the cabal had perfected the use of fake subheads as nomenclatures to “mislead those who repatriated the fund and pave way for the frittering of the money to their private pockets as they had done with earlier repatriated funds.’’ It is demanding that the fund be surrendered to the National Assembly for proper statutory appropriation and urged Nigerians to resist schemes by the cabal to prevent them from demanding explanations on the looting of repatriated funds.
PDP’s spokesman, Kola Ologbondiyan, who made the allegation, adds, “the fraudulent dissipation of the funds will then be followed with false performance claims as well as blackmailing and intimidation of Nigerians demanding for both transparency and accountability in the handling of the money.
“Such had become the standard ruse for the cabal and APC leaders, who also looted the earlier repatriated $322 million under the guise of sharing money to the poor in 19 states and had no answers to allegations that more than 90 per cent of the 300,000 households listed as beneficiaries were phony family names.
“Nigerians would recall how the claims of the APC government were rubbished by the First Lady, Aisha Buhari, who had alerted the nation that the N500 billion Social Investment Programme of the Buhari administration was hugely shrouded in corruption and that bulk of the money did not get to the poor and vulnerable.
“Furthermore, the Federal Government had failed to publish the details of the alleged APC leaders who own the consulting firms that were allegedly paid billions of naira upfront as consultancy fee for the ‘sharing’ of the money, which was not also passed through the constitutionally required approval of the National Assembly.
“The APC-led Federal Government had also failed to account for the $308 million repatriated in February, for which it cannot point to any project, but rather faced with allegations of unbridled looting by the cabal and certain APC leaders, including those exposed to be receiving huge percentages from repatriated funds.
“{The PDP invites Nigerians to note that the APC government had remained silent on the report by the US Department of State that the Federal Government plots to funnel this repatriated money to certain individuals connected to the APC.’’
Firing back, APC says PDP is frustrated by a lack of access to loot public funds. Its National Publicity Secretary, Lanre Isa-Onilu, said ‘’going by the PDP’s, statement on the recovered $311 million repatriated funds, it is clear that the opposition party is salivating over Abacha loot, saddened by a missed opportunity to share the money as they used to.
“Unfortunately, PDP is unable to rid corruption from its DNA and until the party has the courage to burn its corruption handbook to ashes, it would be difficult for it not to hallucinate over public funds.
“Of course, we understand PDP’s frustrations. Its unsuccessful and serial attempts to tar the APC government with the corruption toga in order to blur its own image as a party that personifies corruption in words and deeds has turned the party into a laughing stock. For the umpteenth time, we remind the PDP that the government that the APC runs is not about sharing public funds amongst the ruling class, but about using taxpayers’ money to impact positively on the lives of the people.
“On the recovery of $311 million Abacha loot, we refer the PDP to the 2020 Asset Return Agreement which requires the fund to be transferred to CBN, Asset Recovery designated account and which would then be paid to the National Sovereign Investment Authority, NSIA, designated as the project management and execution authority within the next 14 days.
“The PDP should understand that the funds being repatriated under the President Buhari government is an indictment on successive PDP administrations which many countries found too corrupt and with a renowned propensity to re-loot the stolen monies, hence they held on to much of the funds.
“When the PDP administration under President Olusegun Obasanjo left office on 29 May 2007, the government had recouped $2 billion, including the $825million previously retrieved by General Abdulsalami Abubakar. Switzerland and Bailiwick of Jersey also repatriated $149 million in November 2003 and £22.5 million in June 2011, among other international and local recoveries by successive PDP governments which were shrouded in secrecy.
“Successive PDP governments strangely resisted widespread calls to periodically publish detailed information on the loot recovery exercise – the amounts recovered, those from whom they were recovered, sources or countries from where they were recovered.’’
Meanwhile, experts are highlighting that the current COVID-19 experience presents an ample opportunity for the government and policymakers to pursue structural reforms that will put in place homegrown policies to engender a rebound of the nation’s economy.
Reforms such as the liberalisation of the petroleum downstream sector, exchange rate convergence, securitisation of government equities in joint ventures, privatising Nigeria’s redundant assets and the PPP-led infrastructural development are critical to achieving these results.
And, for now, it is expected that the Buhari administration will provide the means of broadening competitiveness of agricultural production generally, and specific emphasis on select produce like cassava, sesame seeds, plantain, corn, rice, gum Arabic and sorghum for processing in industrial towns for food security and exports for industrial uses.
