President Buhari, at half time

By Dr Ugoji Egbujo

The administration of President Muhammadu Buhari will be two years in office on Monday, May 29. It came to power with a vow to effect  radical changes in the governance of the country. APC, the party in government, among other things, made promises on Security, fight against corruption and the economy, especially job creation. Two years down the line, how has the  government fared on its cardinal agenda? And what is the perception of the elite and common people on on the government?

We got Nigerians from the various geopolitical zones in the country to pass verdict on the two years of President Muhammadu Buhari’s administration. Their views will interest you.

Our erudite columnist Ugoji Egbujo serves you a special review that is a must read. Check it out.

The review of Buhari’s two years in office continues tomorrow and runs through the week. Stay with us for the refreshingly different stories.

The president came with so much promise. He went straight for the jugular of Boko haram. He revived and revved the anti corruption engines. In nearly everything else, he didn’t hit the ground running although one could read his good intentions. He appointments lacked inclusiveness. He met a weak economy. The previous government earned so much and wasted much more. The economy was struck by two storms in the infancy of his government. Crude oil prices crashed to a 25 year low. Crude oil production was crippled by a resurgent Niger Delta militancy. But the president shouldn’t moan his luck. What left his government miserable was partly self inflicted. The government dithered and dithered, and failed to develop a coherent plan to contain the turbulence . Uncertainty was allowed to ravish the nation. Foreign capital fled. The import dependent economy couldn’t find oxygen in foreign exchange and fell into a coma. Professor Soludo says it was a compression, not a mere recession. What ever it was, it was utterly bleak. The ordinary people are still in pains.

The Naira told the story of a floundering nation ship. It plummeted to 520 Naira per dollar early 2017. There is now a calm. Government officials claim it’s a new dawn. But the long night hasn’t quite disappeared. What is sure is a flicker of light at the end of a yet dark and treacherous tunnel. The World Bank has urged very cautious optimism. The economy, it fears, is remarkably fragile. It lacks the capacity to survive foreseeable shocks in oil prices and upheavals in the Niger Delta. The president’s illness and attendant public anxiety adds a peculiar precariousness to the mix

Economy

The economy has shown green shoots. Oil prices have recovered to $50 per barrel and Niger Delta has calmed to allow Crude production @1.8m BPD. PMI has increased for the first time since late 2015. Manufacturing has ticked. Minimal but important growth is projected by the World bank and IMF for 2017 (0.8-1.5%). Naira’s hemorrhage has been stemmed. An Economic Recovery and Growth Plan (ERGP) has been advertised. The IMF has some reservations but says the ERGP is forward looking. It’s never too late to start. Many economic experts are not enthusiastic. Nigeria has a reputation of formulating plans it will not implement. It is hoped that the ERGP will be different

Economy has a fundamentally weak structure.

It is not the fault of this government. But with the demise of oil, it doesn’t have the luxury of shortsighted prodigality that has made some label oil a curse. Economic diversification can no longer be a slogan. Until the economy comes to rely less on imports and less on oil for foreign exchange, it will remain very vulnerable. Nigeria depends on oil for 90% of its foreign exchange earning. A crash in either crude prices or production can reverse all our hopes overnight. But there is more. The government’s structure is inefficient. Nigeria spends 90percent of all its earnings on the public service. In real terms, Nigeria’s public service is a Bolekaja with a gas guzzling 1800 engine. It isn’t just rickety and inefficient, it pollutes the country with noise and smoke of indolence and corruption. Effectively it destroys the present and jeopardizes the future. The government is then left to accumulate debts to fix decrepit physical infrastructure. And what is the result? A poor and beggarly Nigeria spends 34% of all its earning servicing debts.

This government knows this is not sustainable. The finance minister has released a 2017 fiscal road map. She says the ERGP will help tackle structural challenges. Time is running out. The people want to see coherent systematic efforts and tangible improvements in their lives

Wretched fiscal revenues

We don’t collect taxes. With a Tax to GDP ratio of 3-5% we are the about worst in tax gathering in Africa. To mop up taxes effectively, we must make taxes a moral obligation and not just a legal duty. But how can we achieve that? The government must convince citizens it can use extractive resources transparently and judiciously. It will be tough in a nation that has wasted billions of dollars on electricity and lives in abject darkness.

The government plans to push collection to 15% of GDP by 2020. It will rely on getting more persons to pay taxes. The government plans to raise Value Added Tax (VAT). Raising taxes in a sick economy can be treacherous.

The Customs Service, despite recent attempts at reformation, has remained the home of corruption and sharp practices. A reliable source insists that the Customs service loses more than 50% of its revenue to criminal collusion between Customs officers and clearing agents. The Customs must rely on systems and processes to reduce opportunity for corruption and improve collections. The government’s introduction of a Single Window will help transparency.

The 2017 Budget is not a fiscal stimulus.

The consensus is that economy needs fiscal stimulation. The 2017 budget looks big. In real dollar terms it is small, smaller than 2016’s. The financial blood transfusion the nation needs cannot be found in that prescription. The economic recovery and growth plan looks towards asset sales for massive capital injection. The government appears hesitant. Prof Soludo had criticized the Single Treasury Account because it drained an economy in need of significant stimulation of liquidity. The government introduced the TSA to stem fraud in government agencies. It is difficult to know if the impact on the economy was well considered.

It’s however noteworthy that capital projects in the budget constitute about 30% of total expenditure. It is an improvement over previous budgets. Recurrent expenditure is perennially too high. The government is borrowing to finance two new rail lines. A national development bank has been started to help fund MSME’s and SMEs. The economy is in need of a real push.

Monetary Policy

Transparent and sustainable exchange rate mechanism is needed….

The CBN battled for too long to find any rhythm. There is still not an objective, transparent exchange rate mechanism. The CBN’s prefers adhoc interventions. It has retained multiple official rates. The gulf between the official rates and the parallel market is still significant. The government can get credit for some stability. The wide disparity in rates remains however distortive. The 41 banned items maintain a pull on the parallel market. The finance minister has said the bans will be replaced with tariffs. The CBN has not responded. Distortion stunts growth.

Lending rates are prohibitively high.

The government is borrowing domestically at astronomical rates circa 14% per annum. That essentially crowds out the private sectors. The banks are happy buying lucrative risk free government instruments. A depressed economy is a sticky unstable commercial environment for lending anyway. No meaningful real sector activity can happen at interest rates in excess of 20%. Governor Nasir El Rufai has been lamenting. Local manufacturers can’t compete. This situation exposes the country to more imports and worsens the foreign exchange crisis. Job figures will not improve. Stagnancy will leave many social implications. The CBN wants to control inflation and keep the exchange rate stable by regimentation. Oby Ezekwesili considers that methodology outdated and counter productive. The CBN insists its interventions are needed to address distortions contributed by anxiety and worsened by speculation. But its critics say that preoccupation with cosmetics rather than enduring processes may make real recovery long and painful.

Economic policy coordination.

There has been a slight improvement in economic policy coordination. The government for a long time lacked clear sighted unified economic policy. Its fiscal policies tended towards fiscal stimulation and low interest rates. While the monetary policy pulled towards curbing inflation and effecting exchange rate stability by keeping interest rates high and mopping up liquidity. The unified direction is not still very clear. Dr Alex Otti thinks the CBN’s strategy is shortsighted. He thinks interests rates should be lowered to spur activity. That high interest rates will kill the real sector and will not stem demand for foreign exchange.

Ease of doing business and investment promotion

The government has initiated actions to facilitate business. Businesses can now be incorporated in 24 hours. Goods transit time in the ports will be reduced to 48 hours. Our ports will become more competitive with the Single Customs window. Efforts to boost exports have commenced. These initiatives are welcome. But someone should fix the roads leading to the ports. The government has announced efforts to make airports user friendly. Abuja airport was renovated on schedule. It is hoped that this inclination will birth a new culture that welcomes investments and investors.

Boko haram on the back foot

The government’s biggest achievement has been in the war against terrorism. The bombs haven’t ceased completely. But terrorists are no longer in control of any Nigerian territory. The military has performed creditably. Boko haram has morphed into a cowardly guerrilla group .

It is heartening that over a hundred Chibok girls abducted in 2014 have been released. The Chibok debacle brought the country international ridicule.

Prospects of a Boko haram ceasefire and truce

It is hoped that the negotiations will lead to more substantial negotiations.

At some point the government may have to negotiate with insurgents for a complete cessation of hostilities. The human and material cost of the war is telling. The war has constituted itself a major drain on our weak economy.

The IDPs and tales of hunger.

The federal and implicated state governments set a schedule for the resettlement displaced persons. These targets sadly have not been met. Liberated territories are still porous. But that isn’t the ugly part. Pictures of malnourished children and women in the IDP camps have shocked the nation. The agony of dislocation is unbearable. The mismanagement of resources meant for the displaced persons is unspeakable evil. The presidential Initiative on the North East must understand management of the IDPs is part of the war. Hunger could prove disastrous in other dimensions. It could drive those it hasn’t killed into the hands of Boko haram.

Herdsmen are still violent and still on the loose.

The activities of violent herdsmen have worsened over the last two years. The government’s initial response was lethargic. Many Christian and southern communities read it as nepotistic sympathy of a Fulani president for his kinsmen. Professor Wole Soyinka said the government didn’t appear interested in stopping the herdsmen. The activities of these herdsmen constitute the most important single threat to the unity of the country. The Federal government prefers demarcation of grazing routes. That won’t work. The herdsmen have sown hate. Cross country grazing must be abolished in all areas deemed crisis prone. State governments have seized the initiative. But national unity is fostered only when there is a consensus. The federal government should take charge.

Kidnapping, now a rampaging scourge.

Kidnapping was once rare in this country. It is now a rampant commercial activity. This government has done little to eradicate it. The public confidence in the police is still low. Kidnappers routinely collect ransoms. There is no effective deterrence. The IG’s Response Team led by Abba Kyari has resolved some high profile cases. But what is needed to stem the tide is a more widespread provision of requisite technology and expertise. Every Police Area command should possess the capacity to track and disrupt kidnappers, to rescue hostages. They must have the intelligence to penetrate and dismantle gangs. The government has not risen up to this challenge. Notorious Gangster, Evans, has collected over 3 billion naira in ransoms, and is still on the loose.

The Anti –Corruption War

The government has shown zeal in the war against corruption. The EFCC particularly has done very well in tracking and fighting corruption. The introduction of the whistle blowing policy incentive has exposed corruption and theft, and enhanced recoveries. The Integrated Pay Roll information System has exposed about 60,000 ghost workers and saved about 100 billion Naira. The institution of International Public Sector Accounting Standards will aid transparency in public service.

Accusations of selective justice and witch hunting by the opposition should not be ignored. The acceptability of the current effort will be enhanced if it is seen to be objective and impartial.

The arrest and trial of some judges was a high point in the fight against corruption. The judiciary’s reputation had long gone to the dogs. However, overzealousness must not replace patriotic passion. We must build our institutions. These institutions will mature over time if complaints lead to improvements. We must rely on systems and processes and not personalities The prevention of corruption by elimination of opportunities will save us a lot. We have weak criminal justice structures. The current effort, even with its excesses, is much better than the docility of the recent past.

The sibling rivalry between the EFCC and the DSS has been a major distraction. The inability of the president to keep his house in order has cast the impression of weakness.

Niger Delta

Relative peace has returned. National cohesion must remain a priority. The government’s economic recovery efforts are hinged on the Niger Delta. The government plans comprehensive development of the Niger delta. A multi billion dollar gas park has been approved. It plans to get production up to 2.5m BPD by 2020

Food sufficiency is on track

Rice production has tripled to 5 million tons per annum. The government’s target is to cease rice imports by 2018. The anchor borrowers scheme has been very effective. The synergy between Lagos and Kebbi in rice production must be emulated by others. Improved seedlings, more efficient farming methods and improved fertilizers have combined to boost food production. Presidential fertilizer initiative has crashed fertilizer prices by 50%. The government aims to achieve self sufficiency in Tomato paste and wheat by 2020. It targets massive exports of rice, cashew nuts, groundnuts, cassava and vegetable oil by 2020. He government’s food security plan is praise worthy

Politics.

The Political Parties are effectively redundant

The political parties have not evolved. The ruling party has failed to develop its structures and processes. It has failed to influence governance. It does not have a board of trustees. It does not hold regular executive council meetings. The Ondo primaries conflict exposed it as utterly dysfunctional. The main opposition party, the PDP, is in literal tatters. It has left oppositional duties to a few loquacious elected officials. No opposition party can portray itself as being soft on corruption and survive.

Elections and Electioneering

Nothing has changed. There is no visible attempt to reform the electioneering process. The parties have not fashioned ways to prevent money, violence and god-fatherism from hijacking party primaries. Effectively, the nation’s best are still shut out from our politics. And our political culture will stay steeped in opportunism. And it will keep breeding political office holders who loot the treasury to safeguard political relevance.

The ruling party can push through electronic voting. It’s a moral obligation. Without the card reader, this government could possibly have remained in the opposition forever.

Social Investment Programme

The N-power took 200,000 youths out of joblessness. The government has commenced school feeding program. The government has started 5000naira monthly conditional cash transfer to one million extremely poor people. The government deserves commendation for keeping these promises. Aba will benefit from a commercial park. Nnewi yearns for a multi billion Naira technology park.

Social orientation? Nothing inspiring.

‘Change begins with me’ has failed. It didn’t sway a leaf. It was empty rhetoric. There were no tangible visible changes in the lives of the leaders. The government failed to harness political capital and mobilize the citizenry. The ‘Buy Nigeria’ idea is commendable. It deserves a vigorous push. The executive orders signed by the acting president are commendable but they alone will not sell it. Our leaders must shun ostentation, and must, with determination, flaunt personal ‘Nigerian’ preferences.

Other Failed Expectations

Everyone knows we need a census urgently. But no one knows if the census scheduled for 2018 will hold. The APC promised restructuring. The government has been strangely silent on this. The APC promised Police reformation. The Police Force has not changed in structure or attitude. The Government promised improved power supply. The power supply has remained as epileptic as ever. Sports is full of confusion.

Good News

Fuel imports will end in 2019. The Dangote refinery is on schedule. Rice imports will end before 2019. Food security is now foreseeable. Fuel and foods constitute major drain of our foreign exchange. Our music and film industries are blossoming. This economic crisis will lead to a non-dependence on oil. Oil will die in ten years, with the coming of electric cars. The country will be set free!

Conclusion

The government must go into its dressing room sober. The lessons of the difficult first half must not be missed. A clear game plan must be developed. The dangers are clear. Substitutions must be made now. Best hands must be mobilized. Everyone must come to the party. Niger Delta militants must be kept quiet. Leakages must be plugged. The 2019 elections must not cause distraction. The president has not met expectations. But he has not failed. I wish the president a speedy recovery.

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