…economy with a bad attitude
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The Nigerian economy has a bad attitude. I am sure you know that by now. This attitude borders on pure hostility and an unholy determination to defeat every effort by our leaders to tame it and free the nation and its people from the ever-present danger of our descent into poverty.
I trace the beginning of the bad attitude of the economy to between 1981and 1982 when the crude oil buyers in the international market refused to buy our crude oil in quantities large enough to keep the petro-dollar flowing into our national treasury. This resulted into something called glut – a technical name for too much oil looking for scarce buyers. We had on our hands the blight dreaded by the managers of every nation’s economy called recession. Wealth receding like the hair on your pate? Got it.
Nigeria was instantly faced with serious new challenges in the management of its economy. It was forced to accept that the crude oil market is volatile. It is unreliable at the best of times. Its vagaries could, and without warning, suddenly turn the flow of petro-dollar into a trickle. For the first time since crude oil put our country on the world map of rich nations, we faced the challenge of managing poverty – not one of the easiest challenges in life.
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But President Shehu Shagari, bless him, rose to the challenge. He imposed austerity measures on the country to force federal and state governments as well as individuals to spend less and live less conspicuously, as in substituting kaftan for richly embroidered baban riga and palm wine and ogogoro and burukutu for Crystal champagne. Rice, milk and semovita became essential commodities for which we queued up for hours daily to get our family rations. It was not the best of times – recession times, that is.
It would seem that that the president could not quite force the economy to change its bad attitude. The austerity measures did not, for instance stop the national chairman of the ruling party, Chief Adisa Akinloye, from importing personalized champagne. The situation attracted the military politicians, and they abandoned their barracks for state and government houses. The coup announcer, Brigadier-General Sani Abacha (as he was then) said they were forced to return because the economy “had been hopelessly mismanaged.” Because of the continuing bad attitude of the economy, our democracy found itself impaled on the spike.
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And then, there began a series of military approaches and experiments to make the economy behave. Major-General Muhammadu Buhari, the new head of state, decided that the first step was to restore the confidence of our international business partners in us a credit worthy nation. He committed 45 per cent of his budget to servicing the debts accumulated during the brief life span of the second republic. He also exchanged the crude oil few wanted for the goods we needed to import. But I do not think the economy was impressed sufficiently to make the steps he took the right steps needed to wean it from its bad attitude.
Then the batons changed hands within the military. Major-General (as he was then) Ibrahim Babangida climbed the saddle. He introduced the most radical approach to the management of the national economy. He believed the way to go was to attack the economy by structurally adjusting its base, not in line with the infamous IMF and the World Bank prescriptions for ailing national economies but as home-grown alternatives to them – prescriptions designed by Nigerians and owned by Nigerians.
The structural adjustment programme, with the unfortunate acronym of SAP, meant that we now had to contend with the pains associated with restructuring the economy. We did not prepare for this painful turn of events. We rioted. The SAP riots of 1989 told Babangida in no uncertain terms that the bad attitude of the economy had more or less defeated his home-grown prescriptions.
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The bad habit of the economy remains with us today. It has turned us into a nation with the cruel paradox of rich but poor nation. Buhari returned to power as a civilian president in 2015, promising to fix the economy and end that paradox. But a year later, in 2016, the economy with a bad habit showed its hands again. A second recession hit us, I think between the eyes.
The bad attitude of the national economy has hit our nation with a litany of woes. Chew on a few of them here, if you will. Because of the bad habit of the economy, 138 million Nigerians are poor; 98.8 million live, not just in poverty but in extreme poverty. It feels like standing on the precipice. Because of the bad attitude of the economy, our country became the poverty capital of the world in 2017. India wore that crown for many years. Nigeria dethroned India – an achievement no Nigerian is proud of. India has 1.3 billion people; Nigeria has 200 million people. It is not natural for the less populated nation to be poorer than the more populated nation.
Still, the news on the economic front continues to spell the word b-a-d for our country. In its 2019 Nigeria Economic Update released last week, the World Bank predicted that if the economy continues with its current bad attitude, Nigeria would continue to get poorer and extremely poorer and that by the year 2030, 30 million more Nigerians would drop down the line from poor to extremely poor. And Nigeria will be home to 25% of the world’s extremely poor.
To put a fine point on it, the World Poverty Clock reports that Nigeria sinks into greater poverty every six minutes. That steady slide towards the precipice took the number of the extremely poor in the country from 87 million to some 98.8 million in early December 2019. Remember that we are between 198 and 200 million people. The extremely poor figure means that nearly half of us are living on less than $1.90 a day. The bad habit of the economy is a deep-rooted problem. It has shamed our rulers one after the other. It refuses to relent. It boggles the mind.
Buhari promised to lift 100 million out of poverty in the next 10 years. It works out at 10 million people a year. The applause that attends that promise must be moderated by the fact that the president does not have ten years in Aso Rock, although it is not impossible that whatever policy he might initiate could outlive his tenure and ten years later, he could claim the credit for it. If his promise holds, we should expect 30 million fewer people living below the poverty line by the time he leaves office in 2023.
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So far, Buhari has not released the blueprint for his welcome ambition. I hope there is one. He goes a-borrowing now because to cure the economy of its bad habit, there must be money to spend by the government. Borrowing takes the borrower down the path of grief. Makes you feel that his promise is targeted at a political sound bite. In other words, an empty promise based neither on empirical facts on our current situation nor on pragmatic blueprint for tackling the problem.
There is no room for a cosmetic approach to the problem. According to the World Bank, “economic and demographic projections highlight the urgent need for reform. With population growth (estimated at 2.6 per cent) outpacing economic growth in a context of weak job creation, per capita income is falling.”
The World Bank also reports that “Close to 80 per cent of poor households are in northern Nigeria.” This is not exactly new, but it shows how truly slowly we have moved all these years to make a difference in how the economy benefits all Nigerians. With this growing disparity between the north and the south, we shall eventually create two Nigerias – one, relatively well off and living above the poverty line and the other sinking deeper into the morass of extreme poverty.
The bank warns that “inaction” or “a business-as-usual scenario” is not an option open to the Nigerian government. Nigeria, it says, “has the opportunity to advance reforms to mitigate” the consequences of the steady slide down the poverty chute. Buhari needs no one to tell him to grab that opportunity to halt the slide and moderate the bad habit of the economy. He failed to do so; he resorted to jumbo loans totaling at the last count, 77 trillion Naira. The man left office last month as the biggest borrower and the poorest economic manager so far who sat on the Aso Rock political throne.
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He left his successor, President Bola Tinubu, with enormous challenges of rescuing the national economy from its sink hole. The ball is now in Tinubu’s court. Will he play it differently and cure our national economy of its bad attitude or will he continue along the same safe of cosmetics, borrow more and continue with the illusion of the good times and beguile us with motion without movement?
It is his call. The economy is waiting for him. For his sake, for our sake and the for the sake of our nation, Tinubu cannot afford to be defeated by the admittedly horrendous challenges of managing poverty in our rich but poor nation.
(This column was first published on December 13, 2019. A few but fundamental changes were made to it in this version.)
