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Prof. Charles Soludo
Prof. Charles Soludo

The much orchestrated 2015 presidential election has come and gone without a major political crisis and much to the relief of the nation. However, the President-elect, General Muhammadu Buhari would on assumption of office on May 29, this year be facing what analysts have termed daunting challenges in rescuing the economy from the edge of abyss. No doubt, Nigeria has witnessed a downturn in its fortunes especially since the price of crude oil crashed in the international market. This has led to a deteriorating public finance which has not been seen since the inglorious days of the Structural Adjustment Programme (SAP).

The worsening state of the economy manifested in a sharp drop in naira/dollar exchange rate which was brought about by the significant drop in foreign reserve (below $30 billion). There has also been rising inflation (imported consumer goods), and inability of the state governments to pay salaries among others. All these factors played a significant role in the defeat suffered by President Goodluck Jonathan in the election. In the view of experts, if General Buhari is to live up to the expectation of the masses that elected him, he will need to declare a state of emergency in the economy. Top on the list of what most analysts agree the President-elect has to do to quickly turnaround the fortunes of the economy includes:

 Reducing the cost of governance

Since the inception of democratic governance, Nigerians have been fixated by the high cost of running government, which has averaged about 70 percent of total expenditure in the last 16 years, leaving a paltry 30 percent for capital expenditure. Early in his administration, President Jonathan set up the Presidential Advisory Council (PAC), a body of eminent Nigerians headed by General Theophilus Danjuma (rtd) which recommended streamlining Ministries, Departments and Agencies of government with a view to reducing the cost of governance. However, President Jonathan discountenanced the report; citing the constitutional requirement of having a representative from each state in the federal cabinet. This report merely reinforced an earlier report known as the Oronsaye report. None of the reports were implemented.

Gen. Theophilus Danjuma (rtd)
Gen. Theophilus Danjuma (rtd)

With the crash in crude oil price and the attendant drop in revenue, the present administration is now tightening its belt. The President-elect will do well, according to experts, to bring down the cost of governance. This he could start, for example, by selling off some aircraft in the presidential fleet as well as reducing the budget of the state house. The President-elect should also be working towards reducing the number of cabinet members as well as perks associated with such offices. When this is done, Buhari will have the moral high ground in lobbying members of the National Assembly to reduce their budget. This will not only bring in revenue but it will also build goodwill of the people.

Improving budget performance

Closely related to the issue of high cost of governance is the poor budget implementation especially the capital expenditure component which has averaged about 50 percent since the return of democratic governance. This has resulted in a double tragedy of not only that the money appropriated for capital expenditure is low but is further reduced by poor implementation of the budget which, according to Professor Mike Obadan of the University of Benin, has to do with low capacity of the MDAs, delay in passage of budgets and bureaucratic excesses of the Finance Ministry. Poor budget implementation heightened under the late Yar’ Adua administration following his directive that unutilised monies should be returned to the treasury at the end of the year.

The irony, according to experts, is that while the federal budget has tended to increase, budget implementation has seen a woeful decrease; with the attendant socio-economic consequences. The recent revelation by the Minister of Works, Mike Onolemenemen during the 2015 budget defence in the Senate that only N11.2 billion was allocated for capital expenditure by the Finance Ministry has sent tongues wagging. Worse is that, of the N98 billion allocated for capital projects in the 2014 budget, less than half—about N45 billion was released as at end December. Little wonder, abandoned infrastructural projects litter the country. “…abandoned capital projects littered all over the country amount to over $50billion,” Prof. Charles Soludo, former CBN governor recently wrote in a critical piece that drew the ire of the government. According to the works minister, several on-going projects in the country will suffer as only about 33 projects as against about 210 on-going projects were considered in the 2015 budget.

Poor budget performance has been a recurring source of bickering between lawmakers and officials of the Finance Ministry; who are frequently hauled before the lawmakers in front of camera. Repeated assurances by the Finance Minister to improve on performance of the budget have not been fulfilled. Buhari’s choice of finance minister has his work cut out for him in this regard, as Nigerians will keep a keen eye on the budget.

Rebuilding trust in government

An ‘outstanding’ feature of the outgoing administration is the high level of distrust for government. This was well manifested during the fuel subsidy removal saga. The groundswell of opposition to President Jonathan’s decision to remove fuel subsidy on New Year’s Day in 2012 jolted the government which led it to partially reinstate the subsidy. Nigerians, especially the organised labour, were taken aback when government jumped the gun in announcing the subsidy removal; reneging on agreement it had with the labour movement to make more consultations before reaching a decision. The subsequent use of the military to quell peaceful demonstrations evaporated the goodwill the administration rode on to power.

More so, the President’s continued insistence that a cabal was responsible for the staggering fuel subsidy payment angered Nigerians who saw a president lacking the will to take on entrenched interests; most of whom sponsored his election in 2011. Indeed, a presidential task force set up to probe the fuel subsidy saga, was bungled by the government which accused Nuhu Ribadu, the chairman of the taskforce of bias. Half-hearted attempt by the Economic and Financial Crimes Commission (EFCC) to prosecute those indicted for the subsidy scam, most of whom are prince lings and scions of prominent politicians did not erased any doubt from the masses that the government was for the elites.

The partisanship shown by hitherto respected institutions such as the military during the recently concluded presidential election further diminished trust of government and its institutions. It is no easy task rebuilding trust according to the World Bank; which effective governance depends on. The president-elect will have to personally lead the campaign of reforming public institutions and convincing Nigerians through actions such as bringing legislation guaranteeing independence for most public institutions.

Reviving anti-corruption campaign

Few will doubt that Buhari won the presidential election largely on the strength of his character and integrity. This factor will have to come to bear on riding government of corruption. Indeed, the president-elect has assured that his government will not condone corruption, stating in his acceptance speech “we shall strongly battle another form of evil that is even worse than terrorism—the evil of corruption. Corruption attacks and seeks to destroy our national institutions and character”. Under the Jonathan administration, the anti-corruption campaign sagged due to his unwillingness to rock the boat. There has been a lull at the EFCC as politically-exposed persons were quietly left off the hook. This was confirmed by several gaffes committed by the president during campaign in which he tried to justify his poor anti-corruption record. One of such gaffes was when he said corruption is not the same with stealing. This, no doubt, cost him re-election. It is globally recognised that there is high level of corruption in government in Nigeria. Corruption is entrenched in Nigeria and Buhari will have to dig deep to displace entrenched interests especially the fuel subsidy cabal.

Diversifying the economy

While the government was euphoric about the rebasing exercise which confirmed Nigeria as the largest economy in Africa, it pointed out to sceptics that the reform to diversify the economy away from crude oil was working. This was due to the fact that the rebasing confirmed that the contribution of oil and gas sector to the economy has dropped. However, what the rebasing did not confirm was that government revenue from crude oil has declined. The crash in crude oil price confirmed that the job of diversifying the economy has not been achieved. Government continues to rely on the oil and gas sector for most of its revenue even as the sector continue to dominate exports.

Diversifying the economy has been a mantra repeated by the outgoing administration. Though the Jonathan administration recognised the need to shift focus of production in the economy to other sectors, however, the government pursued the goal half-heartedly as it went on a spending spree, without adequate investment to improve infrastructure which is the linchpin upon which economic diversification will take-off. “The President-elect must give it all it takes to diversify the economy. The sorry state of the economy has lent credence to that,” says Hakeem Danbaba, a civil society advocate.

Improving electricity

Despite promises made by President Jonathan in 2011 to improve power in four years, nothing has changed going by the experience of Nigerians. Indeed, the government handed over the power distribution companies to private entities in December 2013. More than a year after, electricity supply and distribution have worsened. This was a key Achilles heel of the president exploited by the opposition party to gain support.

A key factor with which Nigerians will judge the Buhari administration is stable electricity. Providing stable electricity will not only jump-start the economy but will also build goodwill for the Buhari administration. The incoming administration will have to be firm with the power distribution companies, most of which have reneged on the promise to invest in distribution facilities. Also, the practice of crying to the government for bail out will have to give way so that effective and capable power companies can run the Distribution network.

Revamping education

The general consensus in the country is that the standard of education, especially tertiary education is in free fall. As a former academic, many thought President Jonathan will tackle the enduring problem. However, the response of the president was to establish more universities (glorified secondary schools according to critics) without consideration to quality. Indeed, the report by some media outlets that the University established by President Jonathan in his home town of Otuoke had more staff than students drew fierce criticism. Most Nigerian graduates are reported to be unemployable, lacking basic numeracy skills as well as good diction.

Revamping the quality of education should thus be a priority for the Buhari administration especially re-writing out-dated curriculum. “We need a government that will pay attention to our laboratories, our classrooms, lecturers’ welfare, keep our schools open and not renege on agreements with ASUU,” says Mr. Ikponmwonsa Ohenhen, a Petroleum Engineering lecturer at the University of Benin.

Reducing unemployment

High level of unemployment has led to high rate of crime in the country. The Jonathan government promised to provide millions of jobs which he tried doing through the YouWin programme of the government. Reducing unemployment depends on the state of the economy. Although, Buhari in his manifesto promised to provide 20,000 jobs per state in the first year (amounting to 720,000 jobs) which Professor Chukwuma Soludo, former CBN governor described as quota system in a country where about 2 million people enter the labour market yearly. The Buhari administration will have to be creative, according to Soludo, to be able to make a dent on poverty through job creation. Fixing decrepit infrastructure across the country will jump-start job creation. But declaring a national emergency will be a good way to start.

By Osaze Omoragbon



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