Worried by the poor economic fundamentals in the last quarter and the possible consequences for the first quarter of this year and beyond, the organised private sector (OPS) has suggested some action points to get the economy back on track post-2019 elections, report Ibrahim Apekhade Yusuf and Charles Okonji
THERE are worries about the fate of the economy and these fears are not unfounded if the outcome of the Lagos Chamber of Commerce and Industry (LCCI) report released last Tuesday, is anything to go by. According to the report, the economy continues on a growth path. However, this growth is still weak, vulnerable and fragile.
It may be recalled that President Muhammadu Buhari campaigned in 2015 on the three-prong programme of economics, security and fighting corruption. In all the three areas, he and the government he leads, has failed, experts argue.
The devil is in the details
The latest release from the National Bureau of Statistics revealed that Q4 2018 GDP numbers grew by 2.4% compared to Q3 2018 growth of 1.8 % YoY. This growth mirrored the performance of the non-oil sector which improved by 2.7 % YoY. The full year GDP improved by 1.9% better than 2017 of 0.8%. This performance is still weak and fragile. It is also far below 3% annual population growth as this remain a cause for concern due to its wider on inclusive and sustainable growth in the country.
Outlook for agriculture sector
The sector expanded by 2.1% in 2018. This sector recorded the lowest growth since 1993. The major driver of this sector performance is Crop Production, which accounted for 88% of Agricultural output in 2018. In terms of contribution, Agriculture accounted for 25% of real output in the year.
Crude, Petroleum & Natural Gas
Average daily oil production stood at 1.91 million barrel per day in fourth quarter 2018. This was lower than the 1.95 MBPD recorded in same quarter 2017. The oil sector grew by 1.1% as against 4.69% recorded in 2017. This sector contributes 8.60 % in 2018
The Manufacturing sector recorded an annual growth rate of 2.09% in 2018, this marks significant improvement of -0.21% in the previous year. This sector contributes about 9.20 % to overall GDP
Trade sector contracted by -0.63 in 2018 from -1.05 % and -0.24% in 2016. The sector contributes 17.16% in 2018. The declining performance of this sector signifies that Nigerian consumers are still under severe pressure in terms of weak purchasing power, as trade is a major consumer facing sector.
Telecommunication and Information services sector grew by 11.33% in 2018 from -2.04% in 2017 and 2.03% in 2016. This sector contributes about 10% to overall GDP.
The Chairman, Policy Committee of MAN, who was also the former Chairman of Electrical Group of MAN, Engineer Reginald Odiah, told The Nation that if there is violence and delay in the electoral process, the economy which has already been stagnated would retard in its growth.
He noted that the growth would have persisted, but due to the political atmosphere that is already heated up, the growth figure which the economy recorded in the last quarter (Q4) of 2018 would have retarded, as economic activities have greatly reduced.
“Again, if the power situation of the country does not improve, the growth will not persist, and capacity utilization for industry must come up to some level, and the demand for the products manufactured locally and demand for electricity must be met. What I am seeing now is that we are not observing the full circle, but the full circle is that Nigerians must patronize made in Nigeria products, and the government must continue to encourage the patronage of made in Nigeria product so that the industries would continue to have demands. Once product demand begins to develop, electricity demand will also continue to increase, and the investors in power sector will be willing to consider investing more money into it. That is the circle we hope that we can achieve,” Odiah stressed.
Mixed reactions over parlous state of economy
In the view of AJ Daga Tolar, a civil rights activist, “Many economic indices have posted some of their worst records in history. Unemployment rate has reached a record high. Inflation, while it has slowed down, remains in doubt digits so far in the current term. For the first time in 25years, the country fell in to recession that lasted five quarters; though not the main making of the Buhari government, but exacerbated by its policies. The growth that followed the exit from the recession has remained fragile and sluggish as it is fuelled by oil, whose prices are volatile. The year 2018 ended with annual growth of 1.93% which is still weak.
The response of Buhari government to the economic crisis, he maintained, “Only worsened the living conditions of the working masses. Worthy of note is the fact that the economic crisis was triggered by the slump in oil prices which was worsened by the absence of fiscal buffers following the pillage of the economy by the PDP’s government. The twin policies of increase in fuel price and devaluation of naira introduced by Buhari government from the crest of its then popularity have not only worsened the living conditions of the working masses and the poor but also threw the economy to the tailspin. There was also increasing borrowing ostensibly to jumpstart the economy but which has heightened debt burden and whose servicing is close to the entire capital allocation.”
According to Tolar, “The response of Buhari government to the economic crisis only worsened the living conditions of the working masses. Worthy of note is the fact that the economic crisis was triggered by the slump in oil prices which was worsened by the absence of fiscal buffers following the pillage of the economy by the PDP’s government. The twin policies of increase in fuel price and devaluation of naira introduced by Buhari government from the crest of its then popularity have not only worsened the living conditions of the working masses and the poor but also threw the economy to the tailspin. There was also increasing borrowing ostensibly to jumpstart the economy but which has heightened debt burden and whose servicing is close to the entire capital allocation.
On security, while Boko Haram terrorists have not retaken many of the territories lost to assault of the military at early part of Buhari regime, they have regained the strength. There have been audacious attacks on the military bases leaving many soldiers and civilians dead and displaced. According to some reports, local and international, some towns and communities have been taken over by Boko Haram factions, while tens of thousands of civilians have been displaced. According to a senator from Borno State, most parts of Borno and Yobe States are impassable. Besides, despite the so-called technical defeat announced by Buhari government, Boko Haram were able to easily abduct school girls in Dapchi Yobe while the government was still negotiating the release of more of Chibok girls kidnapped under the Jonathan government in Borno. Worse still, the conditions of the IDPs and IDP Camps remain terrible, while soldiers are complaining of terrible living conditions, a situation that is reminiscent of the horrible days of Jonathan presidency.
There was also a worsening security situation following the renewed Biafra agitation and highhanded response of Buhari government. The herder-farmer conflicts which though predated Buhari administration got to a head with tit-for-tat cycles of killings. This was worsened and politicized by the body language and comments of the Buhari government including President Buhari and his defence minister as well as conducts of elements like Governor Ortom of Benue who was out to exploit the crisis to cover up his monumental failure. The banditry in Zamfara, Kaduna and Sokoto has sent many Nigerians to an early grave while the government seems helpless and clueless.
The anti-corruption fight which has seen a number of former government functionaries including top military officers being arrested and arraigned in courts is largely selective as the opposition figures seem to be the main target. The anti-corruption fight has not succeeded to deter corrupt practices across the country, and specifically within the Buhari government and the APC. For instance, it took publicly outcry before the former Secretary to Government of Federation (SGF) Babachir Lawal was suspended for the fund meant for the welfare of internally displaced victims of Boko Haram. He has just been arraigned a few days to the presidential election apparently to create an impression of sincere fight against corruption. Besides, many Nigerians are become less enamoured by the so-called anti-corruption fight as it has not translated into an improvement in their conditions. Rather, things are getting worse.
The fact is that on the basis of capitalism, which by its internal logic breeds corruption, no fight against corruption will be sincere and genuinely beneficial to the masses. Nonetheless, socialists support any fight against corruption and the culprits, whether the opposition figures or ruling party stalwarts, must be made to face justice including forfeiting the proceeds of the crime and spending years behind the bar. However, it is worth nothing that many of those who pillaged the country’s economy under the PDP and in the then opposition parties are now organized under the APC and APC governments across the country. Indeed, the leading elements in the Atiku campaigns, including Atiku himself and Bukola Saraki, were months ago, members of the APC, while some leading members of the Buhari campaign including el Rufai, Rotimi Amaechi, Ganduje, etc. are former leading members of the PDP.
On education and health care Buhari government of “change” continued the underfunding of the sectors that directly affect the working masses as it obtained in the sixteen years of the PDP. In spite of the glaring failure of the private ‘investors’, the Buhari government has also maintained the privatisation of electricity sector that was done by the PDP. Electricity tariffs have been hiked by at least 100 percent under the Buhari government.
How does Atiku, the main bourgeois challenger of Buhari, whose campaign theme is “Get Nigeria Working Again”, plan do things differently?
Atiku and the PDP believe that Buhari government is not implementing neo-liberal capitalist programmes deeply and thorough enough. This is what they mean by the incompetence of Buhari which is held as the reason for the failure of his government. So Atiku has promised if elected to sell the national oil company and deregulate the oil industry. He has promised to float Naira which in reality means an unfettered devaluation of the currency.
In other words, it is the same policies that worsened the economic crisis under Buhari government that Atiku is promising to deepen in order to turn around the economy of Nigeria and “Get Nigeria Working Again”! Besides, it was because Nigeria did not work in 16 years of the PDP that they were voted out of power in 2015. And, Nigeria did not work because of neo-liberal capitalist policies which led to closure of factories, job losses, rising mass poverty despite oil boom and its attendant economic growth, huge infrastructure deficiency, etc. The same ruinous neo-liberal capitalist programme constitutes the kernel of Atiku’s plan to Get Nigeria Working Again.
On corruption, Atiku, with a serious baggage of allegation of grand corruption and looting has promised to grant amnesty to looters instead of making them to face justice. He cited example of Turkey which according to him “gave amnesty and all the money abroad came back. The government said that if you bring the money, there is not even taxation.”
So he has assured the ruling class of a tax free regime on the loots of the country.
The fact that Atiku can win this presidential election despite the public perception of his being corrupt and his audacious remarks such as “enrich my friends” and “grant looters amnesty “as campaign promises is a serious indictment on Buhari who rode to power on the basis anti-corruption fight.
And Buhari, if re-elected, will not enjoy any period of honeymoon like he did the last time around, and the working masses, will be all muscle ready to struggle, both for the payment of whatever figure is agreed on for the new minimum wage and resist all manners of attacks, including the possibility of another fuel pump price increase or some other measures to further worsen standard of living of the masses. Nor will Atiku be given a life line; all of the previous sixteen years misrule and anti-poor people policies of the PDP at the helms of affair will come up to haunt the presidency.