MANY like us were left speechless and dumbfounded by the disturbing stark revelations made by the former Central Bank of Nigeria (CBN) Governor, Prof. Charles Soludo, in an article he recently made public about the Nigerian economy under the current government led by President Goodluck Jonathan and most importantly; the not too bright future and prospects of the economy looking at the two Presidential Candidates Nigerians are left to choose from in the upcoming general elections.
In his personal assessment of the current government led by President Goodluck Jonathan, the former CBN Governor out rightly graded the current government as a ‘failure’ with an “F9”. And as expected, the condemnation and outburst from different authorities of the current administration that greeted Soludo justifies the usual thing we see happen whenever someone tells the government the truth. While we are not here to speak for or against or defend what Soludo wrote in his article, but we believe whenever such critiques of the government activities are made, the authorities concerned should take it in good faith and make the necessary adjustments where necessary and ignore that which does not concern them.
This is a more ‘matured approach’ towards dealing with such constructive criticisms of the government rather than always going on the ‘defensive’ or seeing the critic as being sponsored by the opposition. It is only in Nigeria that whenever one says the truth or criticizes the ruling government that one is said to being sponsored by the opposition. But the truth is, often times it is those who want to see the necessary change take place in the country for the general good of all that criticizes and tells the government the Truth without fear or favour.
Unfortunately, our political leaders do not like being told the truth neither do they like being criticized constructively. They prefer the ‘sing-praises’ and sycophants around them to keep smooching their egos. Our political leaders usually bask in such euphoria of ‘pubic praises,’ especially when they ‘manage’ to execute one project or the other; making it look as if they are doing the followers a favour. This is why we were not surprised by the number of tongues that wagged and the condemnation that followed when Soludo took a big swipe against the current government and the prospects of the elections ahead. Perhaps, they are trying to tell Soludo that by now, he ought to understand that when it comes to the ‘Nigerian situation’ you do not just say the Truth like that (like throwing a ‘bomb’) on peoples face; you have to ‘paint it’ and make the government look good even when they are doing the wrong things. Seriously, how else would one explain the sort of ‘abuses and castigations’ that was reined on Soludo by relevant authorities of the current government over his mind-blowing article?
Like the former CBN Governor, we have also had our own fair share of accusations, condemnation and castigations from different stakeholders of past and present Government on national issues brought to public knowledge. However, this will not deter us from always saying the Truth concerning any observed ills in the Nigeria polity irrespective of whom or what is concerned. It is on that note that we want to once again remind the present PDP-led administration of President Jonathan about the depreciating and deplorable state of the Nigerian economy since this government took over when compared to past records, and reiterate the need for Mr. President to wake up from its slumber and address these concerns “if re-elected to the Presidential office” come March 28, 2015. And if not, the opposition is also obligated to look into these concerns about the Nigerian economy and address them holistically if elected. The bottom line is that whoever takes over the mantle of leadership as the country’s President for the next four years, should seriously ‘reverse’ the ‘falling state’ of the Nigerian economy.
To give us a hint of the concerns that we are talking about, which seriously need to be addressed, let us remind everyone of the deplorable present state of the Nigerian economy and situation when compared to the way things were before the current government came into office.
As widely reported, and also reiterated by the former CBN Governor in his said article; gathered facts and figures reveal that the present PDP-led President Goodluck Jonathan Government met Nigeria’s Debt Servicing at 19% but today it is 20%. The country’s exchange currency. The Naira, was at the exchange rate of N119 to the Dollar when this present government came in but today, Naira/Dollar exchange rate is at N250 – N230. Nigeria’s Poverty level index was at 54% when the present government came in but today, the poverty level is at 71%. Recurrent Expenditure was at 62% but today is at 86%. The present government met GDP growth at 11%, but today it is at only 6%. Let us not forget the ‘almighty’ price of petrol (Premium Motor Spirit – PMS) was at N65 when the present government came in before it was recently reduced from N97 to N87 official price but still sold over that price at the slightest scarcity. The Nigerian Stock Market that was thriving before the present government came in is now down by 3.4 trillion in just 12 months. The Warri Refinery that was working before is today shutdown as result of ‘no crude oil to refine’ due to large scale illegal bunkering activities.
For comparison purposes, former President Olusegun Obasanjo was said to have met about $5 billion in Nigeria’s foreign reserves, and the average monthly oil price for the 72 months he was in office was $38, and yet he left $43 billion in foreign reserves after paying $12 billion to write-off Nigeria’s external debt. In the last five years, the average monthly oil price has been over $100, and the quantity also higher but our foreign reserves have been declining and exchange rate depreciating. The former CBN Governor, Prof. Charles Soludo, also noted that when he assumed office as Governor of CBN, the stock of foreign reserves was $10 billion. The average monthly oil price during his 60 months in office was $59, but foreign reserve reached the all-time peak of $62 billion (and despite paying $12 billion for external debt, and losing over $15 billion during the unprecedented global financial and economic crisis) he left behind $45 billion. Recall also that our exchange rate continuously appreciated during this period and was at N117 to the dollar before the global crisis and according to him, they deliberately allowed it to depreciate in order to preserve the nation’s reserves. Soludo’s calculation was that if the economy was better managed, Nigeria’s foreign reserves should have been between $102 –$118 billion and exchange rate around N112 before the fall in oil prices. As of now, the reserves should be around $90 billion and exchange rate no higher than N125 per dollar.
To sum things up, Soludo noted that: “the mismanagement of our economy has brought us once more to the brink. Government officials rely on the artificial construct of debt to GDP ratio to tell us we can borrow as much as we want. That is nonsense, especially for an economy with a mono but highly volatile source of revenue and forex earnings. The chicken will soon come home to roost.
“Today, the combined domestic and external debt of the Federal Government is in excess of $40 billion. Add to this the fact that abandoned capital projects littered all over the country amount to over $50 billion. No word yet on other huge contingent liabilities. If oil prices continue to fall, we bet that Nigeria will soon have a heavy debt burden even with low debt to GDP ratio. Furthermore, given the current and capital account regime, it is evident that Nigeria does not have enough foreign reserves to adequately cover for imports plus short term liabilities. In essence, we are approaching the classic of what the Shagari government faced, and no wonder the hasty introduction of ‘austerity measures’ again. Poverty incidence and unemployment are also simultaneously at all-time high levels. According to the National Bureau of Statistics (NBS), poverty incidence grew to 69% in 2010 and projected to be 71% in 2011, with unemployment at 24%. This is the worst record in Nigeria’s history, and the paradox is that this happened during the unprecedented oil boom.”
Soludo also went on to advise “President Jonathan and his handlers to stop wasting their time trying to campaign on his job record. Those who have decided to vote for him will not do so because he has taken Nigeria to the moon. His record on the economy is a clear ‘F’ grade. As one reviews the laundry list of micro interventions the government calls its achievements, one wonders whether such list is all that the government could deliver with an unprecedented oil boom and an unprecedented public debt accumulation.
“I can clearly see why reasonable people are worried. Everywhere else in the world, government performance on the economy is measured by some outcome variables such as: income (GDP growth rate), stability of prices (inflation and exchange rate), unemployment rate, poverty rate, etc. On all these scores, this government has performed worse than its immediate predecessor— Obasanjo regime. If we appropriately adjust for oil income and debt, then this government is the worst in our history on the economy. All statistics are from the National Bureau of Statistics. Despite presiding over the biggest oil boom in our history, it has not added one percentage point to the growth rate of GDP compared to the Obasanjo regime especially the 2003- 2007 period. Obasanjo met GDP growth rate at 2% but averaged 7% within 2003- 07. The current government has been stuck at 6% despite an unprecedented oil boom. Income (GDP) growth has actually performed worse, and poverty escalated.
“This is the only government in our history where rapid increasing government expenditure was associated with increasing poverty. The director general of NBS stated in his written press conference address in 2011 that about 112 million Nigerians were living in poverty. Is this the record to defend? Obama had a tough time in his re-election in 2012 because unemployment reached 8%. Here, unemployment is at a record of 24% and poverty at an all-time 71% but people are prancing around, gloating about ‘performance’. As I write, the Naira exchange rate to the dollar is $210 at the parallel market. What a historic performance! Please save your breathe and save us the embarrassment. The President promised Nigeria nothing in the last election and we did not get value for money. He should this time around present us with his plan for the future, and focus on how he would redeem himself in the second term—if he wins!”
We are very much aware that the ruling party and government kept reminding Nigerians of the “great achievements” the present administration has been able to put in place to develop the Nigerian economy. Obviously, these so called “achievements” attained through President Jonathan’s “Transformation Agenda” were what the current government was expecting Soludo and many like us, to have looked at. And perhaps, it would have made us not to grade the government so poorly. These include the ‘refurbished’ and new trains the government spent billions of dollars to buy, the‘re-painted’ Airports across the country, and the fact that we used to have about 2000MW of electricity supply but now we have about 4000MW of electricity (which they consider as ‘great achievements’); whereas in Texas alone its US citizens enjoy a whopping 12000MW of electricity. The talk about Nigeria now producing “affordable cars” whereas; they forget that “Assembling cars” and brand them ‘Made In Nigeria’ is absolutely different from “Manufacturing cars” and sourcing all the materials at home. More so, how many Nigerians can afford these so called Made In Nigerian cars? These were some of the things the current administration is pointing at as what the former CBN governor and others like us ought to have used and looked at in grading the government. But they failed to realize that obviously, we used what is globally accepted as the indices in grading other President’s performance in other parts of the world, which include: Per Capital Income, GDP, Inflation, Exchange rate, Unemployment rate, Poverty rate etc.
To be candid, we believe President Jonathan and his aides of advisers should commend people like Prof. Charles Soludo for having the courage, boldness and doggedness to come out and constructively criticize the present government by telling the Truth. If anything, these are the kind of people the present Federal Government truly needs in their cabinet and not the usual sycophants we see all around the President. Sycophants who only praise the government, even when it is glaringly clear that the government has goofed, are only doing so to look good in the government’s eyes and create possibilities of gaining from the system; either through government contracts, appointments, employment slots etc. But somebody like Prof. Soludo, who obviously is not interested in getting anything from the government, is only telling them the truth constructively. These are the kind of people the government should embrace as their ‘friends’ and not the so called ‘praise-singers.’
After all said and done, the crux of the matter is that the present government has not done enough in improving the living standard of the poor Nigerian citizenry despite the enormous available resources that the government has been enjoying all these years. The opposition party(ies) that is clamoring to take over the seat of power have also not been able to holistically detail and educate Nigerians on how they intend to address the so many problems of the country in the face dwindling external reserves and oil price and depreciating currency. Therefore, it is imperative for those seeking for political power in the upcoming general elections to ‘seat up’ and ‘get their acts together’ if they want Nigerians to take them seriously.
Niger Delta Peace Coalition (NDPC)