Mr. President: The economy By Eze Onyekpere

To match Interview NIGERIA-BUHARI/This discourse seeks to affirm the need for the economy to be prioritised in President Muhammadu Buhari’s schedules and interventions. The first 100 days of the Buhari administration was for settling down and the high wire politics that goes with one administration displacing another. A visitor would have mistaken the change of government as a coup d’état instead of a mandate acquired through the ballot box. After the elections and swearing in, the campaign of the ruling party still continued and reasons continued being offered for the change of government and the depth of crisis inherited from the previous administration. But we all knew the previous government did not live up to expectations and that was the reason for the majority vote for the All Progressives Congress government.

However, the time has come for us to focus on transforming livelihoods and changing the direction of the economy. As a prelude to the direction proposed by this discourse, it is imperative to review the current state of our economy which to a great extent influences livelihoods. Crude oil funds about 70 per cent of our national budget. In the past one year, the price of crude oil has declined from the epic heights of over $120 per barrel. Nigeria has struggled to meet the budget benchmark price of $53 per barrel as oil has sold below the benchmark price for weeks. May be, due to the decreased revenue accruing to the Federation Account, not a single kobo has been released for capital budget implementation in the 2015 federal budget. The Federal Government is simply paying salaries and disbursing overheads without any investment in capital expenditure. This is a disturbing trend in an infrastructure deficient economy. This shows that there is need for savings and cutting down on recurrent costs to free up resources for capital investments. In previous years 2010-2014, actual capital expenditure as a percentage of overall spending has averaged less than 23 per cent.

Economic growth has been sluggish in the last couple of quarters. During Quarter 2 of 2015, the National Bureau of Statistics stated as follows of the oil sector. “Oil production stood at 2.05 million barrels per day (mbpd) 5.9 per cent lower from production in Q1 of 2015. Oil production was also lower relative to the corresponding quarter in 2014 by 7.3 per cent when output was recorded at 2.21mbpd”. In other words, beyond the reduced price of crude oil, Nigeria’s production has reduced compared to years 2013 and 2014. Again, the NBS states that:” As a result, real growth of the oil sector slowed by 6.79 per cent (year-on-year) in Q2 of 2015. This represents a decline relative to growth recorded in Q2 of 2014 (5.14 per cent). Growth was however relatively better by 1.35 per cent points relative to growth in Q1 of 2015. Quarter-on-Quarter, growth also slowed by 3.82 per cent. As a share of the economy, the Oil sector represented 9.80% of total real GDP, down from the shares recorded in the corresponding period of 2014 and the share in Q1 of 2015 by 0.96 per cent points and 0.65 per cent points respectively”. For the non-oil sector, NBS states as follow: “Growth in the non-oil sector was largely driven by the activities of trade, crop production, construction and telecommunications. The non-oil sector grew by 3.46 per cent in real terms in Q2 of 2015. This was 2.13 per cent points lower from Q1 of 2015 and 3.26 per cent points lower from the corresponding quarter in 2014. In real terms, the non-oil sector contributed 90.20 per cent to the nation’s GDP, marginally higher from shares recorded in Q1 of 2015 (89.55 per cent) and Q2 of 2014 (89.24 per cent)”.

From 2000 to the year 2007, the external reserves grew by 35.17 per cent indicating a very buoyant economic growth. However, from the year 2008 to 2015, the external reserves declined by an average of -4.48 per cent indicating the down turn in the economy. One of the indicators for measuring the fiscal sustainability of the economy is to review the percentage of total personnel cost to total government expenditure. The good and fit practice threshold is 40 per cent and according the Revenue Mobilisation Allocation and Fiscal Commission, “if the ratio of personnel cost to the total expenditure exceeds 40 per cent, it might affect the capacity of the economy to embark on investment programmmes, thus impairing growth and development of the economy.” In the last four years, the percentage of personnel to total government expenditure was 43.09 per cent for 2011; 43.83 per cent for 2012; 38.45 per cent for 2013; 40.11 per cent for 2014. For 2015, when only salaries and overheads are the order of the day, one needs not be a soothsayer to know that it will be in excess of 50 per cent of overall government expenditure. Personnel cost is soaring and has remianed above 40 per cent for some time now. While the new defintion and process of calculating unemployment adopted by the NBS may not be totally acceptable, the statistics show soaring unemployment. The NBS Unemployment and Under-employment Watch released for Quarter 2, 2015 tells a pathetic story.

What do all these mass of statistics and information mean and tell? Simply put, it is a message that there is fire on the mountan; that things are not the way they used to be and urgent and drastic steps are needed to reverse the decline. This brings me to the gravamen of this discourse. It is a plea to Mr. President: Yes, he must get to hear of this as I do not want the “it is well” and “hossana choir” to drown this plea. It is time to focus on the economy; fix the economy while fighting corruption and plugging leakages. Nigeria needs new ideas, deepening existing good ideas, expanding and expounding the frontiers of the language, dialogue and action on rights and development and moving out of the box of the euphoria of the honeymoon of having won elections.

Open up Mr.President on the challenges you face, begin to talk more to Nigerians and let us begin to see actions. Charge corrupt persons to court. Wait not a day more to get your cabinet in place. Roll out your core policies and stop denying the promises made during your campaigns. It will be honourable to tell Nigerians that the resources to implement campaign promises are no longer available. The reputation was of a man who keeps his word and denials hurt and threaten that reputataion and lowers your estimation in the eyes of right thinking non-partsan men and women. Deploy available resources to implement the 2015 capital budget. If the resources are not avilable, let Nigerians know and let us have a dilaogue on how to get in new resources for development. If 2015 is so bad an experience, with all oil prices getting to rock bottom, 2016 may not be a pleasant year unless we find atlternative funding sources. In appointing officers for the government, scout around the country to find credible Nigerians. Do not be held down by a cabal, no matter how good their intentions appear to be. The latest controversy about the skewed appointments will do your credibility no good. You were elected for all Nigerians and the best you can do is to carry all Nigerians along.

Please, Mr. President, the economy needs your time and attention but your interventions must be grounded on a sound policy sold to all Nigerians. Take action for the economy grow in a manner consistent with social justice and not the proverbial trickle down expectation that never trickles down. I rest my case.

PUNCH