By Omoniyi Salaudeen
Nigeria is now effectively in an election fever that is as infectious to the electorate as it is to the political class.
For all known reasons, barely two months to the February 25, 2023, presidential poll, some state actors are already beginning to catch cold. Likewise, the electorate are also increasingly becoming apprehensive about what the future holds for the country in the face of rising expectations. And rightly so because the next general election is pregnant with a lot of uncertainties.
To be clear, this will be the sixth time power will be changing hands from one government to the other since the beginning of this present democratic dispensation in 1999.
But with the present socio-economic situation in the country, there is a need for a radical departure from the usual electioneering jamboree that hardly comes with any remedy for the hardship the masses of the people have always had to contend with after a new change of guards.
To break loose, the electorate themselves have to be circumspect in the choice they make this time around to avoid the past pitfalls.
In other words, there is clearly a lot of work to do by the next government to rescue the nose-diving economy from further slide. At present, the economy is in a dire strait. Insecurity, oil theft and declining production, hyperinflation occasioned by the dwindling value of the naira, energy crisis, epileptic power supply, and uncertainty in the investment climate, both local and foreign, are some of the limiting factors that have been responsible for the stunted growth the economy has experienced in recent times.
As the World Bank already warned in its latest report, “if Nigeria continues with business-as-usual policies, the country will effectively be choosing a path that will lead to people’s being hindered.”
To stave off the looming danger ahead, it added, “the nation has to make hard choices or face a worse economic downturn in the months and years ahead.”
This implies that Nigerian voters must set aside primordial ethnic and religious sentiments to demand more than rhetoric and mudslinging that have characterized the ongoing electioneering by the leading political parties and their candidates who are angling to take over from the present government.
According to the economic forecast by the world financial institution, Nigeria’s Gross Domestic Product (GDP) growth rate declined from 3.2 per cent to 3.1 per cent in 2022, amid weakening economic performance in the last six months, projecting further that there would be another decline grow to 2.9 per cent in 2023–24, a rate 0.3 percentage lower than the earlier predicted figure in June this year.
To reverse the negative trend, therefore, the Nigerian electorate have to weigh the various options available among the array of contenders with a sharp focus on competence and requisite capacity to manage the economy so that the country can get out of the woods.
During his campaign activities in the 2015 and 2019 general elections, President Muhammadu Buhari promised security, economy, and anti-corruption as the three-pronged agenda of his administration.
But the promises have largely turned out to be a rope of sand. No security, no food, and no dignity for nearly 80 per cent of the populace who are living below the poverty threshold and have had to grapple with their daily sustenance.
This sad narrative has been blamed on the combined effects of the global economic downturn occasioned by the COVID-19 pandemic, the challenge of insecurity, as well as the declining productivity capacity which have severely put pressure on the prices of food items and other essential commodities with the resultant worsening standard of living for the common people.
Under the supervision of the Central Bank of Nigeria (CBN), quite a number of macro-economic policies have been deployed to stabilise the economy, but all to no avail. Instead, food inflation has continued to be on a steady rise. As the latest report shows, the current rate of inflation for this last quarter of the year is 21.47 per cent, the highest in 17 years and one of the highest globally.
Ironically, while there is a significant improvement in the international market price of crude oil which should have ordinarily shored up the performance of the economy, oil theft, falling production, and other institutional challenges have severely constrained the economy, robbing the nation of the immense benefits of the new global trend.
The World Bank summed up the trajectory thus: “The average price of crude oil increased by over 150 per cent from 2020 to 2022, yet Nigeria’s macroeconomic performance has weakened over this time, and its fiscal space has shrunk.
“There are two reasons Nigeria is not benefiting from high global oil prices: First, lower oil production; as a result of high production costs, theft and insecurity, joint-venture cash-call arrears, and inadequate investment, Nigeria’s crude oil output has been falling since 2020 and has consistently been below its Organization of the Petroleum Exporting Countries (OPEC) quota since June 2020.”
The bank, therefore, stressed the need for urgent “steps to restore macroeconomic stability; increasing oil and non-oil revenues; reducing inflation through a sequenced and coordinated mix of trade, monetary and fiscal policies to restore conditions for private investment and growth; removing petrol subsidy; and adopting a single, market-responsive exchange rate.”
The good news here is: “If Nigeria chooses to make reforms that stabilize its macro-fiscal policy settings and support investment, this would be transformative for 80 million poor Nigerians, for Nigeria as a whole, and for Africa.”
But who will bell the cat? Expectedly, there has been a lot of rhetoric about mouth-watering electoral promises from different candidates. Most of these are promissory notes which may not translate into practical reality.
Beyond the rhetoric, some economic experts who spoke to Sunday Sun outlined some drastic measures that needed to be taken to pull back the economy from the doldrums.
An erudite Professor of Economics at Babcock University, Ilisan, Ogun State, and former President of the Nigerian Institute of Bankers, Segun Ajibola, in an interview with Sunday Sun, said: “Unless there is a determined effort by the Federal Government to adopt deliberate measures like import substitution method, urgent resolution of the energy crisis, encouragement of local refineries to produce petroleum products, subsidy removal, as well as other domestic factors causing the high cost of production, the rate of inflation will continue to rise and the standard of living will continue to dwindle.
“We all know what is responsible for the inflation rate in Nigeria. Ours is the cost-push inflation. The cost of raw materials for industries, electricity, and petroleum products is going up. When we look at the price of food items, it is equally on the high side. We still cannot produce enough to feed 200 million people. Because we rely so much on imported items for domestic and industrial use, we are vulnerable to global inflation.”
To get the country out of the woods, he said: “We have to raise the production level of basic items like food so that we rely less on imported food. We have been talking about import substitution for a long time, we can substitute locally produced food items for imported ones to reduce the level of our vulnerability to the foreign exchange market. We have also been talking about the cost of infrastructure, energy in particular, we can work on our capacity to generate power in the country. That will also reduce the average cost of production.
“We talk about petroleum products too which is another major challenge in determining overall the cost of production. If local refineries can work, it will reduce the cost of imported fuels and reduce the overall cost of production. It is a package.
“If we can work on all these domestically, we will be able to address those that are peculiar to our own circumstances. If we can successfully address that, then the pressure won’t be as much. We can then gradually work on the imported inflation in the country.
“If with determination and commitment we can pursue those things that I have earlier highlighted, then we will reduce our vulnerability to externalities – those things that are imposed on us outside the shore of this country.”
A former presidential aspirant on the platform of the African Democratic Congress (ADC) and retired Deputy Governor of the Central Bank of Nigeria (CBN), Prof Kingsley Moghalu, on his own part, slammed politicians for mismanaging the nation’s economy with the resultant crippling inflation.
“There is a difference between the global challenges and the domestic policies fundamentally killing our own economy with our own hands in the service of corruption, vested interest, and incompetent political leaders.
“Between a mismanaged fiscal space and a deeply compromised Central Bank that has sold its soul to politicians and private sector profiteers, the wheels have come off the Nigerian economy.
“The combined fiscal, monetary, and forex calamity superintended by the Federal Ministry of Finance, Budget and Planning, on the one hand, and the leadership of the CBN in the past seven years, on the other, is a tragedy for the Nigerian that could have been avoided. The effects on the lives of the average Nigerian are truly sad to see.
“Let competence govern critical aspects of our national lives. This is why I have argued that the problem is not the absence of competence in economic management in Nigeria. The problem is the absence of competent political leadership. We need a productive economy,” Moghalu posited.
Similarly, a Consultant with the World Bank and former Finance Commissioner in Abia State, Dr. Phillips Ntoh, blamed the current inflationary trend on the inability of the authorities concerned to properly harness the human and material assets with which the nation had been endowed.
According to him, the only way to get the economy out of the woods is by making the economy to be productive as well as value addition to the raw materials being exported.
To achieve this end, Ntoh maintained that there must be the right type of leadership with adequate financial and fiscal knowledge to tackle the current challenges.
The ultimate decision to choose a candidate who fits into this description in the coming election is in the hands of the electorate.
But again, the challenge is that most of the candidates now parading the political space do not have anything refreshing to offer.
They are largely perennial contenders, who had contributed in one way or the other to the current dismal state of the economy.
So, the whole power game is like choosing between the devil and the deep blue sea.