Apr 20, 2016
RIGHT OF REPLY: RE: “BUHARI’S IRRITABLE ’16 YEARS OF WASTE’ MANTRA”
If you tell the truth you do not need a good memory – Mark Twain
I actually debated whether or not to respond to Yemi Adebowale’s piece on “Buhari’s Irritable ’16 Years of Waste’ Mantra’. To start with, I was taken aback to see a malapropism sitting comfortably in the headline of an opinion piece in a major national newspaper. Surely, the writer meant ‘irritating’ and not ‘irritable’ which means easily irritated or annoyed and is more often used to describe the state of a bladder or bowel.
My irritation was further increased by a close reading of the article which turned out to be a patchwork quilt of prejudice, error and ignorance. My instinctive feeling was that a response to the article would require a point by point rebuttal and that I might be lured unwittingly into writing a similarly unstructured piece. Let me state at the onset that although I am not a member of the APC or indeed in government, I am an avid supporter of the Buhari Administration not least because of the sincerity of the leadership and their well stated ideas and intentions for national revival which resonate very strongly with me. This is perhaps the reason for my taking the time to write lest some other positive minded, well-meaning people are misled by the tone and intent of Adebowale’s article.
In this response, I will address the most egregious and fallacious assertions in the aforementioned essay, demonstrate Adebowale’s poor grasp of basic economics and public policy, and try to untangle several instances of illogical analysis. The natural starting point is the statement of the President which attracted such ire. He quoted President Buhari as saying “in the past 16 years, we made a lot of money without planning for the rainy day. We showed a lot of indiscipline in managing our economy and that is why we are where we are today.”
This is actually a statement of fact which is now easily demonstrated by the recent admission of Dr. Ngozi Okonjo Iweala that the last government lacked the will to save for the rainy day. One is not so much concerned about who she was holding responsible for this state of affairs but rather the fact that the Coordinating Minister of the Economy and Minister of Finance of the last PDP government has corroborated the point that President Buhari was making.
Even if Mrs Okonjo-Iweala had not spoken in the short intervening period between the time of Adebowale’s missive and the writing of this essay, there is abundant evidence to show that the President was speaking the truth. If not what the Yoruba call ‘apa’ (wastrel) how else does one explain a situation in which Nigeria had $62bn in foreign exchange reserves at a time when oil prices were at about $50 per barrel and then this figure fell to $32bn after oil prices had reached dizzying heights of $140 per barrel? In case Adebowale does not know, export revenue from oil increased from $56bn in 2009 to $95bn in 2013 yet our reserves had fallen to $32 billion by the time the last PDP administration was leaving office in early 2015, barely one year after such huge export earnings.
In any case, if Adebowale is pretending, let him be reminded that fuel pricing and its associated scarcity has been with us in this country for quite a while. Adebowale did not deem it fit to blame PDP led government under whose watch oil prices went historically North but failed to build refineries to meet up with local consumption of widely consumed petroleum products.
The claim that Boko Haram had been largely confined to Sambisa by May 2015 is a ludicrous attempt to deny this government credit for its achievements in the area of security. All Nigerians, who are not blinkered by inexplicable prejudice, know that it was the commitment of the APC government that restored the morale of our fighting forces in the North East by giving them good leadership and required weaponry. A cursory look at the Internet will reveal that this time last year Boko Haram was in control of 20 out of the 27 Local Governments in Borno State alone and now they control none of the 774 Local Governments in the country. The proof is in fact is not necessarily what the military authorities or the Governor of that State are telling us but rather the visible resumption of schooling and economic activities that had hitherto been disrupted by terrorist attacks.
Adebowale’s assertion that the last Government raised billions of dollars in the Sovereign Wealth Fund which the Governors squandered is laughable. Adebowale should reach out to Dr. Okonjo-Iweala and she will probably explain to him that Governors had no access to the SWF which has not ever really risen above $1.75 billion. And this is perhaps a good place to point out that at the time of writing Nigerians still do not know the outcome of efforts to trace huge unexplained withdrawals from the Excess Crude Account during the past administration. It is also quite shameless for Adebowale to even mention earnings from LNG. It was the Buhari Administration that let Nigerians know that the country was making earnings from LNG. Dividends paid by Nigeria LNG prior to Buhari coming to office are still unaccounted for.
Let us now address economic illiteracy. Any Part 1 student of Statistics would tell us that a GDP rebasing exercise does not ascribe economic growth to a particular government but it is rather a move to a more recent base year to reflect changes in the economy over time such as new sectors, new technologies and new products. If Adebowale has been keeping tabs on international economic developments, he would understand that several scholars and researchers have been commissioned to study if high GDP actually translates to reducing inequality and lifting people out of poverty. However, I would like to remind Adewale that yes, we have got the highest GDP in Africa, yet we have one of the lowest GDP per capita on the continent.
Most readers would agree that the economic performance of South Korea, Vietnam, and Indonesia has been stellar over the past thirty to fifty years. They would perhaps not know that South Korea grew its GDP per capita from about 1100 US dollars in 1960 to about 24,500 in 2014. Yet its currency the Korean Won depreciated over the period. In 1960, one US dollar exchanged for about 63 Won. Today one US dollar exchanges for almost 1200 Won. Thus as South Korea developed its economy and grew its exports its currency has also weakened consistently.
There are several other examples. The Vietnamese Dong trades at 22300 per US dollar today from about One Dong per US dollar in 1983 and Vietnam still managed to grow at an average of 6.5% per year over the period. The Indonesian Rupiah trades at 11,800 per US dollar today from about 600 Rupiah per US dollar in 1980 and Indonesia also still managed to grow at an average of 7% per year over the period. The reality is that many successful countries use competitive exchange rates to boost their economic prospects.
Undoubtedly, one of the main constraints that our manufacturing sector faces is poor electricity supply, so let us examine Adebowale’s insights on this matter. Here again one cannot fail to be disappointed by his sloppy reasoning and use of facts. Even the Jonathan Administration cannot claim that it left power generation at 5000MW, a historic peak reached only in February 2016.
Since I personally believe that the process of development and structural change is a marathon and not a sprint, I really do not want to fall into a puerile discussion about achievements in less than one year. Anything that is not built on solid foundations will collapse when the storm comes. In responding to Adebowale, I have already spoken to the security gains by this administration as well as the on-going onslaught on corruption, so all that is left is to highlight some economic gains, stressing again that strong foundations are essential to eventual success.
In the economic arena, this government has restored transparency in the management of the Federation Account. Thus, revenue that was previously hidden away or accounted for is now available to the monthly meeting of the National Economic Council. So now we know that Nigeria had already started earning money from its natural gas exports. Similarly, it has also ensured the successful take-off of the Treasury Single Account which enables better management of inflows and outflows of resources under the purview of the Federal Government.
In less than one year, we are all living witnesses to the bailout of State Governments so that they could pay staff salaries. Although the problem is still not fully resolved, it meant that public servants were able to receive payment of arrears of salary which had mounted before May 2015. The active collaboration of Federal and State Governments in seeking long-term solutions to the national economic malaise as demonstrated by the March 2016 Retreat of the National Economic Council is yet another achievement. Prior to this, despite the dominance of PDP controlled States the relationship between the centre and component units was characterised by tension and lack of trust.
Given my personal preference for careful and meticulous planning, I consider the articulation of the 2016 budget proposals and the accompanying strategic implementation plan as a great achievement. Overcoming years of lethargy and committing 30% of revenues to capital projects is an achievement. Thinking out of the box and opting for stimulus over austerity is an achievement. Articulating a comprehensive social investment programme including conditional cash transfers, a federally backed locally-sourced school feeding programme, and even just planning to create 870,000 direct and indirect jobs is an achievement. The Buhari Administration has achieved a change in our thinking about the poor, vulnerable and unemployed after years of pandering only to the interests of corrupt and vested interests.
In ending, let me say that everyone is entitled to their views in a free and democratic society but it is essential in doing so that we do not distort facts or make an attempt to blot out history. This admonition holds true for those who have the privilege of communicating directly with the wider public through the news media. It remains true in this case.
Public Affairs Analyst