2021 in retrospect: Nigeria’s economic governance slumped under Buhari

As the year 2021 comes to an end, President Muhammadu Buhari-led Federal Government does not appear to be earning many accolades over its handling of the economy.

Looking at economic indicators like inflation rate, unemployment, insecurity, and cost of living, there are pointers that the Buhari government failed in the country’s economic governance.

The Lead Director of the Centre for Social Justice, CSJ, and a Financial Expert, Eze Onyekpere, said there was no economic governance in Nigeria in 2021.

He blamed this on Buhari’s inability to appoint capable hands to manage the country’s economy.

Speaking with DAILY POST, Onyekpere spoke on micro-economic indicators and how they affected the economy in the outgoing year.

Inflation

Onyekpere lamented that Nigeria experienced a high inflation rate in the outgoing year.

He said: “First of all, we had a year where the inflation rate was double-digit and up till now, it’s still 14-15 percent. And you have a situation where if you go to the bank to source money, it’s something else. Yesterday I was at Fidelity Bank; I saw their 365 savings rate at 3.50 while the interest rate in terms of premium lending is at 19.

“So, in essence, the inflation average is 17 percent, if you save money you will get only 3.5 percent, so you are losing not less than 13 to 14 percent of your money if you put it in the bank. So, that is the first thing to tell you that something is fundamentally wrong.”

The financial expert also noted that inflation had an adverse impact on the pricing of foodstuffs.

Onyekpere said: “If food inflation is a key driver, the prices of foods like rice, oil, meat, fish, Garri has more than doubled within the year; you know what a bag of rice sells now as to what it used to sell before. This has affected the poorest of the poor in Nigeria who can no longer afford to feed themselves.

“Instead of complaining, the government should redeem itself by improving security so that people can feed themselves, because the right to food is the right to work, to an adequate standard of living where you can pay your bills and still be able to take care of yourself, to have a secured environment so that you can work.”

Unemployment

He said: “We witnessed an economic scenario where the unemployment rate was in excess of 13.3 million, 33.3 percent. And for the year, the critical sector of the economy that contributes the most was in excess of 50 percent, so the most productive part of the economy had no jobs and there was no hope for them.”

Interest Rate

The lawyer cum fiscal governance expert insisted that the country’s interest rate in the outgoing year was very poor.

He said: “If you look at the interest rate, it’s very poor, we are at the premium rate, but that does not mean that it’s the rate you get when trying to borrow. To borrow, the interest is around 20 to 30 percent. And at the end of the day, there is no incentive for the financial institutions and banks to mediate which would create capital for people who will now create jobs.

“On like other economies in the western world were they have a single-digit rate, here we are talking of 20 to 30 something percent; if you put your money in the bank and want to borrow you may not be able to pay the interest rate and survive to incur other cost to improve your productivity in the economy.

“Also looking at other indicators, there are several closure of factories, and to compound the issue, Insecurity has also affected primary production, particularly Agriculture. If you look at the higher drivers of prices was inflation; and this was because people could not go to their farms in the Northern part and MiddleBelt areas of the country because the government took side with killers against the fundamental rights of Nigerians who had the right to life. So, nobody is protecting them; people are asked to pay to access their farms to plant and harvest.

“The right to life now looks pedestrian; life doesn’t seem to be worth anything, so the normal farming in the rural communities could not be carried out. What this shows you is that the government has failed, there is total government collapse, there is no Federal Government, some people are pretending to be the President but they are doing nothing. They have failed in the duty of the state to protect life and properties, to keep the micro-economic indicators at a stable rate. The truth is that there is no government in place, and the question now is how to get a government in place, because there was no economic policy that was made or implemented in the interest of Nigerians.

Failure of Economic Governance

He stressed that Nigeria’s economic governance totally collapsed in 2021, largely due to the persistent foreign loans.

Onyekpere added: “There was a complete collapse of economic governance. Governance is not about borrowing money; people who have no idea of governance are in power claiming to know. Since they were elected, what did they bring on board other than to borrow money to pay salaries? There is really no government in place; if there was a government in place, how come the only idea they have is to borrow money to pay salaries? Payback debt? You are using over 70 percent of all the money made to pay back debt, I’m sorry, but we were on auto-pilot.”

COVID-19 and Recession

He pointed out that contrary to claims that COVID-19 led to Nigeria’s recession, Buhari’s ministers mismanaged the economy in 2021.

Onyekpere said the ministers in charge of the country’s economy lacked the capacity and ideas to occupy their position.

“COVID-19 can be a perfect excuse; recall that the economy collapsed and there was a recession before COVID-19. The second recession was said to be COVID-19 induced; did we recover well? Did we have over two percent of 2.2 percent growth before the COVID-19 returned? Yet some people are claiming to be the minister of Finance, Minister of this and that, but were not up to speed, they had no idea of what to do. They had no intellectual capacity, extreme vacuity, people who didn’t know what to do, but they were busy occupying space. What have they brought to the table? Why did the economy collapse into recession immediately when they took over power? Why did we have a second recession? At least, if you have a functional economy, when you fall, you fall a little bit behind, but when you are down, and you fall, it’s like digging the earth to put yourself into.

“Economic governance is gone to the dogs; as we speak, they are still proposing to borrow money without any apologies. And the Senate keeps approving these monies; we don’t even have a legislature to call the executive to order. What we have is a rubber-stamp legislature. What is going on is that some people are just claiming to be members of the executive and are just claiming money and putting it in their pocket,” he added.

INSECURITY

He said: “Insecurity was one of the major drivers of the economy’s underperformance; people can no longer secure their lives without looking over their shoulders. How do you expect them to perform? When your life is threatened, how do you expect them to perform? Your productivity can’t be at an optimum level. Until your life is preserved, you can’t think of optimum performance; you can’t perform at 50 percent of your capacity.

“So, this has grossly drawn Nigeria back, and I blame it on the table of President Muhammadu Buhari; he has incompetently, as a retired general, President and Commander-in-Chief, done nothing but blame others. He has refused to come to terms with the task of governance.”