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| How Buhari ruined Nigeria's Economy. Bankrupted 34 States in less than a year despite Fuel Price Hike |
In about one year of Muhammadu Buhari’s misrule, Nigeria dropped from being the largest economy in Africa to who-knows-where, and number one investment destination in Africa to number 13. What a difference one year can make.
Inflation rate that was below 9% when former President Goodluck Jonathan handed over to General Buhari on May 29, 2015 is now at 15.6% under Buhari. In one year, Buhari has taken our inflation rate from single digit to double digits.
Our GDP growth rate was was at 6.95% under Jonathan, now it is -0.36%, the worst in Nigeria’s history. Officially, our GDP is in ‘recession’. If this is not a sign that President Buhari has ruined the economy completely in just one year, what is?
In 2013/14, Nigeria was the 3rd fastest growing economy in the world, now we are 29th in the world. With the country’s current negative GDP of -0.36, Nigeria is set to be kicked out of the top 50 economies of the world in no time.
It is important to note that there are only 4 countries with negative GDP growth in Africa in the last quarter and Nigeria is now one of them.
The notion that President Buhari met an empty treasury when he took over is false because President Jonathan handed over $30 billion in Foreign Reserves, $5 billion in accrued Liquefied Natural Gas dividends, $3 billion in the Excess Crude Account, and around $2.4 billion in the Sovereign Wealth Fund.
Buhari was handed over a budget of about N4.5 trillion passed by Jonathan, few weeks before handover. Around N5.3 trillion was received as oil income in 2015, how was this money squandered by Buhari?
With the landing cost of petrol to the country at N89 per litre given the drop in price of crude oil, the Buhari’s federal government still increased fuel price to N145 per litre. Effectively Buhari is making a profit of N56 per litre of petrol bought by Nigerian. So, why does Buhari keep giving the impression the country is broke?
With this increased revenue from a new income stream, why hasn’t the Buhari government this new income? Why can’t states get more money from the federation account? Why can’t states pay salaries?
There are those blaming governors for their inability to pay salaries after spending one year under Buhari. They are simply naive or uneducated.
The federal government of Nigeria – Abuja – is a quasi colonialist that controls everything from the states, yet it starves the states of their own money. When people say governors go to Abuja to beg for funds, I laugh.
What does Abuja generate? Absolutely NOTHING.
By law, Abuja, doesn’t allow the states to manage their resources, it sits on top of everybody’s resources, yet some blame the states for inability to “generate revenue”. But what does the federal government generate? NOTHING.
All the funds come from the states. So this whole argument that the states are beggars is a big lie.
Only reason why Lagos and Rivers remain viable is because Lagos was a former federal capital and naturally continues to enjoys the benefits of a giant economy. The structures of revenue generation in Lagos were created by the Nigerian State and not Lagos State. Rivers is a similar case.
The reason why many of us criticized Governor Rauf Aregbesola for bankrupting Osun State back then was that the economy was booming under former President Goodluck Jonathan. State’s monthly revenue was far in excess of the wage bill. The states were not being shortchanged as they are now under President Buhari.
The crisis in Osun State was purely that of mismanagement. Osun has no business being bankrupt if not for the financial mismanagement of Governor Aregbesola and the overbearing dividend-bearing godfatherism of APC national leader, Bola Tinubu.
But, today, after one year of General Buhari’s rulership, Nigeria’s economy has been ruined by his bad economic policies, knee-jerk policy reversals, and outdated thinking, and all states are in financial trouble.
Nigerian states are not beggars. They are being colonised by a greedy master. They generate the resources of the nation. But the federal government takes it all and leaves them with nothing.
A Nigerian state cannot explore mineral deposits or construct a deep-sea port. The Nigerian law forbids them from doing so.
Those bystanders who keep repeating that states need to generate income should also remember that states cannot tax their citizens to death. States cannot tax businesses to death. If they do, they risk businesses closing down or a relocation of businesses to tax friendly ones. Both means job losses in the state and doesn’t in anyway achieve the purpose of increasing “internally generated revenue”.
There are some faulty arguments which say that only nine states generate the bulk of the resources shared by from federation account which is then shared between the three arms of the federal government – executive, judiciary, and legislature and the 36 states and federal capital territory is not true.
All states general some revenue, which the federal government swoops on. Some states, however, generate more than others. While the ‘almighty’ Abuja generates nothing.
Why can’t the federal government increase the capacity of a state like Rivers to generate more income?
Those who attack states for “not generating revenue” should be more concerned with pressing the the federal government to generate revenue because the federal government is to one to blame for the states going broke.
This is one reason why diversification of the economy should not just be a talk show but an active policy of the federal government. Shouldn’t the federal government be more interested in improving the capacity of the states to general more revenue because it depends 100% on them?
If the federal government earns N50 billion monthly from Rivers State, then gives Rivers back a measly N5 billion, wouldn’t you think the same federal government should be interested in seeing Rivers increase its revenue to N100 billion monthly? So it can take it all and then Rivers can come “begging” for N10 billion of its own money?
It is also curious to note that since President Buhari took office, transparency has been thrown out the window, state allocations continue to decline even with the fuel price increase and removal of subsidy, increase in taxes, and reports of recovery of looted funds.
The federal government needs to stop the current structure of “sharing all the money”. The government should invest in the capacity of states to generate more income.
The revenue sharing formula is also faulty. It robs the states and local governments, who have the bulk of the government responsibility to the people and gives a lion share, 50%, of the government revenue to the federal government. That, in itself, is injustice to the Nigerian people.
The time to think and act is now.
-Deji Adeyanju is director of Social Media of the People’s Democratic Party. He is also a former aide at the Presidency. He tweets from @adeyanjudeji.
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