Dele Sobowale explores the economic realities of Nigeria and why President Muhammadu Buhari, a former military dictator is realising that the laws of economics don’t respect who is in power.
“The president cannot make clouds to rain, he cannot make the corn grow, he cannot make business to be good”, President William Taft, 1857-1930. (Vanguard Book of Quotations).
Taft was American President from 1909 to 1913; meaning he served only one term during which the US economy was in a recession. He paid the price for coming to power at the wrong time. Taft was not the first, and he would not be the last president, to learn the age-long lesson that economics, like rain, sun or earthquakes etc, respects no president’s wishes.
When Karl Marx, 1818-1883, pronounced that “Men make history, but not just as they please”, he must have had leaders like Muhammadu Buhari in mind.
Nigerians were aware that Buhari, until he went to London for “God-knows-what”, was adamantly opposed to the devaluation of the naira for reasons that were badly explained because he is not an economist. He returned just in time for the governor of the Central Bank of Nigeria, CBN, to announce a new foreign exchange policy which effectively devalued the naira. And the President had been silent ever since.
The old General had finally met a force mightier than all Heads of State put together. The obvious question is why?
However, before answering that question, it is pertinent to point out that all those who had supported Buhari is his obstinate opposition to devaluation had also surrendered; just as they retreated when fuel price went up to N145 per litre despite threatening fire and brimstone if it did.
Buhari would be best advised to select the people whose views he takes seriously. A vice president of the US had made the observation that “The right to be heard does not automatically include the right to be taken seriously.” (Hubert Humphrey, 1911-1978).
For too long our president listened to people who should not be taken seriously. The country has paid a heavy price for the delay and it will pay a lot more. Delay in providing economic remedies is always dangerous. Presently, we should examine the consequences of delay.
Why, then, did Buhari meekly surrender to the CBN? It is totally out of character. But, the reason is not hard to discover. Our president was shown, among other things, the rapid decline of our external reserves and the inevitability of more erosion unless he reversed himself. If not, the external reserves might reach such a critical stage that Nigerians would experience the return of “Essential Commodities” and the hardships associated with it during Buhari’s first term as Head of State – despite being a military regime.
Back in 1984-5 Buhari’s government could not decree provision of sufficient milk (even infant milk), detergents, sardines etc. Housewives had to struggle when army trucks came to supply OMO, sugar, Geisha etc, at control price, and get whipped mercilessly by soldiers. Somebody must have told the president that unless he relinquished his stubborn opposition to devaluation (which fuel price increase had partly accomplished anyway) , he would live to see ugly history repeating itself during his second tour of duty.
It is also quite possible that somebody, who had access to Buhari, must have pointed out to him the Chinese proverb saying “Nobody steps into the same river twice”. The Nigerians he and Idiagbon bullied successfully in 1984-5 are related to Nigerians today in name only. Then armed civilians could not be up to ten thousand.
Today, over six million small fire arms are in private hands in West Africa – with the bulk in Nigeria. The Nigerian civilians of 2016 can no longer be pushed around by the military as they please. Buhari must deliver on the economy as well as other promises or suffer the consequences.
Policies and programmes that are not grounded in good economics will imperil his government. At any rate, while it might be possible to bully some of the people some of the time, he can’t bully reality.
One reality lurking in the background and which cannot be scared is famine and food scarcity in 2016 and early 2017. With poor rainfall in the country, farmers are devastated everywhere. The harvests will be poor and we will need food imports if catastrophe is to be avoided.
Neither Taft nor Buhari can make rain to fall or corn to grow, but, unlike early 20th century, in the 21st century, presidents better know when crops will fail and plan ahead for intervention food imports before food riots erupt.
If the erosion of external reserves had not been halted, there would have been no money to import the food needed later in the year and early 2017. For this reason, he might need to swallow more devaluation than he intended or would like to occur. This warning had become necessary because his former supporters will soon start to point to high inflation as justification for their opposition to devaluation. The fact is, given our situation, inflation is inevitable. We either suffer it now or experience worse later when the external reserves might have been depleted further.
It is like a driver slamming on the breaks before a vehicle out of control crashes into a wall. The damage is less.
Finally, the writer of Undertow in the The Nation on Saturday, June 25, 2016, remarked that “the president had responded [to journalists interviewing him] …that most of the time, the economists spoke above his head when they explained why the economy was experiencing turbulence”. Pity and the fault does not lie with Buhari alone. It is collective.
In the last elections, we were confronted with a choice between “corruption incorporated”, as represented by the PDP, and a candidate weak in understanding economic principles in a world where no leading nation can afford such a leader. We are being visited by consequences of that limited choice.