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OPINION :Economic Codification, Recession and the Nigerian Economy



Charles Chukwuma Soludo is University of Nigeria, Nsukka’s gift to Nigeria. Soludo is one of our country’s leading economist, who has contributed immensely to the policy of the country since Obasanjo’s presidency till date. Therefore, I’m usually amused when people give all the accolades for the reforms during Obasanjo and Jonathan’s presidency to the former minister of finance, Ngozi Okonjo-Iweala. For those who don’t know, our reform programmes throughout Obasanjo’s second term, which came to be known as the National Empowerment and Development Strategy( NEEDS) that recorded the fastest rates of growth in the country from 2003 to 2007 was Soludo’s brainchild.This does not mean that other members of the team during that period do not deserve credit for their contributions.They do.

As the Governor of Kaduna State, Nasir Ahmad El Rufai, a former prominent member of the team acknowledges in his book, Accidental Public Servant, “the galloping oil prices, which reached historical highs” contributed significantly to our economic growth during that period. Furthermore, he attests to the fact that Soludo’s contribution to the team was not only enormous, but sensational. Another revelation from the book that would shock a lot of people is the squabble between Ngozi Iweala and Charles Soludo over the former getting the spotlight for the job the latter did behind the scene. According to him, the quarrel ended in Soludo being appointed Governor of the Central Bank. Anyone interested in the Harvard vs. Nsukka melodramatic saga, the way I love to refer to it should grab a copy of the book. The details are not only smoky, but entertaining.

This background was necessary for two reasons. First, Soludo is a member of President Buhari’s Economic Advisory Council, So, our economy is still in capable hands contrary to what is making the rounds on social media that President Buhari’s economic team is not good enough. Second, oil prices play a significant role with regard to how the pendulum of the country’s economic fortune swings. When oil prices are high, our economy would blossom and economic activities in the country would increase tremendously. When we experience such windfall, like we did under President Jonathan, our leaders tend to ignore other sectors of the economy like agriculture, manufacturing and the development of critical infrastructure and concentrate more on importing everything money can buy.

If we may recall, during that period the former finance minister, Ngozi Iweala insisted we should save for the rainy day. But the Governors won’t have any of that sort of advice. In line with the then ruling party, the PDP’s philosophy, “Share the money!”They shared the windfall from oil prices, which was between $100 and $110 dollars per barrel for the better part of Jonathan’s presidency. They didn’t save money, they didn’t diversify the economy and they didn’t complete any critical infrastructure: roads, railways, airports, second Niger Bridge, refineries and so on. So, how did they spend the money? I would give just two instances that I find intriguing and compelling. First, the former minister of petroleum, Deizani Alison Madueke, who is now a fugitive in London used to charter a flight to the United States to attend party on Friday and return on Monday to resume work. Second, some Governors were doing monthly contribution of 1 billion naira (popularly called Osusu) instead of building the infrastructure in their respective states. There are more damaging shenanigans, but that’s story for another day. However, it would be unfair if I don’t mention that a huge part of the money was kept for the 2015 general election.

But unfortunately, when the rainy day came, President Jonathan was no longer in power. However, the storm had started gathering after he lost the 2015 presidential election. Conversely, when oil prices begin to decline like aeroplane dropping from the sky, the economy contracts since it is built on oil revenue. The decline in oil prices impact negatively on our foreign exchange earnings. When that happens importation of all kinds of goods and consumer spending power decreases. Automatically, that triggers a decrease in economic activities leading to inflation and unemployment. In economic jargon, the decline in economic activities over a period of time is called recession. This was how we got into the first recession under President Buhari. I wonder if those who troll President Buhari on social media because of the recession are sufficiently informed about the basics of our economy?

Nonetheless, the economic team provided sound economic prescriptions that got us out of the recession in record time such as Treasury Single Account, TSA, the CBN intervention programmes in the agricultural sector, textile industry, manufacturing industry and the SMEs. Others include adjustment in microeconomic and macroeconomic variables to ginger economic activities.The returned Sani Abacha’s loot also contributed significantly in getting us out of the recession. That was the bailout funds the federal government gave to state governments to pay salary and pension arrears to their workers. But even as we speak, many state governors are yet to pay up pension arrears of their retired civil servants, which could have stimulated the economy a great deal. This led to public demonstrations in states like Akwa Ibom and Cross River a few months ago.

But unfortunately, just when we thought we had overcome the recession, the COVID-19 pandemics struck causing economic codification. The total lockdown of the world economy to combat the lethal virus that was becoming far more deadly than public health experts and the WHO had anticipated. The lockdown impacted all facets of human lives globally. But the economy took the greatest hit. Oil prices plummeted to a an all time low in the history of the industry. Oil became cheaper than MacDonald. A barrel of oil at its lowest price sold at about $4 dollars. Even at that no one was ready to buy.

Governments all over the world had to put their economy on ventilators to cushion the devastating uppercut of the coronavirus reminiscent of Mike Tyson or the Nigerian nightmare, Samuel Peters, the police officer who later became world heavyweight boxing champion. Evidently, similar kinds of economic therapy were applied globally to keep the economy afloat: massive bailout to the private sectors, massive investment and spending in the critical sectors of the economy to create jobs and reduce unemployment and direct cash transfer and palliatives to the vulnerable in the society. But unconscionably, that didn’t prevent the economy from sliding into recession when the lockdown was lifted after 3 to 5 months in most countries. Thus, economically speaking, the global economy is in recession. And the developing economies are the worse hit, since they are dependent economies. That is how our country got into the second recession. In our case, the COVID-19 induced recession, unfortunately got accentuated by the ENDSARS protest.

This is what those intellectualizing their ignorance on social media with regards to the recession may not know or may know but choose to be mischievous since they do not like President Buhari for whatever reasons. At the moment, China is the only country that’s currently not in recession because it was the first to lockdown her economy. And the first to unlock while the rest of the world were in a lockdown. Undoubtedly, our second recession was inevitable with the collapse of oil prices in the International market. That is why those knowledgeable about oil prices and our economy don’t blame President Buhari for the two recessions we have experienced back-to-back. Therefore, before you make side comments about our economy from your comfort zone make sure you’re more knowledgeable than Charles Soludo, Doyin Salami, Godwin Emefiele, Rawane Bismarck and others who are managing our economy. Otherwise zip it, if you don’t have something constructive to say. Stop spreading or sharing misinformation on social media about the economy.

That notwithstanding, here is the good you might not find on social media, the second recession is not as bad as the first one. This is why economic experts are optimistic that with the rising oil prices ($51 per barrel), which is above the 2021 budgetary benchmark coupled with the intervention programmes of the government in every sector of our economy, we should exit recession by the second quarter of next year, everything being equal. However, our romance with recession would resurface in the nearest future if we don’t diversify our economy and also find ways of mainstreaming the informal sector into the economy.

Felix Akpan PhD


2023: Why Nigerians are bashing FFK over endorsement of Yahaya Bello’s presidential bid



2023: Why Nigerians are bashing FFK over endorsement of Yahaya Bello's presidential bid

Former Aviation Minister, Femi Fani Kayode, is no doubt a newsmaker. His recent tweet endorsing the presidential ambition of Governor Yahaya Bello of Kogi State is creating a storm of sorts.

His tweet reads:

“The idea that Gov. Yahaya Bello should not run for the Presidency & that the NC zone, which has never produced a democratically elected President, ought to settle for another position is absurd. Nigeria needs strong & decisive leadership, a generational change & a bridge-builder.”

FFK’s twitter post follows an earlier statement from a support group within the ruling All Progressives Congress APC has asking Governor Yahaya Bello of Kogi State to drop his presidential ambition and support calls to zone the national chairmanship of the party to the North Central geopolitical zone.

The former Minister’s Twitter post has continued to generate a hail of harsh criticism as Nigerians recall that only three years ago, FFK had reacted to Bello’s open pledge of loyalty to President Muhammadu Buhari by saying that the mental faculties of the Governor of Kogi State are not functional.

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Why Gov El Rufai Insists that Bandits must be wiped out, not negotiated with



Why Gov El Rufai Insists that Bandits must be wiped out not negotiated with

Governor Nasir El-Rufai of Kaduna State has said again expressed his zero tolerance for bandits terrorising Nigeria.

Speaking during a town hall meeting on national security organised by the Ministry of Information and Culture held in Kaduna, with theme, “Setting Benchmark for Enhanced and National Unity in Nigeria”, Governor El Rufai stated that bandits have lost their rights to life under the constitution and must be wiped out. He also said a situation where security agencies only responded to incidents of banditry was unacceptable.

El Rufai said:  “The bandits are at war with Nigeria and there is no other way to approach the current insurgency but for security forces to take the war to the bandits and recover forests where they are occupying.

“The security agencies mostly react to cases of banditry and abduction, we are in a war with these terrorist challenging the sovereignty of the Nigerian state.

“Our security forces must collaborate to take the war to the bandits and terrorist, recover and restore the forest to enable our law-abiding citizens to engage in legitimate farming and livestock production,’’ .

El-Rufai stated that no one in a position of responsibility could deny the need for sustained action against criminals, adding that security operations that were more proactive would cripple the outlaws and reassure ordinary citizens.

He said government must identify and deal with non state-actors and others challenging the existence of the country. The governor advised that security forces should be increased and be well equipped to deal with insurgency, adding that judiciary must also be decentralised to serve justice.

“To address the banditry problem, we must implement the National Livestock Transformation Plan, NLTP, already produced four years ago to enable accelerated investment in modern animal husbandry on operating rapid decentralization of herders in known locations,” he said.

Governor El-Rufai also stressed the need for security agencies to be proactive in the fight against banditry and other violent crime, saying a situation where they only responded to incidents of banditry was unacceptable.

He said security agencies must collaborate and take the fight to bandits and kidnappers because the country was at war with them. “The situation in which the security agencies mostly only react to cases of banditry and abduction is unacceptable.

“We are in a war with these terrorists who are challenging the sovereignty and monopoly of the instruments of coercion of the Nigerian state and its territory.

“Our security forces must collaborate to take the war to them, recover and restore the un-governed forests these terrorists occupy, and enable our law-abiding citizens to engage in their legitimate pursuits,’’ the governor said.

He reiterated his position that bandits must be “wiped out” because they had lost their right to life, by virtue of the constitution.

He said: “These bandits have lost their right to life under our constitution and must be wiped out in their entirety. There is no other way to approach the current insurgency situation today as far as governmental action is concerned.’’

According to him, the country has found itself in near-anarchy because there are too many carrots without sticks.

“Notions of a common humanity, not to talk of a common citizenship are not as widely or deeply shared as it would appear. Identity politics holds sway. This reflects the absence of an elite consensus about who we are and how we should live together,” he said.

The governor said more responsibilities should be given to states so that the federal government would not blamed for everything that goes wrong.

“Centralised policing in a federation is not only a contradiction in terms.  The state governments today bear most of the burden of the running costs of the federal police anyway, so why not the sub-nationals of the state police now. So I repeat my persistent call for state police as soon as possible.

“To address the banditry prevalent in the north-west and north-central, we must implement the national livestock transformation plan already produced four years ago,’’ Governor El-Rufai said.

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