ONE YEAR OF BUHARINOMICS: AS NIGERIANS FACE ECONOMIC HARDSHIPS!
ONE YEAR OF BUHARINOMICS: AS NIGERIANS FACE ECONOMIC HARDSHIPS!
BY:
Nurudeen Dauda
April15, 2016
nurudeendauda24@gmail.com
nurudeendauda24@yahoo.com
nurudeendauda.blogspot.com
“with the fall in price of crude oil to below $40 per barrel, governments of the 36 states would have been in serious trouble if not for the financial prudence of president Muhammadu Buhari”-Governor Kasheem Shettima(Daily Trust: March 29 ,2016:P.8)
“When the price of crude oil was over $100 per barrel, Borno state was receiving around N4.5billion per month. Today, oil price has fallen to less than$40. Ordinarily, states like Borno should have received 20% of what we were receiving when oil was over 100 dollars. This month, we received N2.6billion at a time oil is below $40 and this is more than 50% of what we were receiving at a time oil was over 100 dollars. Our salary wage is N2.6billion but we still have to be grateful to president Buhari because “Wallahi” if not for his financial discipline, all of us here would be in soup by now.”- Governor Kasheem Shettima (Daily Trust: March 29, 2016:P.8).
It is an undeniable fact that crude oil which is sole reason for our relative economic stability was sold at above $100 per barrel from 2010 to June, 2014.On the other hand, the price of crude from May, last year has become as low as $27 per barrel. What have we achieve with that and save for rainy days? Yes there was “jobless” economic growth of 6% in the previous years simply because of high prices of crude oil. Our economic managers in the immediate past were like “A Bull in a China’s shop”. Throughout that period we remain a “mono-culture” economy as well as highly “import independent” economy. Indeed “the chickens have finally come home to roost”!
Former Minister of Finance Dr Ngozi Okonjo- Iweala on the 14th of April,2016 in George Washington University while speaking on “Inequality, growth and resilience said: “World Bank and International Monetary Fund (IMF) must seek means to embed savings in national constitutions devoid of political manipulation. She said “Nigeria was able to save $22billon under Former President Olusegun Obasanjo, which saved the country in 2008/2009, from global economic meltdown. We saved $22billion because the political will to do it was there” She added that: “And when the 2008/2009 crisis came, we were able to draw on those savings precisely to issue about a 5 per cent of GDP fiscal to stimulus to the economy and we never had to come the bank or the fund. This time around and this is the key now, you need not only to have the instrument but you also need the political will.
In my second time as a Finance Minister, from 2011 to 2015, we had the means, we had done it before but zero political will. So we were not able to save when we should have. That is why you find that Nigeria is now in the situation it is in. Along with so many other countries” (Leadership Friday: April 15, 2016).
She however, said: “her former boss Former President Goodluck Jonathan was not interested in saving Nigeria’s huge earnings from oil and other sources between 2011 and 2015.The absence of political will to save under Former President Goodluck Jonathan is responsible for the hardship facing the country currently”(Leadership Friday :April 15,2016). Dr. Ngozi’s confession has confirmed by my insinuation that the precious government ran the economy like a “Bull in a China’s Shop”
Nigerians had suffered and are still suffering due to years of neglect by successive governments! We must discuss our past as against what some Nigerians would want us not to! The government of the day must also make deliberate efforts to get us out of the mess. Nigerians must understand that there is no “Magic bullet” or “quick fix” to our problems. We didn’t get to this stage overnight! As for the “law of nature” it takes time to revive than to destroy. Neither did I vote for a perfect president nor a magician! We must be patience enough!
The first part of human being is to know where you are coming from! It is an undeniable fact that crude oil was sold at above $100 per barrel from 2010 to June, 2014. In 2011 we budgeted N4.2trillion, with crude oil benchmark of $62 per barrel with daily crude production of over 2.2 million barrel when the real market price was above $100. Where is over $38 of 2.2 million barrel for 365 days of that year? In 2012 we budgeted N4.74trillion, with benchmark of $67 per barrel with daily crude production of over 2.2 million barrel when the real market price was above $100. Where is over $33 of 2.2 million barrel for 365 days of that year? In 2013 we budgeted N4.92trillion, with benchmark of $79 per barrel with daily crude production of over 2.2 million barrel when the real market price was above $100. Where is over $21 of 2.2 million barrel for 365 days of that year? In 2014 we budgeted N4.6trillion, with benchmark of $76 per barrel with daily crude production of over 2.2 million barrel when the real market price was above $100. Where is over $24 of 2.2 million barrel for 365 days of that year?
President Obasanjo in 2004 brought the idea of excess crude account. The account gets funded from the difference between the actual crude oil selling price and the benchmark which is usually below the market price. “…The last time the minister of finance Okonjo-Iweala and the Co-coordinating Minister for the Economy, reported to the council, and it is in the minutes, she reported by November 2014, that we had $4.1 billion. But today the Accountant General‘s Office reported we have$2.0billion, which means the Hourable Minister spent $2.1bilion without authority of the NEC” (Vanguard, June 30, 2015).
“…from 2004 until last year, except for brief reversal in 2008/9, global crude prices had exceeded the benchmark. Simultaneously, output and exports have been close to or exceeded budget estimates. That explained why Obasanjo’s government left over $40bn in the account for the Yar’Adua administration…”(Sunday Vanguard, July 5,2015).
“…it is fait to declare that once upon a time the Excess Crude Account had balances over $45billion; today, the politicians and Dr Okonjo-Iweala are at daggers drawn over how $2.1billion vanished between December 2014 and now. To more serious observers, they are like people trying to find out how only two cows are left in the barnyard out of 45 in 2008.” (Sunday Vanguard, July 5, 2015).
“…a President who inherits over $45billion in ECA in and leaves behind only $2.09billion in 2015 cannot by any stretch of sane peoples’ imagination be judged to have done well…”(Sunday Vanguard, July 5,2015).
May God bless Nigeria!