By Akachidike Kanu
Nigerians are currently experiencing tough economic times. The prevailing economic climate in Nigeria and the effect on the people have become a thing of serious concern to the nation´s policy makers, economics experts and other stakeholders including the “common man” or the ordinary citizen who invariably bears the full brunt of the situation. Everyone seems to be eager for solutions to the challenges. Unfortunately answers to questions of economic issues are often laced in technical lingo and buzzwords that make it even more difficult for non-experts to grasp.
Invariably, times like this also provide opportunity for exposure and self-development in the concepts and principles of economics, in particular macroeconomics as it affects everyone. Personally, I have been a lifelong student of economics, chiefly by self-development and moreover since I did not have the opportunity to study or learn the subject in secondary school due to lack of a teacher (not even an NYSC teacher!) in my village school then. Consequently it became essential for me to seize every opportunity available to fill the gap due to my early education experience. So it appears that one should know something about an overarching social science and the pertinent policies of government that invariably impact on all of us.
From the early days of the government of President Muhammadu Buhari, some economics experts including Professor Chukwuma Soludo had coined and begun to use the word “Buharinomics”, to describe their expectations of the government´s economic policy. Of course the use of such neologism as “Abenomics” or “Reganomics”, for example, to refer to the economic policies of Prime Minister Shinzo Abe of Japan or President Ronald Regan of USA respectively is not new. However unlike with these instances there is yet no simple and clear definition or description of “Buharinomics”. Also, Buhari Administration has yet to own, much less to identify with this portmanteau of Buhari and economics. So the public impression is that Buharinomics is a mere expression of the concerned experts in their intellectual adventure into the policy space of the government; as it is not yet anything as clear and realistic as “Abenomics” is to the average Japanese, for example?
Nearly ever since the government released and approved its 2016 national budget, public discourse and expert opinions have been dominated by the unfortunate and embarrassing issue of “budget padding”, more than anything else about the document. Other times government spokespersons have constantly harped on how the present administration should be absolved from the current economic predicament in the country. However it is high time that significant attention was directed to the real issues of the current economic plan and implementation with a view to dealing with it. In the same vein subject matter experts and policy analysts owe it to the public to zoom into the budget details in order to highlight the central premise and critical line items as well as identify key measures for evaluating its performance over time. Indeed appropriate public awareness of government’s policy direction, action plans and measures of performance would lead to a positive multiplier effect on realisation of plans. This happens as the people become mindful of their role as stakeholders and beneficiaries of the plan, they watch for the expected outcomes and more even importantly seek to support and collaborate with government actions by taking ownership of the programmes particularly during implementation stage.
Buhari´s presidency has often stressed that the 2016 budget is predicated upon the principle of stimulating the economy via stimulus expenditure, probably in line with the Keynesian stimulus macroeconomics. This situation is usually made possible through borrowing or debt funding. According to the Minister of Finance, Mrs Kemi Adeosun, more than fifty percent (about $11 billion) of the total appropriation of $21.4 billion (N6.1 trillion) is expected to be borrowed. Does this capture the theme and spirit of Buharinomics?
It should also be noted that as with every measure of leverage, a country´s Debt-to-GDP ratio provides an indication of its credit worthiness. Recently, the government yielded to pressures to devalue and float the naira, after initial insistence on the contrary, following impacts of the fall in oil prices on the strength of the local currency. Apparently Buhari´s presidency has been mindful and careful with the potential implication of the devaluation on the value of country´s GDP and indeed the Debt-to-GDP ratio on dollar basis. Technically, should this value erosion continue it would portend the risk of the country losing its credit worthiness and expected access to debt financing of the national budget.
With the above scenario and risk, analysts and the general public should be concerned with what is the government’s target fiscal deficit as a percent of GDP for the 2016 fiscal year, and also with respect to an overall strategic “rolling” plan? How would a stimulus plan impact favourably on the goal to diversify the national economy from crude oil unless by encouraging growth of the real sector, chiefly manufacturing? Oil currently generates about 90% of foreign exchange earnings and 75% of government revenues, contributes about 30% of GDP but only about 3% of employment. Indeed it is needless continuing to tout the issue of monoeconomy unless to define and direct appropriate policy to ameliorate the vulnerable economic condition.
The notion of Buharinomics as currently perceived, or rather under-defined, seems to elicit more questions than there are answers. What is the reference strategic economic plan document that should inform the concept of Buharinomics? Are there accessible strategy document with bases for performance assessment of government´s expressed intents towards reduction of unemployment, poverty and inflation rates? For example the government of former president Olusegun Obasanjo had based its economic policy on the NEEDS (National economic Empowerment and Development Strategy) document as opposed to the erstwhile National Rolling Plan. Similarly, ex-president Goodluck Jonathan had launched the Transformation Agenda (TA) presented as a continuation of the preceding 7-Point Agenda strategy of the late President Umaru Yar’adua. Is it safe to assume that the policy thrust of the current administration of President Buhari is based upon continuation or consolidation of any or all of these strategies?
More than ever, the present time and situation demands for launch of an articulate policy package and direction from the current administration and policy makers, while calling for social responsibility and ethical professional duty on economics experts and policy analysts, and finally offers tremendous opportunity to ordinary citizens a.k.a. “the common man” for self-development through economic knowledge and capacity building.
Op–ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija