NBS and the scorecard of an eclipsing administration
With a few days to the May 29 inauguration of the new administration in the country, it is glaringly evident that President Muhammadu Buhari-led Federal Government has successfully completed its constitutional two terms of eight years. Though there exists no codified, metered or iron cast way of assessing the administration’s performance, it is, however, assumed that an administration that spanned eight years must have milestone(s) of achievement to point at.
Indeed, while there are flicker and recognisable flashes of achievements in some sectors of the nation, interim particulars in my view, suggest that infrastructural provision is the administration’s greatest accomplishment. The crucial point, then, is how does one define what constitutes infrastructural success and how was it achieved? What are/were the opportunity cost of the purported success?
In February 2021, President Buhari reportedly established the Infrastructure Corporation of Nigeria (InfraCorp), with initial seed Capital of N1 trillion, provided by the Central Bank of Nigeria (CBN), the Nigerian Sovereign Investment Authority (NSIA), and the Africa Finance Corporation (AFC). InfraCorp was also expected to mobilise up to an additional N14 trillion of debt capital. Through InfraCorp, Buhari catalysed and accelerated investment into Nigeria’s infrastructure sector via originating, structuring, executing and managing end-to-end bankable projects in the country.
Today, the administration has to its credit: 56km Lagos-Ibadan Standard Gauge Rail completed and commissioned, within a Nigerian-record-time of four years (2017 to 2021). 186km Abuja-Kaduna Standard Gauge Rail Line completed and commissioned in 2016. 327km Itakpe-Warri Standard Gauge Rail completed and commissioned in 2020 – that is, 33 years after construction began. Also, the administration going by media reports invested over a billion dollars in three flagship projects: Lagos-Ibadan Expressway (for completion in May 2023), Second Niger Bridge (for completion in May 2023), Abuja-Kaduna-Zaria-Kano Expressway (two of three sections for completion in May 2023) among others.
Even when this piece holds the opinion that the administration demonstrated understanding of the pivotal role infrastructural provision plays in providing the society with the services that underpin the ability of people to be economically productive, it will on the other hand objectively qualify the aforementioned achievements as sparse and insufficient, particularly when juxtaposed with a catalogue of adequately unattended sectors (education, security, Power, Niger Delta region Labour and Employment etc).
In fact, each time I reflect on President Buhari’s eight years administration, the fears expressed by a friend in 2015 about the present administration comes flooding in. Adding context to the discourse, my friend amidst euphoria triggered by the declaration of the 2015 presidential election result cautioned me with these few words: “men will change their ruler expecting to fare better; this expectation induces them to take up arm against him, but they only deceive themselves, and they learn from experience that they have made matters worse”. Still, in that milieu, I had reminded him that the result ushered in a season of integrity in the country, he again replied thus; no single attribute could be identified as a ‘virtue’. Remember! He added, ‘Politics has its own rules’.
Eight years after that conversation, I cannot categorically say that my friend was right or wrong in his prediction. But the present instinct in the country explains two things; first, apart from the fact that the shout of integrity, which hitherto rends the nation’s political space, has like light faded, jeer has since overtaken the cheers of political performance while fears have displaced reason – resulting in an entirely separate set of consequences – irrational hatred and division.
The reason for this spiraling feeling is understandable! Take as an illustration, in 2020 alone, there were outright abridgments of the masses’ welfare by the Federal Government via increase of Value Added Tax (VAT) from 5 to 7.5 per cent, re-introduction of Stamp Duty Charge, re- introduction of Stamp Duty on house rents and C of O transactions, electricity and petrol price hikes crisis among others. These were inextricably linked both in their causes and solutions.
Each of these challenges has its roots in the administration’s payment of little attention or lip service to expert warnings about the poor state of the economy, and further fed by Federal Government’s persistent formulation of policies with no clear definition of problem, the goals to be achieved, or the means chosen to address the problems and to achieve the goals; adoption of coquettish tactics that make the masses fall in love with excitement while they (leaders) remain inwardly detached; keeping them in control.
There are very recent examples. According to a recent report by the National Bureau of Statistics (NBS), it stated that in April 2023, the headline inflation rate rose to 22.22 per cent relative to March 2023 headline inflation rate which was 22.04 per cent. Looking at the movement, the April 2023 inflation rate showed an increase of 0.18 per cent points when compared to March 2023 headline inflation rate. Similarly, on a year-on-year basis, the headline inflation rate was 5.40 per cent points higher compared to the rate recorded in April 2022, which was 16.82 per cent. This shows that the headline inflation rate on a year-on-year basis increased in April 2023 when compared to the same month in the preceding year (i.e., April 2022).
Likewise, the report added that on a month-on-month basis, the All-Items Index in April 2023 was 1.91 per cent, which was 0.05 per cent points higher than the rate recorded in March 2023 (1.86 per cent). This means that in April 2023, on average, the general price level was 0.05 per cent higher relative to March 2023. The percentage change in the average CPI for the 12 months ending April 2023 over the average of the CPI for the previous 12 months was 20.82 per cent, showing a 4.37 per cent increase compared to the 16.45 per cent recorded in April 2022.
While the above qualifies as an occurrence that its pain is deepened by the fact that it was avoidable, it is important to further underline that if there is a particular area where the present administration cannot boast of clean hands, it is in the incessant debt accumulation (foreign and domestic). It is a common knowledge that in January 2023, Patience Oniha, Director General, Debt Management Office (DMO), while fielding questions from journalists at the public presentation and breakdown of the highlights of the 2023 appropriation act in Abuja, noted that the incoming Federal Government would inherit about N77 trillion as debt by the time President Muhammadu Buhari’s tenure ends in May.
Aside from signaling an indication that Nigerians should expect tough time ahead or better still, may not anticipate a superlative performance from the incoming administrations as they will from inception be over burdened by debt, what is, however, ‘newsy’ is that each time the present Federal Government went for these loans, Nigerians were usually told that the loan seeks to stimulate the national economy, making it more competitive by focusing on infrastructural development, delivery of inclusive growth and prioritising the welfare of Nigerians to safeguard lives and property; equipping farmers with high tools, technology and techniques; empowering and enabling mines to operate in a safe and secured environment and training of our youths through revival of our vocational institutions to ensure they are competitive enough to seize the opportunities that will arise for this economic revival.”
Again, it is evident from the above that the nation did not arrive at its present state of indebtedness by accident but through a well programmed plan of actions and inactions that engineered national poverty and bred indebtedness. The state of affairs dates back to so many years in the life of the present Federal Government.
As noted in my recent and similar intervention, the nation was warned with mountains of evidence that this was coming, it was also pointed out that under the present condition of indebtedness, it may be thought audacious to talk of creating a better society while the country battles with the problems of battered economy arising from indebtedness, yet, our leaders who are never ready to serve or save the citizens ignored the warnings describing it as a prank. Now we have learnt a very ‘useful’ lesson that we can no longer ignore.
In 2019, the rising debt profile of the country dominated discussion when the Senate openned debate on the general principles of the 2019 Appropriation Bill. Most of the contributors to the referenced debate asked the executive to exercise some level of caution on its borrowing plan in order not to return the country to a heavily indebted nation it exited in 2005 through Paris Club debt relief.
Senate Leader, Ahmed Lawan, (as he then was) kicked off the debate when he read: “A Bill for an Act to authorise the issue from the Consolidated Revenue Fund of the Federation the total sum of N8,826,636,578,915 only, of which N492,360,342,965 only, is for Statutory Transfers, N2,264,014,113,092 only, is for Debt Service, N4,038,557,664,767 only, is for Recurrent (Non Debt) Expenditure while the sum of N2,031,754,458,902 only is for contribution to the Development Fund for capital Expenditure for the year ending on 31st day of December, 2019.
While noting that the budget deficit will be funded through borrowing, Lawan among other things stated; “about 89 per cent of the deficit (N1.65 trillion) will be financed through new borrowings while about N210 billion is expected from the proceeds of privatisation of some public enterprises.” Debt Service/Revenue Ratio, which was high as 69 per cent in 2017, has led to concerns being raised about the sustainability of the nation’s debt.
Reacting to Lawan’s words, many Nigerians raised the alarm on the country’s rising debt profile. They noted that though the budget estimates should be given expeditious consideration and passage in view of the time already lost, the borrowing plan contained in the Bill should be properly scrutinised. They insisted that scrutinising the borrowing plan became necessary to prevent the country from exceeding its borrowing limit when juxtaposed with the ratio of Gross Domestic Product (GDP).
Even some Senators in their submissions frowned at the nation’s increased borrowing proposals on our yearly budget, which they described as becoming unbearable. “Yes, money must be sought for by any government to fund infrastructure, but it must not be solely anchored on borrowing, which in the long run, will take the country back to a problem it had earlier solved. Besides, there are other creative ways of funding such highly needed infrastructure.”
To be continued tomorrow
Utomi is the Programme Coordinator (Media and Politics), Advocacy for Social and Economic Justice (SEJA), Lagos. He could be reached via;firstname.lastname@example.org or 08032725374.