Former governor of the Central Bank of Nigeria, Charles Soludo has rated the Nigerian economy under the President Goodluck Jonathan has poor and non-performing, saying his record in economy was “‘F’ grade”.
Soludo in opinion released to media houses also pointed out that the on-going presidential election campaigns has been bereft of big ideas and specifics that can revamp the economy. He said while the presidential candidate of the All Progressives Congress (APC), Muhammadu Buhari, has been riding on the ‘wind of change’, he has not presented to Nigerians any cogent ideas that may salvage Nigeria if he wins next month’s elections.
He explains all the interventions the president is listing as parts of his achievements have only cosmetic values. Soludo wondered why the government who oversaw a period of oil boom did not save for the rainy, but instead plunged the country into huge external and internal debt.
“His record on the economy is a clear ‘F’ grade. As one reviews the laundry list of micro interventions the government calls its achievements, one wonders whether such list is all that the government could deliver with an unprecedented oil boom and an unprecedented public debt accumulation,” Soludo said.
“I can clearly see why reasonable people are worried. Everywhere else in the world, government performance on the economy is measured by some outcome variables such as: income (GDP growth rate), stability of prices (inflation and exchange rate), unemployment rate, poverty rate, etc. On all these scores, this government has performed worse than its immediate predecessor— Obasanjo regime. If we appropriately adjust for oil income and debt, then this government is the worst in our history on the economy. All statistics are from the National Bureau of Statistics.
“Despite presiding over the biggest oil boom in our history, it has not added one percentage point to the growth rate of GDP compared to the Obasanjo regime especially the 2003- 07 period. Obasanjo met GDP growth rate at 2% but averaged 7% within 2003- 07. The current government has been stuck at 6% despite an unprecedented oil boom. Income (GDP) growth has actually performed worse, and poverty escalated.
“This is the only government in our history where rapidly increasing government expenditure was associated with increasing poverty. The director general of NBS stated in his written press conference address in 2011 that about 112 million Nigerians were living in poverty. Is this the record to defend? Obama had a tough time in his re-election in 2012 because unemployment reached 8%. Here, unemployment is at a record 24% and poverty at an all-time 71% but people are prancing around, gloating about ‘performance’.”
The former CBN helmsman said Jonathan government has a weak economic team that is out of touch with reality on ground. He described the president’s economic team as a collection of “self-interested and self-conflicted group of traders and businessmen” who have pocketed the economy.
“The very people government exists to regulate have seized the levers of government as policymakers and most government institutions have largely been ‘privatized’ to them. Mention any major government department or agency and someone will tell you whom it has been ‘allocated’ to, and the person subsequently nominates his minion to occupy the seat,” he said.
Soludo said the government of Jonathan lacks excuse for its woeful performance since it inherited a relatively robust economy and also enjoyed years of oil boom.
He said instead of building on that outlay, the Jonathan government not only depleted foreign reverses, but increased Nigeria’s debt yet again, without adding a “penny” to the reserves.
Soludo, a former chief economic adviser to former President Olusegun Obasanjo, said in his estimation, if the economy had been well managed during the years if oil boom, Nigeria should have raked in a minimum of $102bn as foreign reserves, and would have cut unemployment and maintained exchange rate at N112 per dollar.
“For comparisons, President Obasanjo met about $5 billion in foreign reserves, and the average monthly oil price for the 72 months he was in office was $38, and yet he left $43 billion in foreign reserves after paying $12 billion to write-off Nigeria’s external debt. In the last five years, the average monthly oil price has been over $100, and the quantity also higher but our foreign reserves have been declining and exchange rate depreciating.
“My calculation is that if the economy was better managed, our foreign reserves should have been between $102 –$118 billion and exchange rate around N112 before the fall in oil prices. As of now, the reserves should be around $90 billion and exchange rate no higher than N125 per dollar,” he said.
Mr. Soludo said solving Nigeria’s electricity problems is not enough to create jobs as many believe. He said there are other factors, including the quality of manpower.
“For example, currently in Nigeria, it is estimated that more than 60 per cent of graduates of our educational system are unemployable. You can understand why many of us are amused when the government celebrates that it has established twelve more glorified secondary schools as universities. I thought they would have told us how many Nigerian universities made it in the league of the best 200 universities in the world. That would have been an achievement,” he said.
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