Clearly Buhari has to change his ways

If Nigeria experiences another negative growth in the second quarter as reported by the National Bureau of Statistics (NBS) for the first quarter of 2016, we would officially be in a recession. For some of us already groaning about the harsh economic climate in the country, I would advise we brace up for harsher times, if President Muhammadu Buhari doesn’t change his stand on the economy – those guys I saw in Kano, who were supporting the latest increase in fuel prices, might turn around and start cursing the President when these imminent hard times come.

Let’s be clear, Nigeria as it is today, is like an airplane headed for the mountains. We are in a pure stagflation – high inflation, looming recession and high unemployment.

On top of the job losses being announced everywhere in Nigeria, analysts expect the CBN governor to raise interest rates this week – this would likely make it harder for businesses to get access to funds. The bank governor argues that having benchmark interest rate (MPR) below the inflation rate is an unacceptable model. He made this argument in April when the NBS announced an inflation rate of 12.8% for the month of March.

With the way things are going, inflation would definitely increase in the coming months, judging from the recent increase in the pump price of petrol. If we go by the CBN governor’s argument, we might have benchmark interest rate hit 30% because he definitely wants interest rate to be higher than inflation. If this happens, very few of us would have jobs in the coming months.

Wait a minute. Do you even believe the inflation rates being bandied about by Nigeria’s statistical agency?  In March, when most Nigerians bought fuel at N250, which was then about 300% above its normal price, the statistical agency reported a 12.8% inflation. Last April, when the cost of staple food, like garri and tomatoes, almost increased by 200%, the agency announced a 13.7% inflation rate. Remember that the cost of fuel, for example, affects the prices of everything in Nigeria. The problem is with the questionable CPI method the NBS uses in calculating inflation. However, this is a topic for another day.

However, this discourse is not about the CBN governor, though he is a member of the country’s economic team, which the President has to work on or allow to do their job. The President’s recent comments have shown that there is really no difference between the presidential villa and the Central Bank.

With the latest negative growth figures from the NBS, it is evident Nigeria is in deep trouble. We have never had these kind of numbers in the last 25 years. Honestly, some of us who secretly admired Buhari, saw this coming but we tried to push the blame to the National Assembly, who we accused of delaying the budget.

We saw it when foreign investors started divesting from Nigeria. Yet, the President didn’t get the signal. As if it was comedy show, the President was busying going around the world looking for investors when the ones in the country were closing shops.

I strongly appeal to the President to change his thinking because he probably saw portfolio investors, who were divesting, as not the type of investors he wanted. Yes, we would have preferred investors who built factories, instead of those who came in with suitcases to our stock market. But, the truth is that these guys actually came in with suitcases filled with money. By and large, these hot monies, as some call it, still enters our economy – it still helps in shoring up the value of our naira.

I might be wrong, but I have really not seen the President address this issue of capital flight. The President has to start now. With inflation at double digits, unemployment at double digits and recession looming, the President has to accept that he needs help. The President has to open up Nigeria for business. He has to speed up some very important concessions and privatization processes.

Needing help is by no means a sign of weakness. It doesn’t mean asking someone to do your job. In fact, if he doesn’t ask for help as soon as possible, he might regret his action in the next one year. The President is not an economist, and he doesn’t have any in his economic team.

If he finally appoints a strong time, he should listen to them. Remember the President has been reported as saying that nobody has been able to convince him about the benefits of devaluing the naira. If they haven’t, I wonder if they have been able to convince him about the problems that comes with a delayed adjustment, or rather the disadvantages of not having a flexible exchange rate. Something tells me he behaves like a strict lecturer, at least to his ministers. I am not saying he shouldn’t be strict.

The recent rigmarole before he finally removed fuel subsidy shows that there is no clear economic direction, yet, in the country. The President has to set up a team of seasoned economist, not just the so-called technocrats, to come up with a blueprint. The complexities of modern economies is not what you leave for lawyers and accountants.

Now that the budget has been passed, though it’s coming late, some informed analyst will now find out that the problem had little to do with the non-passage of the budget. After all, some state governments passed their budget in January, and things haven’t really changed for these states.

Some of us who love Buhari know he is just like the Philippines’ president-elect, Rodrigo Duterte. Both of them screamed about corruption but they really had no clear-cut solutions to other economic problems, even the corruption itself. They, apparently, understood how to win elections in developing countries.

We have forgiven him for not having a plan, but he should seek help now. A -0.37% growth rate decline compared to last quarter’s 2.11 % growth causes for concern.

Now, some of the President’s boisterous supporters have lost their voices. If the President doesn’t change his stance and mindset, as regards the economy, he might be lonely man after 2019.