Soludo: Jonathan had the worst economic team

Chukwuma Soludo, former governor of the Central Bank of Nigeria (CBN), says the presidential regime of Goodluck Jonathan had “the worst economic management team” relative to available resources.

The former Anambra state governorship aspirant also lamented that the Jonathan administration left the country with an “unprecedented rate of debt accumulation”.

However, he commended the Peoples Democratic Party (PDP) for still managing to record “tremendous progress” in its 16 years of ruling the country.

Soludo was speaking in Lagos on Thursday at the third anniversary lecture of the RealNews magazine titled ‘Can a New Buharinomics Save Nigeria?’

“First, I supported President Muhammadu Buhari (PMB) over Jonathan not because I was convinced about the credibility of the APC manifesto (and I said so in my article in January this year) but for three reasons. I was convinced that the last economic team was bankrupting the economy and had no clue as to how to fix it,” he said.

“Second, PMB is the first president of Nigeria under a democracy to have seriously desired the job and struggled for it for over 12 years. To me therefore, he must have a few points to prove, and I was willing to bet on a man who purposefully wanted the job than otherwise.

“Third, I was convinced that it would be in the enlightened self-interest of the APC, once in power, to do their utmost to keep power by delivering on the economy unlike the PDP which had taken power for granted. I am still confident that PMB can deliver change (although as I had indicated in my article in January, I didn’t believe that any of the two parties could deliver on their manifesto) but he and his team now need to run at the speed of a 1000 km per hour.

“We must support them to succeed by contributing when we can, and criticising when we must — tough love! I am enjoying my status as ‘an independent’ (I don’t belong to APC or PDP) and I therefore have the liberty to say it as I see it from the balcony!

“As at 1999 when PDP came to power, Nigeria was largely a pariah state still lucky to have survived as one indivisible sovereign, especially in the context of the struggle by NADECO and restiveness in many parts of the country. On corruption, Transparency International scored it 1.6 out of 10 and ranked 98 out of 99 countries in 1999. Nigeria was listed among four countries that were non-compliant on the anti-money laundering rules by the Financial Action Task Force (FATF).

“We could not service our external debt and relied on stressful rescheduling, with all the intrusive donor conditionalities. Poverty was estimated at 70%, and unemployment at nearly 20%. The 1990s will go down in our economic history as the decade of stagnation: when per capita income growth was zero. Average oil price in May 1999 when President Obasanjo took over was $15.24 while stock of reserves was about $5 billion.”

Reflecting on PDP’s and Jonathan’s reign, Soludo said: “After 16 years, several challenges remain and some have even worsened (especially insecurity). Although President Jonathan’s regime had the worst economic management relative to the resources at its disposal, it must be stressed that tremendous progress was made in the aggregate 16 years of PDP government.

“Yes, it should have left more than $100 billion in reserves but left only $30 billion (still about six times of what it met). We also wish that Jonathan’s team did not leave Nigeria with unprecedented rate of debt accumulation. But, according to statistics from NBS, the PDP handed over a $550 billion economy (largest in Africa and 26th in the world), with 7.5% unemployment rate (better than European Union, France, Sweden, Belgium, etc although the underemployment figure is much higher); 32%?? poverty rate (as claimed by the former Finance Minister, or 61%??: NBS needs to clarify this claim); a stock of reserves of $30 billion; GDP growth rate averaging 6% over last 12 years; a relatively more diversified economy, with ICT penetration from 0.2% to over 60%, and a new contributory pension scheme now with trillions of Naira in pension fund.

“Our external debt is down although total debt stock is escalating. Our Gini coefficient (degree of inequality) is not different from China’s. Nigeria has consolidated and stronger banking system that currently finances both government debt and the private sector, with a relatively vibrant capital market. The capitalization of the Nigerian Stock Exchange grew from less than N1 trillion to N12 trillion as at handover. For the first time, Nigerian economy is now rated by credit rating agencies (Fitch, and Standard and Poor’s).”

The fulltext of Soludo’s lecture is available here.