NIGERIA’S ECONOMIC WOES:- WHO IS TO BLAME?
Everytime i log onto twitter, there is always one political argument of some sort. I got so tired that I decided to come out of my short lived career as an amateur writer to address some issues.
I'll like to tell you all story, but before I start I heard pure water is about to hit N20 per sachet? Well, there is tap water at home.
There is this company called Baku Inc. Baku manufactures beauty products and sells to its numerous customers to across the globe. The company was a publicly traded company, and it was headed by a renowned baby boy Mr John Ibe who was appointed by shareholders(owners).
The beauty product business blew up so big in 2010 that it made Baku so wealthy. The organisation was quite flamboyant that even the lowest grade staff lived in Mansions. The company’s employees and shareholders were relatively happy in that period as the company’s beauty products were of high demand.
Unfortunately in 2014, the beauty business started to tumble. Customers had started finding alternative means to enhance their beauty, some found out that they could also use palm oil that they had to beautify themselves.
Demand fell and ultimately Baku started earning less. Baku who used to earn an average $30m month in the boom of beauty products business saw earnings dropped to as low as $200k monthly.
Unfortunately Baku did not save for the rainy day like some of it’s peers when the grass was greener. It squandered it’s earnings like there was no tomorrow. Although it made some other investments to diversify it’s earnings, it was very little compared to what it cold have done.
Mr John Ibe was under pressure, the company's shareholders (owners) were very angry at the downturn in profit. Not only was profit dropping, the organisation was starting to collapse.
Shareholders also found massive corruption ongoing in the organisation and got even angrier, so they called for an annual general meeting in 2015. Majority of the shareholders decided to vote Mr John Ibe out. They then appointed Mr Musa Boba
Mr Musa Boba, a former employee of Baku, was elected to lead the organisation. He was tasked with the role of finding the solution to Baku’s profit slum as well as other internal problems. There was some sense of hope when Mr Musa Boba took over, because to many, he was seen as the saviour to the organisations numerous problems. His biggest strength was his incorruptible personality, one that shareholders had clamoured that their leader possessed for a while.
Fast forward months into his tenure, Baku is worse off than Mr John Ibe left it. Partly because Mr John Ibe left a very sick organisation and obviously for the lack of planning and direction from Mr Musa to lead the organisation to where the shareholders want it to be.
The lack of direction has even made other investors pull out of the organisation and it's sinking badly. All indicators point to the fact that Mr Musa does not have capacity to pull out the organisation from it's sinking state, well at least at the moment. It's that bad that it's not just profit figures falling, the company is on the verge of collapsing.
Story sounds familiar? Yes, that Is the country you live in called Nigeria. The economic predicament we find ourselves in today is because Nigeria has eaten it's future yesterday and does not know what to do today.
Nigeria at optimum capacity is Africa’s largest oil producer with 2.2million barrels a day. With Crude Oil averaging $100 from 2010 - 2014 (even as high as $130), one can’t help but wonder where this money mystically disappeared to, since we could not save, nor see what the money was used for.
Saudi Arabia in that period saved more than enough to contribute their $900bn foreign reserves and $450bn sovereign wealth fund, Norway another oil producer built up an $85bn foreign reserves and a whooping $900bn in sovereign wealth fund, Russia, Kuwait, Algeria and more even did similar. They saved for the rainy day.
Like the saying goes "Misery loves company", there are some other oil producing countries who followed Nigeria’s bad gang footsteps and ate away it’s future (Venezuela, Angola and few others). Even in our misery, we can find hope when we turn to look at Venezuela (the country is so broke it can’t even print it’s own money.)
Nigeria as at 2015 had only $1billion in wealth fund and 32 billion in fx reserves (of which we have used about $4-5billion to defend a currency that was already dead, while practising Buharinomics A.K.A Don't kill the naira)
Now the oil boom era is over, how are those countries that saved when they had excess doing right now? Saudi Arabia has used up close to $300bn from their fx reserves to maintain status quo(maintaining subsidy and defending its currency). Norway has drawn up billions of dollars from its sovereign wealth fund to also cushion the effect of the shock, Russia plans to expend it’s $89billion it saved in Wealth fund by 2017 and so on. Although it’s not all rosy for these countries, they are also feeling the heat like Nigeria owing to the slump in oil price, but they are way better off.
Again, what’s more annoying and shameful is that the richer oil producing countries have started a process to diversify their earnings away from Crude oil, to be able to garner more foreign exchange and grow their economy. But over here, it is almost as if our government has folded it’s arms (except when it’s time for propaganda), waiting for the price of oil to go up again (which is not feasible anytime soon).
Bad enough as it was with the delay in President Buhari picking ministers (most of whom are still sleeping), the Almighty 7trillion Naira 2016 budget that the FG planned to use to spend it’s way out of the economic slump, suffered several setbacks. From the delay in our glorified beer parlour (National assembly) to the inability for the FG to source funds to balance the budget deficit etc.. All of these have also compounded to our economic woes.
Nigeria urgently needs to wake up economy and most importantly, diversify it’s foreign exchange earnings. For a country with over 160 million people, we are simply not as productive ( i mean who takes 3 working days off in a week for holidays, when you are not Venezuela).
There are so many sectors still to exploit which can make this country more productive, but i’m yet to see any policy direction from this government in such sectors (except for something brilliant on Agriculture by the Ministry of Agric unveiled some days ago)
Naira has fallen to unprecedented lows to the dollar due to the fact that our biggest foreign exchange earner(responsible for 90% foreign exchange income) that is crude oil, has dropped by over 60% since 2014, we simply do not have enough dollars to meet the demand of Nigerians (so much naira chasing few dollars).
After numerous calls by international bodies to devalue our currency, the CBN has finally lifted the peg on the currency and floated the Naira(something that should have been done much earlier). This was supposed to attract foreign investments into the country, in the process ease the pressure on the falling Naira amongst other things. But the investors are still on the sidelines because we aren’t showing them any signs that we are serious.
All indicators point to the unsurprising fact that Nigeria’s economy is headed into recession (two quarters of negative growth), Inflation is at 16.5% ( one of the highest in sub Saharan Africa), unemployment rate rising, consumers purchasing power dropping drastically and businesses shutting down. Yet the government of the day is acting like all is well.
To put in perspective, Nigeria’s economy is so bad right now that P-square have put aside their irreconcilable differences in order to look for money together (D’banj and Don jazzy next? who knows).
So who is to blame in all of these? Former President Good luck who failed to save for the rainy day by allowing corrupt cronies eat up the yams or President Buhari who his stubbornness and lack of direction compounded the woes? I tell you, it is not just both of them.
The blame should be on every Nigerian. Yes you. You reading this now. For your inactions, for allowing your public servants who ought to be accountable to you to mess up this nation while your keep quiet, for your inability to challenge your public servants in their wrong doings.
Blame yourself for picking sides to defend a colossal failure in GEJ. Blame yourself for defending President Buhari, a/an (insert your favourite curse word) that is redefining failure by the day (I really hope He proves me wrong). Blame Akon too (his light up Africa project didn’t get to Nigeria).
Your country is fast sinking, you are left with two options. Seize it from these Old men who are sinking it (no biafra intended, before DSS starts looking for me) or continue to defend incompetence as you drown in the Ocean. Oh I forgot, pray too as that is all we know how to do.
As for me i’ve picked option 3. My Schengen visa is ready. I can’t come and die. Adios