By Dele Sobowale
“The point though to keep in mind is that if you put this in historical perspective for Nigeria, the fact remains that real per capita income in Nigeria in 2021 is the same as it was four decades ago in 1981.” Dr Shubham Chaudhuri, Nigeria’s World Bank Country Director, October 2021 on why foreign investment has not recovered in Nigeria.”
DR Chaudhuri has spoken another truth to Nigerian powers – not just Buhari – about our deepening poverty and the repercussions it is having on foreign direct investment. It is the sort of message residents of Buhari’s corridors of power don’t want to hear because it punctures their illusions of lifting 10 million people out of poverty.
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The only thing that surprised me was how far back we have receded as a nation. My own calculations had suggested that we are back to 2002 or so. I was jolted and alarmed by the revelation that we have regressed as a nation to 1981 per capita income levels. It means that Nigerians now 60 and above might never see the country return to the level of prosperity the country enjoyed under President Shehu Shagari – against who Buhari led a coup in 1983.
THE EVILS THE MILITARY DID TO NIGERIA
For the sake of those too young to know, a level 10 Civil Servant could afford to take a loan to buy a brand new car; and repay the loan with interest comfortably in four years; and take another loan. Today, even a Permanent Secretary cannot on his/her lawful income afford to buy a new car. Our descent down the slippery slopes into extreme poverty started with Buhari in 1985.
Incidentally, the price of crude oil was never higher than 30 dollars per barrel throughout the fifty-one months of Shagari Presidency. Yet all public servants in Nigeria were paid as and when due. Those going on retirement went away with their gratuities paid and the pensions followed regularly. To be sure, there was corruption; but, it was like pocket-picking compared to today’s grand larceny under which billions of naira of pensioners entitlements are embezzled by one person. In 1981, Nigeria was classified as a Middle Income Country, MIC. That was the last time we were able to hold our heads high all over the world and we did not need a Visa to enter Britain.
Calamity first reared its ugly head in 1984; when under Buhari, the country suffered its first recession. Instead of taking measures to revive the economy, Buhari and Major-General Idiagbon turned nasty. They promulgated a series of draconian decrees which turned Nigeria into a police state and turned off potential foreign investors. The FG had no single idea which could attract investors. The exodus started. By early 1986 some more companies which had decided to wait and see no longer waited. They have seen enough. Brain drain followed the exit of foreign investors. Those who were most needed to revive the economy left the country – never to return.
By 1999, when General Abdulsalami Abubakar handed over to retired General Olusegun Obasanjo, Nigeria had descended to a new level – a Low Income Country, LIC. We were heavily indebted to the tune of US$36 billion – without prospect of repaying. The new satrap in agbada in Aso Rock became an international beggar. Every meeting with leaders of Europe, America or Asia was an occasion to beg for debt forgiveness.
Help finally came when Dr Ngozi Okonjo-Iweala was loaned to Nigeria from the World Bank. She was appointed Minister of Finance. Granted, some Nigerians thought that she paid too much to secure our exit from the debt trap. Still, nobody can deny that Nigeria became debt-free in 2004; we were free to rebuild our economy and return to MIC status.
The price of crude oil was escalating and the prospects were bright. Foreign Direct Investment, FDI, started rushing in again. Diversification of the economy was within reach. Unfortunately, we elected (or got foisted on us) a leader who was trained in a God-forsaken Military academy – set up to train killers and destroyers. Economic development is certainly not on the syllabus at Sandhurst – demolition is the main attraction in military academies. Predictably, after eight years of sustained crude price increase and Obasanjo Presidency, Nigeria remained a mono-product economy. Still, miraculously, our per capita income improved slightly. But, General Obasanjo was not through with us.
He imposed two most unlikely candidates to succeed him and Vice President Atiku – Umaru Yar’Adua and Goodluck Jonathan. The former was a reluctant candidate who was keenly aware of his health challenges. The latter had spent only a few months as Executive Governor of Bayelsa State; and as unprepared as anybody can be for presidency. With that in-built leadership deficit, OBJ launched Nigeria on eight years journey during which we accumulated the greatest oil revenue; and still there was no diversification.
We were collectively self-deluded to have expected much from Yar’Adua and Jonathan. They never promised us anything; did not lay out any development plans. Still, we divinely moved up slightly on the income scale. Jonathan’s administration gave us the only three years of consecutive above 4% annual Gross Domestic Product, GDP growth since the Gowon years.
The years 2012, 2013 and 2014 recorded 5%, 6.75% and 4.2% respectively.
Entered Buhari in 2015 by popular vote. And with our own votes we sent the country sliding more rapidly than ever before into crushing poverty. Because 2015 was shared between the out-going and the in-coming governments, it is only fair to leave it out of consideration.
Historians of the future will note that by the end of 2020, Nigeria had experienced three recessions; and Buhari was in charge each time. Even the professional liars in Aso Rock cannot deny that. We still have nearly two years to go before Nigeria is relieved of the present government. Right now, the record stands like this: two years, 2016 and 2020, of recession; three years, 2017, 2018, 2019, of less than 2.5% GDP growth; and one, 2021, pending. Cumulative growth for 2016 to 2020 is less than 1 per cent.
Meanwhile, population has increased by 15 per cent in the same period. So, we know one reason why we have become poorer under Buhari; and will continue to get worse under him.
DEBT WITHOUT INVESTMENT –POVERTY TRAP
The World Bank Country Manager also pointed to a second major reason why Nigeria is now locked in a long term poverty trap. Obviously, nobody at the top levels of the Buhari administration understands the meaning of the word “investment”. In their collective ignorance, they actually believe that borrowing to build a rail line to Niger is an investment in infrastructure. But, ask them how and when they hope to generate the funds to repay the loan and you will draw a blank. Strictly speaking, for a project to be regarded as an investment, it must be able to generate the revenue to retire the loan plus interest. Every investment involves a project; but every project does not constitute an investment. It is as simple as that.
Because Buhari and his Minister of Finance don’t understand this simple fact, they have borrowed extensively and thrown some of the funds at projects which will not earn a kobo in returns. Some are destined to become abandoned projects for which future generations will pay in worse poverty than we now experience.
That is the enduring Buhari legacy.
By Dele Sobowale