By Achilleus-Chud Uchegbu
In 2015, President Muhammadu Buhari jerked up the pump price of petrol from N87 to N145. With that action, inflation pumped by more than 100 percent. The market was quick in responding. Family purchasing power took a dive south ward as wages remained constant.
His party, the All Progressives Congress (APC), his image minders, horde of spokesmen, beneficiaries of his appointments and a set of hopefuls went to town with defenses on why Nigerians ought to suffer and enjoy later.
Government was quick to come up with quick fixes, which have also failed to plug the holes. Let me x-ray some of those quick fixes.
A Meal A Day
President Buhari rarely mentions it anywhere. But his deputy, Prof. Yemi Osinbajo SAN, parrots it everywhere he goes. He tells anyone who cares to give an ear that the administration he is part of has got some nine million kids eating a meal in school every day. For this, he posits that more than N48 billion has been spent making sure that kids have a meal in school.
Note that the meals are restricted to primary school kids, mostly in public schools. Those in secondary schools are exempted. But the reality is that feeding children in schools is a useless policy. I will explain. First, what is the essence of giving a child a meal at school when he is not guaranteed one at home?
Every child returns to his parents after school hours. So, what happens if his parents lack the capacity to feed him at home? While feeding kids in school may come off as incentive to keep them in school, what happens when they go to bed hungry, or go to school hungry?
School feeding is the response our government came up with when it became evident that it had eroded capacity of parents to properly feed their kids. Any parent should be able to feed their kids.
Our children need free and qualitative education. They need functional school libraries. They need teaching aids. They need well-trained teachers who are paid very well -teachers who can easily buy, and own, cars: Teachers who can comfortably pay for mortgage or buy houses for themselves.
Our children need schools with functional school transport systems. They deserve to learn in good school buildings not under trees. Not just a meal a day.
My take? Enhance earning power of parents, rebuild and equip public schools, make them more functional, pay teachers like you pay professionals and leave parents to feed their kids, even during school hours…
N-Power was designed and developed by the Buhari administration as an avenue to create jobs for Nigerians. Actually, it gives false hope to the job seeker. As a matter of fact, it is a volunteer programme, which has a terminal date. It pays N30,000 per month per volunteer giving one false hope about tomorrow.
Many of the volunteers known to me have had their romance with the N-Power ended because new groups must be brought in. What this means in essence is that the administration pulled through some policies that ensured that many businesses were shut while many large employers of labour had to necessarily downsize.
According to Manufacturers Association of Nigeria (MAN), 272 firms shut down in Nigeria as at August 2016, that just one year after the Buhari administration took over the mantle of leadership. Nigerian Association of Chambers of Commerce Industry, Mines and Agriculture (NACCIMA), puts the figure at 800 firms as at December 2018. The 2016/2017 fiscal year was heralded by massive job losses in the financial and manufacturing sectors of the Nigerian economy.
Job loss statistics from the National Bureau of Statistics (NBS) are frightening. NBS said 20.9 million jobs were lost in Nigeria between 2015 and December 2018. NBS also detailed that unemployment figures as at third quarter of 2018 was at 23.1% against 22.7% it stood at the end of the second quarter of 2018. Spectator Index puts Nigeria’s GDP growth rate at 4% over the past five years while India and China grew at 45%. The index also puts our country’s unemployment figure at 36% behind only Greece with 38% and South Africa with 52%. Even claims by President Buhari that his ‘revolution’ in the agriculture sector had created 12m job is discounted by the NBS.
Clearly, the failure of Buhari’s policies have had direct effect on job losses in Nigeria.
This is a most opaque of every programme created by the Buhari administration. Under this programme, the government makes budgetary provision for conditional transfer of cash to select persons across the country. The cash value is put at N5000 per recipient every month. However, so far, there is no evidence that this N5000 transfer to an unnamed list of persons, had altered their financial or social status. In terms of delivery and outcome, it has remained opaque. Details of beneficiaries of such cash transfers are closely guarded secret. Criteria for selection is top government secret.
This is another most dehumanizing programme that only works to expand the poverty index. It also comes as an attempt to plaster and open sore without treating the wound. Nigeria’s world ranking as the poverty capital of the world became possible because of government’s decision to shut down the economy in other to go chasing those it believes are thieves. By the action, businesses shut down. Earning power dropped. Jobs were lost. But the inflation caused by the increase in the pump price of petroleum products remained static.
The government refused to take proactive actions to refloat the economy by releasing money through payments for services rendered. Rather, it stock-pilled money and was happy to announce increase in the TSA and not increase in economic activities. Despite its foreign trips, it attracted no foreign investments and the level of FDI’s dropped such that Ghana became the top nation for FDI in sub-Saharan Africa. The only thinkable response to this glaring failure was tradermoni -sharing to N10,000 to traders in select states on condition of releasing details of recipients’ PVC. Though it has been seen a vote-buying, the reality is that N10,000 adds little or nothing to the family of a market woman who would need to spend not less than N1000 on transportation to take her wares to the market.
20% Increase In Cost of Medicines
By the end of 2016, government decided that it must end drugs importation into Nigeria. To discourage that, it imposed a 20% tax on imported medicines. Prior to that date, Nigeria enjoyed 0% on imported medicines. Most of the affected drugs are not produced in Nigeria. And where they are produces, the pharmaceutical companies lacked capacity to meet demand. Of the about 300 drugs manufacturers in Nigeria, only five were certified by WHO as at December 2016.
Drugs affected most are those used in the management of life-threatening conditions. Their prices jumped quickly in the market making it very difficult for many to manage their conditions with stagnant income. For instance, as soon as the tax was imposed, the market value of C-Dovan jumped from N1000 to N3000 while a vial of insulin moved from N900 to N3000. Also, omeprazole, used in managing ulcer moved up to N3000 from N150 while ketamine, an injection, became N8000. It was previously sold for N1200. Somehow, the drastic and immediate increase in the prices of medicines was a direct consequence of the 20% tax, which pharmaceutical importers warned against but were rebuffed.
Import Duty Increase
The Buhari administration took a decision in 2017 to impose heavier duties on some imported goods. For instance, luxury cars, SUVs, boats, sport cars and other vehicles or facilities used for pleasure got a 25% tax increase. They moved to 35% from 10%. Sugar and salt got a 60% increase to become 70% from 10%. Alcoholic beverages moved up from 20% to 60% while cotton and fabric material moved up by 10% to become 45%.
Rice got a 50% tax increase to hit 60% while packaged cement got a tax increase to 50% from previous 10%. Anti-malarial, antibiotics, crude palm oil, what flour, tomato paste and many others also got new tax rates. However, while many agree that there was need to outrightly ban certain item which can be readily produced in Nigeria, there was concomitant view that the high tariffs will rather increase poverty as it has the tendency to cause the shut down of some businesses.
There are virtues, which the government did not take into consideration in its action. Manufacturing companies in Nigeria depend on imported machineries and spares to remain afloat. This means they have to access forex at rates that could keep them in business. However, the Buhari administration, allowed the dollar to hit N550 in the parallel market while it remained available to ‘friends of the throne’ at official rates at the CBN. The effect of this was that many importers who could not access forex at high rates, shut down. Many firms that could not access spares and machines, from abroad, to boost production, packed up.
In responding to this reality, the government started out mouthing improved Small and Medium Scale Businesses funding.
Till date, it is not known what incentives the government had put in place to boost the manufacturing sector.
That is the major reason Nigeria went into recession, then, depression before we wriggled out thought the effects are still with us. We wriggled out of recession numerically. The impacts are yet to disappear.