Although, the government had assured that they had articulated many social protection programmes in the 2016 budget to cushion the effect the hike of fuel price may have on Nigerians, as at the end of 2016, not many Nigerians could point at one of the measures or anybody who benefitted from them. The chain reaction of the fuel price increase has reduced Nigerians into a shadow of their old selves with many averring that this was not the change that they voted for.
Expectedly, the fuel price increase and the hike in electricity tariff triggered an unprecedented inflation in the cost of commodities in the market and ever since, the prices of commodities have continued to rise without respite.
To compound the issue for the hapless Nigerian workers who have remained at the receiving end of the government policies, there was no consideration for increase in the minimum wage. Apart from the wage remaining an unrealistic N18, 000 most workers especially at the state and local government levels as well as some firms in the private sector, were being owed several months of salaries arrears.
Some analysts would argue that the APC government subtly broke the ranks of the organized labour unions and so, for the first time in the history of the country, the government introduced seemingly unpopular policies without the labour unions and student union bodies taking to the streets to ground the economy. At the moment, the organized labour is polarized with factions, making it difficult for them to have a united voice and single position on any issue.
Of course, there was the colossal fall in the price of crude oil at the international market against the projected federal government benchmark for the 2016 budget. This, coupled with the rekindled onslaught of the Niger Delta militants who resumed bombing of critical oil installations put the government projected revenue for 2016 in grave jeopardy. Both developments apparently resulted in dwindling revenue which adversely affected the revenue allocations to the federal, state and local governments. Ironically, however, the federal government found these as ready excuses to explain the cause of the recession.
During the year, the federal government also announced a ban on the importation of some major commodities and ensured the implementation of the ban by denying the importers of these commodities purchase of dollars at the official market rate. In all, 40 commodities were banned and the Central Bank ensured that there was no forex for their importation.
Rice, cement, margarine, palm kernel/palm oil products/vegetables oils, meat and processed meat products, vegetables and processed vegetable products, poultry chicken, eggs, turkey, private airplanes/jets, indian incense, tinned fish in sauce (geisha)/sardines, cold rolled steel sheets, galvanized steel sheets, roofing sheets, wheelbarrows, head pans, metal boxes and containers, enamelware and steel drums.
Others were steel pipes, wire rods (deformed and not deformed), iron rods and reinforcing bar, wire mesh, steel nails, security and razor wire, wood particle boards and panels, wood fibre boards and panels, plywood boards and panels, wooden doors, toothpicks, glass and glassware, kitchen utensils, tableware, tiles-vitrified and ceramic, textiles, woven fabrics, clothes, plastic and rubber products, polypropylene granules, cellophane wrappers, soap and cosmetics and tomatoes/tomato pastes.
While some Nigerians hailed the government’s action, the immediate effect of the ban was the sky rocking of the price of these commodities in the Nigerian market. For instance, a bag of rice which sold for between N8000 and N8500 suddenly shot up to over N22,000. Even many other commodities which were not banned also caught the price increase bug and virtually everything in the market rose in price out of the reach of most Nigerians.
There became a severe hunger in the land. News media became inundated with reports of people scavenging from refuse bins to find leftover foods while petty stealing of food items either in market places or homes became the order of the day. People were stealing foods that were still being cooked on the fire, such stories that were never heard, not even in wartime Nigeria.
The sorry state of the Naira against the dollar cannot be overlooked in any analysis of the performance of the economy in 2016. When the Buhari administration took over power from former President Goodluck Jonathan, the Naira was hovering around N200 to N210 to one dollar. One of the APC propaganda was that they would force the dollar to come down to parity with the Naira if given the mantle of leadership. Although, they never explained how they were going to achieve that miracle, the electorate who preferred to swallow all their promises hook, line and sinker, did not bother to find out how that would be achieved in a country that is primarily import dependent.
Principally, due to all the outlined factors and poor economic calculations by the Buhari economic team made up of the Minister of Finance, the Central Bank Governor and the Minister of Budget and Planning, by the end of 2016, the dollar did a quadruple jump and comfortably soars to about N475 to a dollar in the black market and N375 in the official market. Economists are even advising business entrepreneurs to project at N550 to a dollar while others aver that if the government does not carry out a policy overhaul, the dollar may sell for N1000 to a dollar before the end of year 2017.
Emir of Kano and former CBN governor, HRH Sanusi II in a keynote address titled, “A Plan to Restore Confidence, Direction and Growth” at the policy monitoring dialogue on the state of the Nigerian economy organised by the Savannah Centre for Diplomacy, Democracy and Development (SCDDD) in December 2016, accused the CBN of violating the CBN Act of 2007 (Section 38.2) which limits advances to the federal government at 5 per cent of the previous year’s revenues, thereby endangering the economy.
He also accused the CBN of operating multiple forex policies which, he said, will make it practically impossible for investors to bring their businesses into the country.
According to him, the relationship between the federal government and the CBN has become unhealthy with the CBN claims on the FGN now toping N4.7 trillion- equal to almost 50 per cent of the FGN’s total domestic debts. He criticised the implementation of the June 2016 FX reforms by the CBN, and argued that the creation of four new market rates would defeat the objective of uniting the market in single, transparent rate. According to him, the current practice would further make it difficult to attract local and foreign investments into the country.
It is instructive to note here that the ruling APC government, particularly adept at propaganda which many now believe was the Trojan horse they deployed to conquer the erstwhile ruling Peoples Democratic Party (PDP) in the 2015 presidential election, long after their victory, continued to defend their inefficiency using the same propaganda machinery.
President Buhari, rather than accept his flaws in governance strategy has continued to blame the plight of Nigerians on what he terms the 16 years of misrule by the PDP. When he is not brandishing that alibi, he is blaming the militancy in the Niger Delta or the crash of the price of oil as the reasons why the Nigerian economy slumped into a recession and may even go into a depression.
Not once has the president or his handlers admitted that some of their policies set the stage for the current economic woes. Even when notable economic and financial experts raised the alarm about some of their warped economic policies, they branded them antigovernment. A typical example was Sanusi, who spoke out on several occasions about the policies and was called all sorts of names.
Another area which analysts criticize Buhari is his penchant for unguarded utterances which they say has the capacity to scare potential investors. They pointed to his comments especially in international media and fora alluding that Nigerians are fantastically corrupt.
According to them, no investor would be comfortable to do business with a country where most of its citizens are corrupt, especially, when the number one citizen of that country easily brands them as such. They say until the president learns to bridle his tongue all his efforts at wooing investors through his foreign trips would amount to a naught.