Special Report By Dr. Dele Sobowale
INTRODUCTION
“People do not seek superficial answers to hard questions. Nor do they want the broken, unimaginative, failed promises repackaged and fed to them.” Then Presidential Aspirant, Bola Tinubu, in RENEWED HOPE, p 2.
Ordinarily, I have avoided getting involved in the mania for performance assessment of Presidents and Governors after 100 days in office, especially those newly elected to the position; and for good reason. Worldwide, politicians running for office tell the people what they want to hear; not what they will do when they eventually get into office.
Failed promises by politicians are as common as salty water in the ocean. But, my Saturday Editor wanted an appraisal.
He is boss. Consequently, I took out my copy of RENEWED HOPE, Tinubu’s set of promises, just to keep in my archives for a book in the future. Of one thing I was certain, even before reading it for the third time; many of the promises will never be redeemed.
Again, the reasons are simple. Tinubu has never worked at the top levels of the Federal Government; so he knew next to nothing about how that complex system works. Furthermore, Buhari had kept him totally uninformed about what they were doing. He arrived on the job absolutely ignorant of what he would inherit.
Nigeria is not Lagos State. He should have learnt from the utter failure of his former subordinates in Lagos State – Osinbajo, Fashola, Lai Mohammed and Fowler – who served under Buhari; and all of them ruined their reputations. He was taking on an assignment for which he was ill-prepared – judging from the RENEWED HOPE document.
PROMISES, PROMISES, PROMISES
“Our party, the All Progressives Congress (APC) was founded on the premise that the people of our beloved country are entitled to the benefits that only progressive governance can procure.” Front cover of RENEWED HOPE.
Among the promises made in the Manifesto was this one. Under the sub-head “Ensure stability of Petroleum Product?) Supply”, the following promises were made on page 37.
•Achieve stability of petroleum product(?) supply by fully deregulating the downstream sector and ensuring local refinery capacity will meet domestic consumption needs.
•We shall phase out fuel subsidy yet, maintain the underlying social contract between government and the people.
•Our planned approach not only mitigates the price effect of deregulation but will also result in the significant expansion of public infrastructure and improvement of public well-being.
On May 29, 2023, President Bola Tinubu announced that “subsidy is gone”. He therefore fulfilled one promise. But, there were other promises in just that part of a Manifesto dripping with more promises.
Two unfulfilled promises immediately stand out from about six. On Monday, August 14, 2023, various newspapers reported that the price of fuel, meaning petrol, might jump to N720/litre, with no end in sight. In addition, Nigerians were told that Marketers have suspended fuel imports – leaving NNPCL as the sole importer.
For the consumer, “stability of petroleum products” has three dimensions – price, quantity and quality. So far, we have not had a major quality issue. But, in a situation in which the price remains perpetually unstable and escalating, it is difficult to see how “improvement of public well-being” is being promoted. Right now, most Nigerians are living in quiet desperation on account of current fuel prices. It will be extremely hard for them to think of life with N720 per litre.
Meanwhile, what happened to the promise to ensure “local refinery capacity will meet domestic consumption needs?” Till today, Tinubu has not uttered a word about Nigeria’s so-called four refineries.
Again the reason is obvious. What Nigerians and Tinubu call refineries are scraps of metal and electrical wires compared to modern refineries. The “youngest” is about 35 years old.
They are not cost-effective entities and all the previous governments from Abacha to Buhari have merely used them as ATM machines to siphon public funds into the private pockets of the “elites of elites” – to borrow Tinubu’s own words.
Billions of funds – dollars especially – have been approved by Heads of State from Abacha to Buhari for Turn-Around—Maintenance, TAM with nothing to show. Buhari’s overhaul was scheduled to be completed in 2024. The money is gone.
Obviously, Tinubu’s entire approach to subsidy removal and repercussions were built on the shaky foundations of refineries which cannot produce products for domestic consumption any time soon.
Furthermore, even working at 100 per cent capacity, the best the four scraps can do is to supply 18 million litres of fuel a day. But, records available indicate that even when fairly new, the best the refineries could achieve was 34 per cent capacity utilisation.
Nigerians consume at least 45-50 million litres. Dangote refinery, prematurely commissioned by Buhari will not supply a drop of fuel until 2024. Tinibu obviously does not know what our daily requirements for fuel are. Otherwise he would not place his hopes on domestic supply so soon.
FAILED PROMISES REPACKAGED AGAIN
“Having missed our way, we redoubled our efforts”.
A Boy Scout in the 1950s recounting an adventure which almost led to the loss of 27 boys in Lagos.
President Tinubu tossed off the announcement – “subsidy is gone” – which immediately closed the filling stations for about three days.
The queue was about two kilometres long in some places and it took up to three days to be served more expensive fuel.
That was the beginning of policy disarray. He had to do something in a hurry to prevent total breakdown of law and order. He announced the set of palliatives which he thought were “innovative solutions”. They were not.
They could best be summarised as: “The same stale stew warmed up and served in new plates.” (Former military leader). The major thrusts were:
•N8000 to be paid to 12 million households
•3000 Buses; running on gas to be acquired
•250,000 tons of food to be released from FG silos
•235,000 tons of fertilisers to be supplied to farmers
•FG to acquire and cultivate 500,000 hectares of land
Later, the FG and the National Economic Council, NEC, added distribution of 5 trucks of rice and N5 billion to each state. In their hurry to deliver the pittance to states, no mention was made of the Federal Capital Territory, FCT.
“A man cannot gradually enlarge his mind as he does his house.”
Alexis de Tocqueville, 1805-1859.
The package of palliatives, collectively and individually, buttress the point made earlier – Tinubu has not grown mentally beyond the Governor of Lagos State. He still has to grow to become President of Nigeria.
It is a fact that since leaving office as Governor of Lagos State, he had not been involved in the issues which have been shaping the world and our lives in Nigeria – global warming, rising floods, loss of diversity and the increasing threats of AI and social media. RENEWED HOPE was a series of essays written by people so far removed from government as to make most of the submissions very amateurish.
Only a President with very little hand on and current experience in the FG could have regarded the acquisition of 500,000 hectares of land by the FG as a novel idea.
Obviously, he had never heard of the National Agricultural Land Development Authority, NALDA, which was the first such large scale attempt by the FG to acquire land and undertake agricultural production directly.
It was established by the Babangida administration in 1992 and was lately revived by Buhari – after being largely abandoned by other governments after IBB. NALDA was mandated to acquire 50,000 hectares in all the Local Governments of Nigeria – all 586 of them – at the time. Obviously, 500,000 hectares is insignificant compared to the vision in 1992 when the population of Nigeria was less than 100 million. Now, the population is estimated at 220 million; 500,000 hectares will just feed about nine million – if acquired and well managed.
The Land Use Decree 1978 also stands in the way of the ambition. All land nationwide is under the absolute control of the State Governor. Most of them are reluctant to give up land – for FG agricultural projects. Tinubu will spend the next four years without acquiring one tenth of the land he so glibly promised.
He should ask Buhari why RUGA and Grazing Routes programmes failed. Anyone expecting food from the 500,000 hectares, might as well dig a grave now.
MISSING THE POINT: REVENUE GENERATION IS OUR PROBLEM
“Nigeria loses N249bn in July as oil output drops.”
Report, August 21, 2023.
That report should jolt the FG. In just two months we lost more revenue than what the government promised to give to all the thirty-six states.
The report went on to say that “Data obtained from the Nigerian Upstream Petroleum Regulatory Commission, indicated that while the country’s total oil production in June was 37.5 million barrels, it dropped to 33.5 million barrels in July.” The report did not go far enough to underline the depth of our predicament.
The 2023 Budget was based on production and export of 2.3 million barrels per day or 69 million barrels per month. That was actually the sort of self-delusion which characterised the Buhari administration. The Organisation of Petroleum Exporting Countries, OPEC, pegged our quota at 1.7 million per day; or 51 million barrels per month.
Thus in June, we exported 13.5 million barrels less; and in July, it was 17.5 million barrels less than budgeted.
The price of crude averaged $80 per barrel; meaning that $1.08bn was not earned in June and $1.40bn negative variance was generated in July.
Granted, August has not ended; but I have been following the trend since the beginning of the month; and at best, we can expect the June performance to be repeated. Thus, Nigeria has earned approximately $4bn less than we budgeted in the first three months of Tinubu’s government.
If Tinubu wants to know why exchange rates will not come down soon, he needs not look further than the crude oil dollar revenue shortfall.
LESSON FROM A SAGE
“The first duty of every government is to generate enough revenue to execute its programmes; as much as possible without borrowing.” Late Chief Obafemi Awolowo, 1978 in unplanned interview.
In 1978, I was involved in working as a researcher for the Unity Party of Nigeria, UPN – led by Chief Awolowo. I worked under late Dr Tai Solarin; who was my father’s friend from the time they served in the Royal Air Force during World War II. One day, I arrived early for our briefing with Awo; and for the first and last time in my life, I had the sage to myself. As an economist, one question I asked was: “’Sir, how was it possible for you to manage Nigeria’s finances during the war without borrowing?” Papa spoke for about five minutes; but he repeated three times the statement above. He elaborated on how to go about it.
For eight years, BUHARI, who promised very little and has delivered less, wrecked not just the economy, but also, the entire society by his absolute ignorance regarding the primary role of money in government. Buhari relied on borrowing not revenue generation.
Everything else – security, education, infrastructure, health services, transport etc – depends on a government generating sufficient revenue on its own before turning to borrowing. And, borrowing principally must be undertaken advisedly for investment; not for consumption and sharing. In fact, every investment must aim to repay the loan taken for it. Buhari messed up everything. He neglected revenue generation; went borrowing every time.
Furthermore, since, sometimes, the lion’s share of a nation’s income might come from one source or two (cocoa and palm produce in the old Western Region), that is what deserves the President’s attention; that is the egg basket that must not be dropped. Awo told me that the Cocoa Research Institute, CRIN and the Nigeria Institute for Oil-Palm Research, NIFOR, were established, with borrowed funds, to strengthen Nigeria’s global competitive positions in those sectors. “We never borrowed to pay salaries; workers must generate the funds with which they get paid. That way corruption was reduced to the barest minimum. Crude oil was the “egg basket” which the Buhari government dropped everyday for eight years; and which Tinubu is dropping now.
Tinubu, unfortunately, has not only inherited a terrible situation; he has also subscribed to a ruinous habit of focusing on distribution of revenue that has not been earned; and may never be earned.
Not once in three months since he was sworn in has Tinubu mentioned revenue generation as a problem deserving his attention. That is why he is unaware that Nigeria’s record of oil exports in the last three months was the worst in over 12 years. We are not maximising our revenue generation from the only source which still has a great deal of elasticity to it. Yet, unless we can somehow get oil export back to 1.7 million barrels per day, Tinubu might as well return to Lagos.
Nothing else he does will save his presidency from being another four years like a parade of mourners – following Buhari’s eight disastrous years.
MDAs: DEN OF ROBBERS FROM THE GATE TO THE TOP
“I always look very hard at any one above suspicion.” Agatha Christie, 1890-1976.
The Federal Character Commission, FCC, now exposed for the corrupt practices which have become routine symbolises virtually all MDAs. Some might have been surprised that at the gender of who heads it. But, corruption in public service cuts across positions, gender, religion, age, ethnicity, state of origin. I have gone through the Report of the Auditor General of the Federation, AuGF, for several years – 2014, 2017, 2018 and 2019 particularly. One cannot help wondering if anybody, particularly the President reads them. Perhaps, because fish rots from the head, and the Presidency is also an annual serial offender, Nigeria’s head of government would rather go and borrow than retrieve the almost N4 trillion allegedly mismanaged in 2019 alone.
The Ministries, Departments and Agencies, MDAs, individually and collectively represent the second sources of large revenue generation. But, for decades virtually all the units that could be corrupted have been. Embezzlement of public resources takes three forms.
Stealing directly from votes, sales, levies, taxes or assets, is so common, nobody is shocked when any staff is caught. Collecting funds for goods and services not delivered and short-changing government by allowing customers to pay less for services – then splitting the difference is another one. Collecting funds for conferences and workshops not undertaken or attended is another favourite scam yielding hundreds of billions into directors’ pockets – while permanent secretaries receive their share. In Nigeria, a honest Public Servant is an oxymoron – a contradiction in terms.
Tinubu has not addressed how to get more revenue from MDAs and thereby reduce borrowing. Incidentally, the MDAs generating dollars – NPA, FAAN, Customs, NCC, Immigration, EFCC etc – which account for the second largest sources of revenue, are invariably the most corrupt. Dollars belonging to government drain into private pockets. Again, unless Tinubu can get MDAs to deliver on their revenue budgets, he will add a great deal to the debt burden Buhari left behind. He has already added to the payroll bill without determining how he will generate the funds to pay them.
FOREX FARAGO
“You can’t bully reality.” Anonymous.
Economic principles respect nobody. The President and the pauper get disciplined by the laws of supply and demand. The reason we don’t have disagreements over the air we breathe is because the supply is inexhaustible; everybody alive takes as much as they want. No President can allocate it. By contrast, supply of foreign exchange is infinitely elastic. A country’s exchange rates are favourable when it earns more dollars than it spends on imports and to pay other bills. The wider the gap between dollars supplied and demanded, the higher the exchange rate. There are only two ways to bring rates down. One is to bring in more forex than is required; create surplus. The other is to reduce demand. A surplus is still created. None of these has been done. Nigerians will wait until hell freezes before exchange rates will come down.
Since 2015, the balance of trade and remittances had been negative for Nigeria. It got worse in the first 100 days of Tinubu. Hence, the rise in exchange rates. Instead of bridging the gap by bringing more dollars, the FG had lately resorted to bullying BDCs. Jolted by the trend towards N1000/US$, the FG took a two-prong approach. It sent the CBN and EFCC to harass BDCs and abokis; then it was announced that NNPCL was bringing in $3 billion to help stabilise the exchange rates. Both measures were exercises in futility.
Jailing all the BDCs and abokis will not increase dollar supply; and the $3 billion intervention by NNPCL was a drop in the bucket compared to the existing demand for dollars. Let me repeat one more time to FG, CBN, DSS and EFCC that the only solution to dollar scarcity is more dollar supply or less dollar demand. That is reality. The efforts so far amount to bluffing.
A WOEFUL BEGINNING “Morning shows the day.”
If this be the morning, then we must tremble at what the day will look like.
In his first hundred days, Tinubu has turned his back on what would save us.
Instead, he has concentrated on the things that will add to our problems. Appointing 48 Ministers in a poor country is no laughing matter; it is because Nigerians have become so adjusted to serious pain that we are not crying on the streets. Which other country in the world comes close. Russia and Canada have the two largest land mass; USA and China are the two largest economies and India and China have the largest populations. None has up to 20 Ministers. What can be the rational basis for 48 Nigerian Ministers? Each Minister will have a Permanent Secretary, Directors, Special Assistants, Police escorts, drivers, house and housekeepers, as well as security guards on three shifts. It breaks the heart to realise that Nigerian government has been reduced to this in 2023.
This mind-boggling new experience has affected journalists badly. Journalists, columnists and editors working for a national newspaper spent the last eight years carpeting Buhari for appointing 42 Ministers. The appointment of 48 Ministers has left them absolutely dazed. They can’t praise it without being called hypocrites. They dare not criticise it without losing their jobs.
I am certain, few, if any, of the Ministers would have approved of a 48-member cabinet – if he is not one of them. To that extent, they are not being honest with the President and fellow Nigerians. They are not even being honest with themselves. That is the ultimate tragedy; knowing you are part of the problem.
STOP PRESS. ANOTHER BOGUS PROMISE ON POVERTY ALLEVIATION.
“What is most important is that we will keep our focus on lifting 133 million Nigerians out of poverty.”
Betta Edu, Minister of Humanitarian Affairs and Poverty Alleviation.
Horrible lies have started dripping out of official lips. Minister Edu, forgetting that the government was elected for four years, was promising the greatest social transformation miracle the world has ever known. Simple arithmetic would have cautioned her. Lifting 133 million out of poverty in four years means 33.75 millions every year until 2027. Obasanjo and Buhari promised less and delivered nothing. Already fuel subsidy removal and naira devaluation have driven more Nigerians into poverty in three months than ever before in our history.
Question to Madam Minister: How stupid do you really think we are?
@Vanguard
