When a leader fails to interpret the economic data of reality
When a man does not understand the fundamentals of economics and management he can never make sense of the disaster trailing his pocket, and that was the sad story of GEJ and his administration….he was a leader that didn’t understand and know the fundamentals of power of statistics in economics. With a recent interview at the National Democratic Institute in The United States of America on Tanzania and Nigeria, while trying to exonerate himself and his administration from corruption, it clearly showed that the past president still does not understand the fundamentals of the nation’s economy.
With Data and statistics you can always measure everything and speak with facts!…
Yes there have been corruption in Nigeria in the past but no regime or government has been so callous to destroy what was on ground and the opportunities afforded at a particular time.
Let’s go back!….
In 1980 Nigeria’s GDP was just USD$64.2 billion, by 1990 the GDP was rebased and the new official GDP was USD$262.6 Billion. This was a stunning 309% increase over 10 years with an annual average of 30.9% increments. Between 1990 and 1999 the economy only grew at an average of 2% per year making it the most stagnant period after the economic growth of Nigeria between 1980 and 1990. What we suffered during this period was the consequences of the wasteful years of IBB and his economic woes.
In 1999 when Gen. Abdulsalam handed over power to President Olusegun Obasanjo there was only USD$4 billion in the Foreign reserve, between 1999 to 2007 when OBJ left, he had built up the foreign reserve to USD$60 Billion and leaving another USD$40 Billion in the Excess crude oil account. So in essence between the foreign reserve and the Excess crude oil account, Nigeria had USD$100 Billion.
Remember that within this period too, OBJ through his Economic team was able to pay off The London Club and Paris Club debts.
By 2013, Nigeria once again rebased her GDP and the new figure was USD$509 Billion which meant the economy grew by 94% in 13 years, with an annual average growth of 7.2% surpassing the world average. In fact Nigeria’s economic growth was only third next to China and India….
Between 2003 and 2004 the economy grew at an average of 10% when Nigeria introduced the GSM phone earlier and its subsequent expansions and the massive concentration of the economy in the service sector.
OBJ concentrated the efforts of his administration on the Macroeconomics sector…..that is: by shoring up our dollar reserve, paying off our foreign debts and diversifying the economy from the resource sector to the service sector we can reduce the rate of the dollars before concentrating on the microeconomics sector.
The Microeconomics sector will need the reduced rate of the dollars to develop because it will have to import the various machines and equipment it would need for small scale industries to start operating.This was clearly shown in the dollar rate then, when Soludo assumed office the Naira was N147 to the dollar and by the time he left office with all the Macroeconomics they had solved the Naira had reduced to N117 which was a massive plus for the microeconomics sector.
When GEJ came into government, he was able to sell crude at an average price of USD$110 per barrel for 5 years with the budget pegged at USD$76 per barrel which meant more than doubled the profits Nigeria was earning from crude sales.
THE BAFFLING QUESTIONS:
OBJ’S years in office was marred by corruption which he tried to cub….but OBJ was able to do those things that he did despite the fact that crude oil was not that expensive then, so where did all the money go?……
In 2014, Federal Inland Revenue Service (FIRS) generated about N4.6 Trillion and the Nigerian Customs about N1 Trillion, between the Nigerian Customs and FIRS Nigeria generated about N5.7 Trillion yet our Budget for the year was N4.6 Trillion, leaving us with N1 Trillion budget surplus.
In the same year, on OPEC website Nigeria sold Crude oil worth about USD$90 billion and using the equivalent of the Naira value then will give us about N13.9 Trillion. So between the NNPC crude sales, the FIRS and the Nigerian Customs, Nigeria generated about N20 trillion in 2014 alone….other ministries and government agencies that generate revenues have not been added.
If the resources were well utilized during GEJ’s years we won’t be in this mess today!….Prof. Charles Soludo once wrote that within the GEJ’s years the Foreign reserve should have hit between US$120 to USD$ 130 Billion and the Naira Value increased against the dollar to about N70 to N80 if the economy was well managed and that’s the absolute truth. And he went on to say about N30 trillion had been wasted under the GEJ administration, only those who know how to read figures and economic trends will understand his theory.
When GEJ left office Nigeria had barely USD$ 35 billion in the Foreign reserve with all the money in Excess crude oil account gone!…… If the economy had been better managed we will not be suffering what we are going through today……Sanusi Lamido Sanusi clearly warned of the dangers ahead in 2010 when they started depleting the foreign reserve.
Exactly how IBB destroyed the economy in the 80’s when the economy grew at an average of 30% per year between 1980 and 1990 and the consequences of the after effect of what we suffered in the 90’s is resurfacing again because of the carelessness of one man!……..