NIGERIA’s ECONOMIC WOES: How Atiku’s Model May Work

* Do away with non-essential Items

*Spend more on human and capital development

*Give #5000 to poor Nigerians

*Shun wasteful spending

By Mada S Ibrahim & Mike Odeh James

That Nigeria sinks deeper into the worst recession ever witnessed, experts have predicted that about 7 million Nigerians would be initially thrown into abject poverty.

According to the country Director of the World Bank in Nigeria, before the Covid19 pandemic, 2 million Nigerians would have regressed into poverty, however an additional million would be added due to the pandemic. The report further indicates that the human cost of Corona virus could be high.

Apart from the loss of lives, the pandemic shock alone is expected to push about 5 million more Nigerians into poverty in 2020. While before the pandemic, the number of poor Nigerians was expected to increase by about 2 million largely due to population growth, the number would now increase by 7 million.

The World Bank reports also showed that the poverty rate in the country rose from 40.1 per cent in 2019 to 42.5 per cent in 2020. Another report further showed that if Nigeria is able to withstand the devastating effects of the novel corona pandemic, the negative impact would still be felt.

According to the report, “The macroeconomic impact of the COVID-19 pandemic will likely be significant, even if Nigeria manages to contain the spread of the virus. Oil represents more than 80 per cent of Nigeria’s exports, 30 per cent of its banking-sector credit, and 50 per cent of the overall government revenue. With the drop in oil prices, government revenues are expected to fall from an already low 8 per cent of GDP in 2019 to a projected 5 per cent in 2020.’’

The report further projected that if Nigeria would make a comeback, it would be in a very small growth in the economy by 2021.

According to a financial expert, Alex Agbo, the World Bank report simply tells one of how grave the situation would be.

“It would lead to loss of employment for over 7 million Nigerians and this in turn would engender huge insecurity problems like Boko Haram, banditry, kidnappings, armed robberies and other social vices”, Alex said.

He further explained, “That about 2 million more Nigerians would become internally displaced due to the rising insecurity.”

Alex also placed the blame for Nigeria’s economy woes on the current administration.

He added that rather than take proactive steps in the first years of coming to power, President Buhari’s administration played the blame game with the People’s Democratic Party till the economy slipped into recession.

He also added that nepotism, ethnicity and outright deception have landed us here.

Patriotic Call

In spite of the gloom and doom about Nigeria’s economic and security outlooks, former Vice President of Nigeria, Dr. Atiku Abubakar, sees differently. Atiku believes the country can exit recession and get back to prosperity quickly if the handlers of the economy would take certain economic steps.

In a statement released by the former Vice President titled “We Must Exit This Recession with Precision”, the politician cum businessman stated that the country must first and foremost stop borrowing to finance non-essential items in the budget.

According to Atiku, the nation’s leaders must do away with non-emergency travels, huge travelling alliances for government officials, wasteful overseas trainings for government officials, buying nonessential equipment for government offices.

The Presidential candidate of the People’s Democratic Party in 2019 election added that “As a matter of importance and urgency, every non-essential line item in the proposed 2021 budget must be expunged.”

“For the avoidance of doubt, this ought to include estacodes, non-emergency travels, feeding, welfare packages, overseas training, new vehicle purchases, office upgrades, non-salary allowances, etc.”

He also warned on the dangers of borrowing to finance grandiose projects which may not generate revenue for the country. Furthermore, Atiku advised against borrowing to pay salaries.

He wrote “And above all, Nigeria must stop borrowing for anything other than essential needs. Again, for the avoidance of doubt, borrowing to pay salaries, or to engage in White Elephant projects, is not an essential need.”

In order to reflate the economy and quickly exit the economic recession, Atiku added that emphasis be placed on empowering the nation’s poorest citizens like giving out cash transfer of N5000 to poor Nigerians with Bank Verification Number, BVN.

He also advocated and emphasized human development such as salary adjustments for Nigerians, developing the nation’s critical infrastructures etc.

All these he added would increase the purchasing power of Nigerians and help to reflate the economy. Atiku said he received confirmation of Nigeria’s slide into recession for the second time in five years with a heavy heart. He urged that the poor economic environment could have been avoided if his ideas of cutting costs of governance were incorporated.

“This could have been avoided had this administration taken heed to patriotic counsel given by myself and other well-meaning Nigerians on cutting the cost of governance, saving for a rainy day, and avoiding profligate borrowing.”

Atiku warned that Nigeria’s proposed 2021 budget is no longer feasible as the Federal Government does not have the budget to afford heavy luxuries. He, therefore, urged the government to expunge every non-essential line items from the budget.

“We must act now, by taking necessary and perhaps painful actions. For a start, the proposed 2021 budget presented to the National Assembly on Tuesday, October 8, 2020, is no longer tenable.”

“Nigeria neither has the resources nor the need to implement such a luxury heavy budget. The nation is broke, but not broken. However, if we continue to spend lavishly, even when we do not earn commensurately, we would go from being a broke nation, to being a broken nation. As a matter of importance and urgency, every non-essential line item in the proposed 2021 budget must be expunged.”

Atiku also added that the budget must focus on essential items including human development investments and policies that increase the purchasing power of Nigerians.

“Nigeria ought to exclusively focus on making budgetary proposals for essential items, which include reasonable wages and salaries, infrastructural projects, and social services (citizenry’s health, and other human development investments).

Additionally, we have to stimulate the economy, by investing in human development, and increasing the purchasing power of the most vulnerable of our population. Only a well-developed populace can generate enough economic activity for the nation to exit this recession.”

Atiku called on a monthly stimulus package to poor Nigerians which he adds should be funded not by debt but by adding a 15 per cent tax to luxury purchases.

He explained, For example, a stimulus package, in the form of monthly cash transfers of ₦5000 to be made to every bank account holder, verified by a Bank Verification Number, whose combined total deposit in the year 2019 was lower than the annual minimum wage.

“How will this be funded? By more profligate borrowing? No. I propose a luxury tax on goods and services that are exclusively accessible only to the super-wealthy. A tax on the ultra-wealthy to protect the extremely poor.”

“A practical approach to this is to place a 15 per cent tax on all Business and First Class tickets sold to and from Nigeria, on all luxury car imports and sales, on all private jets imports and service charges, on all jewelry imports and sales.”

This would not be the first time that Atiku would be making such a clarion and patriotic call. As far back as February of this year, the former Vice President made similar calls on the Federal Government led by President Buhari to take proactive steps to prevent corona virus from gaining a foothold in Nigeria.

Atiku then made a Facebook post urging President Buhari to stop flights from countries facing corona virus afflictions. He reasoned then that if the President could shut down the country’s borders with its neighbors, it shouldn’t be difficult for the government to close air traffic to China, Italy, USA and other countries that were heavily affected by the virus.

The former Vice-President explained “Nigeria needs firm and decisive actions to prevent an escalation of the scourge. Recently, we closed our borders as an act against economic sabotage.

Perhaps now is the time to temporarily halt flights to and from any nation with a prevalence of this scourge. It is more important to secure human lives than to secure an economy. We also need to invest in early detection facilities at our airports.”

“But above all, Nigeria must not panic, whether at government or individual levels. We have defeated Ebola before, and we can defeat this present predicament.”

Atiku’s call was rebuffed by a resounding silence then. Nonetheless, like a prophet, few days later, an Italian would sneak into Nigeria with corona virus through the Lagos International Airport en-route to Ogun State.

The entry of the Italian into Nigeria heralded the novel virus into the country with devastating effects. Many experts argued that if President Buhari had listened to Atiku’s advice probably Nigeria would have not gone through the harrowing experiences today.

Still on the corona pandemic, President would later heed to Atiku’s advice and closed down Airports but it was a little too late, the damage had been done.

Not fazed by the snub from the Federal Government, Atiku donated the sum of N50 million to Nigeria to help the government fight the effects of the pandemic.

This singular act by someone who lost an election then in a most controversial circumstance endeared Ahaji Atiku Abubakar the more to Nigerians.

The Candidate with the Best Credentials

According to a Kaduna based political analyst, Danjuma Bello Sarki, “Dr.Atiku Abubakar remains first a patriotic Nigerian, then a unifier and a politician with brilliant ideas as in how to move the country forward both politically, economically and otherwise.”

Sarki recalled that in the run up to the 2019 election, “Atiku as the Presidential candidate of the PDP vowed to privatize the nation’s refineries, the ruling All Progressive Congress, APC, in turn blackmailed Atiku saying that, the policy of the PDP candidate would entrench corruption and nepotism in the oil sector. However, few months after the elections, the APC started mulling privatizing the nation’s refineries.”

Sarki explained further that in terms of sound policies, good political and economic knowledge, and political goodwill, Atiku is the most prepared of all the Presidential candidates since 2007.

For Usman Makama, a businessman based in Daura, the Adamawa state born politician is better suited to be President than the incumbent or any other candidate in 2019 or in 2023.

Makama based his reasons on the past performances of the administration of Former President Olusegun Obasanjo which saw Atiku playing major roles.

He explained that the Obasanjo/ Atiku government is still seen by many to have amassed Nigeria’s best economic team ever.

The team which included world-class professionals like Ngozi Okonjo-Iweala, Charles Soludo, Nuhu Ribadu, Nenadi Usman, Frank Nweke Junior, Nasir El-Rufai, Oby Ezekwesili was able to turn the economic fortunes of the country around and pulled Nigeria from the brink of total economic collapse.

According to Makama, the Atiku Abubakar recorded many economic pluses, among which was stable economic growth, which saw the Nigerian economy grow at 33.7 per cent in 2004, 10.4 per cent in 2003, 8.2 per cent in 2006.

“By and large, Atiku’s economic team’s greatest achievement was getting a debt relief of $18 billion for Nigeria, from the Paris Club of Creditors in 2006,” he added.

Despite all the daunting credentials, Atiku Abubakar has not been able to put his wealth of experience to use as the President, however, many Nigerians say they would vote for him come 2023.

Perhaps, just like Joe Biden and like President Muhammad Buhari, Atiku Abubakar may become the President of Nigeria after a third shot at the Presidency.

Luck, destiny, his goodwill gestures, good economic programs and the realisation by millions of Nigerians that the Wazirin Adamawa is their shortcut out of poverty will see the Turaki in Aso Rock come 2023.