Economy

FG adopting wrong strategies to address bad economy – Obasanjo, Utomi, others

Published

4 years ago

December 31, 2020

Former President Olusegun Obasanjo on Tuesday said the country was not doing the right thing to improve its poor economy and tackle poverty.

The former president, who said this in his New Year message at the Olusegun Obasanjo Presidential Library, Abeokuta, Ogun State, cautioned Nigerian leaders to stop blaming God for insecurity, bad economy, poverty and other challenges confronting the country.

Obasanjo said this on Tuesday as the President, Major General Muhammadu (retd.), urged Nigerians to return to agriculture. He said the country’s oil industry was in turmoil.

But economic experts dismissed Buhari’s statement, saying government was not serious about diversification of the economy.

In November, Nigeria entered its second recession in five years. According to the National Bureau of Statistics, in its Gross Domestic Product report for third quarter, the GDP fell by 3.62 per cent in the three months to September. The GDP is the broadest measure of economic prosperity.

Obasanjo, who sent his New Year message to Nigerians in an interview with journalists, assessed economic strategies of government. He also explained how the country could improve its economy. He stated, “When we do the right thing; We are not doing the right thing now. When we do the right thing, the economy will be what it should be.”

The former president also advised leaders to stop blaming God for Nigeria’s woes. According to him, with enormous resources available in the country, Nigeria does not have to be poor and no Nigerian must go to bed hungry.

He described 2020 as a year of many challenges, but urged Nigerians to work and pray hard in order to achieve “a glorious 2021.”

Prayer must go with work –Obasanjo

Obasanjo said, “I like the motto of a school which says ‘work and pray.’ Some people say it should be ‘pray and work’, but it doesn’t matter to me in what order I put it, but prayer must go with work and work must go with prayer.

“And I believe we need to work hard in this country as we pray hard so that the coming year, the year 2021 will be a glorious year for us. But it will not happen unless we work to make it happen.

“We do not have to blame God for our situation. We have to blame ourselves. Nigeria does not have to be poor; no Nigerian must go to bed hungry. That we have a situation like that is a choice by our leaders and followers alike. My prayer is that God will make year 2021 a better year for all of us, but it will not happen without work.”

Describing 2020 as a challenging year, Obasanjo stated, “We have gone from one form of insecurity to bad economy and on the top of it is the COVID-19. Some people, either for insecurity or for bad economy or fo r COVID-19 have gone to the great beyond, I will say those who have departed, particularly in this year of challenges, may their souls rest in perfect peace.”

I will fight food inflation in 2021, oil industry in turmoil – Buhari

Also on Tuesday, Buhari said Nigerians must return to agriculture, saying the country’s oil industry was in turmoil.

Buhari also said his regime would fight food inflation in 2021, adding that Nigerians must be able to produce their food.

According to a statement by his Senior Special Assistant on Media and Publicity, Garba Shehu, the President spoke at the fifth regular meeting with the Presidential Economic Advisory Council at the Presidential Villa, Abuja.

The statement was titled “President Buhari: Government will wrestle food inflation in the coming year.”

Shehu quoted the President as giving his words that his regime would keep a keen eye on food inflation in 2021 while giving a directive to the Central Bank of Nigeria not to give any money for food importation.

He said Buhari directed that the CBN “must not give money to import food. Already, about seven states are producing all the rice we need. We must eat what we produce.”

The presidential aide said Buhari wondered where the country would have found itself in view of the devastating economic crisis brought about by COVID-19 if the country had not embraced agriculture.

The President stated, “Going back to the land is the way out. We depend on petroleum at the expense of agriculture. Now the oil industry is in turmoil. We are being squeezed to produce at 1.5 million barrels a day as against a capacity to produce 2.3 million.

“At the same time, the technical cost of our production per barrel is high, compared to the Middle East production.”

Buhari was also said to have emphasised the place of agriculture in the efforts to restore the economy but agreed that measures must be put in place to curtail inflation in the country.

“We will continue to encourage our people to go back to the land. Our elite are indoctrinated in the idea that we are rich in oil, leaving the land for the city for oil riches.

“We are back to the land now. We must not lose the opportunity to make life easier for our people. Imagine what would have happened if we didn’t encourage agriculture and closed the borders. We would have been in trouble,” the President added.

According to the statement, the meeting, which was for a review of, and reflections on the global and domestic economy in the outgoing year, was attended by the Vice President Yemi Osinbajo, as well as ministers of finance and humanitarian affairs. It agreed on a number of measures.

The statement read, “In specific terms, it noted the sharp deterioration in international economic environment and its impact on Nigeria’s continuing but fragile economic recovery; that Nigeria’s economic growth continues to be constrained by obvious challenges including infrastructural deficiencies and limited resources for government financing. It emphasised the need to make the private sector of the economy the primary source of investment, rather than government.

“The meeting reviewed progress towards structural reforms in response to the economic crises, including the institution of the Economic Sustainability Plan, the changes in electricity tariff and fuel pricing regime, the partial re-opening of the Land Borders, the movement towards unification of exchange rates and budgetary reforms through Finance Bill 2020 and 2021.”

Govt not serious about diversification – Utomi

Meanwhile, economic experts have dismissed Buhari’s promise to tackle food inflation and encourage agriculture next year.

A Nigerian professor of political economy and management expert, Pat Utomi, said the government plans for diversification had become a refrain, something he said he had been hearing since he was a graduate student in the 1980s.

He noted that the government had always been insincere about a diversification plan from oil.

He said, “This refrain about agriculture has been going on for at least 35 years that I know of. As a graduate student in America in the 1980s, I was at the airport in New York and I saw Times Magazine and News Week had the same headline that oil prices as a result of the Iranian revolution had crossed the mythical $40 per barrel that was not possible.

“Within a few months, oil prices began to crash again. The economy was in a serious crisis in 1982 and at a time, Nigeria did not sell any barrel of fuel again.

“Over those years, the refrain of the Nigerian government has been to diversify away from oil and every year, nothing serious was done about it. You know when a country is going by a long term vision, then you will deduce if it will be dominant in the world.

“Nigeria never managed to put any prospective plan that will show a future to be built on the agricultural value chain. So whenever, I see a budget speech, I just decide that we are jokers and not serious about where we are going.

“The basic logic is that those who have run Nigeria are revenue driven, seeking easy cash to do the little they can and move on. There is nothing futuristic in the plan of Nigeria.

“Whenever there is a crisis like the times we are in now, we hear talks of diversification. The moment there is a rise in oil prices, we return to our bad habits.”

Suggesting a way forward, the professor said the citizens should get serious and honest people to rule.

We are facing hunger, insurgents dislodging farmers – Mailafia

On his part, a former Deputy Governor of the CBN, Dr Obadiah Mailafia, said it was no longer sustainable for the country to rely heavily on crude oil revenues.

He said, “That model is no longer going to work. Our public finances are on the verge of collapse. So, in that sense, I agree with the President on the urgency of what needs to be done. But by just saying that we should all go back to agriculture, it is a mantra that we have been hearing over the years and it is no longer interesting.

“Many farmers are finding it difficult to go back to their farms because of rural banditry. Just recently, we saw how insurgents slaughtered many farmers in Borno. What we are facing is looming hunger. There is hunger in the land. Food prices are getting out of control; the supply side is affected.

“Secondly, I think it is too simplistic to say, ‘Go back to agriculture.’ The kind of agriculture we are doing is not even sustainable. What will save this country is an agriculture-led mass industrial revolution that engages surplus labour both in the rural and urban areas through the process of industrialisation using agriculture as the base.”

Mailafia stressed the need for rural infrastructure, such as roads, rail and power, as well as access to affordable inputs, affordable credit and institutional support services.

A professor of Economics at the Ekiti State University, Abel Awe, described the budgetary allocation to the agriculture sector as “abysmally low”.

He asked, “Who are the people that will go to farms? What stimulate packages does the government have to encourage them to go back to agriculture? If they are ready to go to farms, is the government ready to create the enabling environment? What of the issue of insecurity and harassment by herdsmen?

“People cannot go farms these days because of insecurity. The President said we should go to farms; has he addressed the insecurity there? We say people should go to farms; how secured are the farms now? Look at the Middle Belt now which is the food basket of the nation; do you do agriculture in a terrible environment?”