Former President Olusegun Obasanjo on Wednesday lambasted President
Goodluck Jonathan’s administration over the state of the country’s
economy, saying government was deceiving Nigerians with its claims of
fantastic economic growth.
“What the public know or see of the
economy is not what the economy truly is,” the former president told
guests in Abuja at the public presentation of an autobiography of the
former Chairman Independent Corrupt Practices and other related Offences
Commission, ICPC, Mustapha Akanbi.
“The economy is in the
doldrums, if not in reverse. The often-quoted GDP (gross domestic
product) growth neither reflects on the living condition of most of our
people, nor on most of the indigenous industries and services where
capacity utilization is almost 50 per cent,” he added.
The
Finance Minister, Ngozi Okonjo-Iweala, had said during a recent media
briefing in Abuja that “in spite of global uncertainty, the country’s
economy continues to evolve with dynamism, stability and resilience
riding on sound macroeconomic management, even in the face of oil price
and quantity shocks.”
According to Mrs. Okonjo-Iweala, the
government’s strong macroeconomic management capacity had resulted in
the country’s GDP growth (estimated at 6.5 per cent in 2013) being one
of the fastest in the world (26th), with the recent GDP rebasing making
the country the largest economy in Africa ahead of South Africa.
But the former president said the recent developments around the economy
as a result of falling global oil prices are indications that such
claims of superior economic performance are a farce, particularly the
management of the proceeds from oil and gas resources, which shows the
country did not adequately prepare rainy days.
He blamed the poor
economic situation in the country on corruption, adding that the
non-investment and disinvestment in the oil and gas sector by the major
international oil companies had added another dimension to the issue.
Nigeria’s continued heavy dependence on oil resources, he noted, had
not adequately prepared the country against any shock, pointing out that
with the $78 per barrel benchmark proposed in the 2015 budget, it was
clear the country would be in a bind if oil price fell to $75 per
barrel.
“We had not adequately prepared for the rainy days in the
management of proceeds from oil and gas resources. With crude oil
purchase by the U.S. from Nigeria going down by some 30 per cent in the
last three years as a result of shale oil revolution, things are not
looking up in the oil and gas sector, and hence, in the economy,” he
noted.
Referring to the prediction by the International Energy
Agency, IEA, that global crude oil price would continue to fall through
the first half of 2015 and even to the end of the year, Mr. Obasanjo
said with the shale oil revolution and U.S. self-sufficiency in energy
as well as possibility of her becoming a net exporter, the country must
re-strategize to survive.
If nothing is done to check the
situation, the former president said the country may in future find it
difficult to fund its budget and may have to borrow to pay salaries and
allowances.
Revenue allocations to states and local governments,
he noted, had already drastically reduced in recent times, with capital
projects at all levels drastically cut or stopped.
Though the
Central Bank of Nigeria, CBN, on Tuesday announced the immediate
devaluation of the Naira by 8.38 per cent to stem crashing value of the
national currency, Mr. Obasanjo warned that sooner or later the country
may be compelled to drastically devalue again without any benefit to the
commodity economy.
“We will all sink deeper in poverty, except
for those who have corruptly stashed money abroad and who will start to
bring such illegal and illegitimate funds back home to harvest more
Naira. All the economic gains of recent years and the rebuilding of the
middle class may be lost.
“In the end, more businesses will close
down, business men and women, entrepreneurs and investors will incur
more debts. Foreign investors may temporarily stop investing in a
downturn economy. Because of the Naira depreciation, workers,
particularly in the public sector, will ask for pay increase, which may
be justified, but will sink us deeper in the swamp.
“The
scenario, which may sound alarmist, is hard to imagine, but the signs
are there, and it would appear that those who should act are dancing
foxtrot, while their trousers are catching fire,” Mr. Obasanjo said
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