WHO WILL TELL BUHARI THE TRUTH ABOUT THE ECONOMY? — 1
“President Buhari, while reminding the Ministers and CBN Governor that reviving the economy was one of the major planks on which the campaign of his party was based, expressed gladness that things were looking up after two years of serious work.”Femi Adesina, Special Adviser on Media and Publicity.
No President or Prime Minister can know everything – even if he holds ten doctorates. One lesson most Presidents soon learn, some too late, is that their top officials can and often mislead them with their briefings.
Ministers tell the President what he would love to hear not what he should know. Late President John Kennedy of the US learnt this hard fact after the Bay of Pigs disaster which his top military advisers had assured him would never fail. It did and since then, most Presidents of the US have devised a method of checking what the officials tell them. Everyday, they set aside at least one hour during which they request for the leading newspapers and read directly for themselves instead of from the clippings sent to them. Kennedy was shocked on the first day he did that to discover that some patriotic Americans had been warning government about the disaster while his officials did not bring the dissenting views to his attention. Bill Clinton went one step further. He devoted two hours a day and that was before receiving his officials. Frequently, he confronted them with the articles, editorials and news reports which they would have hidden from him in the belief that telling the truth if it is bad in not in their interest.
Buhari must understand that, once appointed to high office, people immediately develop an interest to protect – even if it means lying to the President. This is more easily done when it is known that the President does not take the trouble to collect information directly himself. So, Buhari’s meeting with the Governor of the Central Bank, the Minister of Finance and the Minister for Budget and National Planning without any prior attempt to gather information independently was bound to produce the result it did. He was assured that “things were looking up”.
But, was that the truth? Certainly, if the President had called Professor Soludo, Bismarck Rewane and Pat Utomi he would not have sent out Adesina to make the announcement he did. That is precisely the problem. Buhari we have been told does not read newspapers. He receives digests and thus becomes a captive of those undertaking the digest. None of them wants to be the bearer of bad news.
However, there are reports floating around that Buhari’s views are shaped by some individuals he trusts. All Presidents are alike in that respect. It is fine by me if Daura, Bello, Kyari and Samaila Funtua are his close confidants. That means we have people who can carry messages to him which his Ministers would not want him to receive. So, if any of them is reading this column, or their staff, they should be kind enough to tell the President that he has been deceived about the state of the economy. Things are not looking up – except, of course, the pockets of his officials.
Since Daura, Bello, Kyari, Funtua and Dr Turkur had been identified as the “Bedroom Cabinet”, which is even more powerful than the “Kitchen cabinet”, perhaps they will start by taking a few items with them when next they speak with Buhari to help open his eyes. Those are not all, but, we can start with those and develop a pattern of alternative briefing from others in addition to the official briefings.
Call it what you want, but my major concern now is Foreign Direct Investment, FDI, which is one of the measurements of an economy in which “things are looking up”. So, permit me to start with that to demonstrate that “things are certainly not looking up”.
The National Bureau of Statistics, NBS, tucked under the National Planning Minister, recently released its second quarter (Q2) report for 2017. The report stated that the foreign investment flow into Nigeria for 2017 amounted to $294.47 from January to July. But, the report did more than that. We were also informed that first half year result for 2016 was $221.2 while second half year result was $398.9. For quick reference the report is summarized below.
If we received $398.9 in the last half of 2016, July to December, and only $291.4 in the first half of 2017, can anybody even with primary school education call that “looking up”?
Furthermore, while the FDI inflows into the country were aimed at long-term investments, the bulk of the 2017 half year inflow went into the capital market to create a bubble which might collapse any time and capital flight will follow leaving us in a quandary.
Buhari’s close confidantes need not believe me, but they should talk to oil marketers owed about $2bn unpaid subsidy. They are threatening to sack employees owed as much as eight months salary – meaning Nigerians who have not received a kobo from their employers in eight months. Surely, for them, things are not “looking up”. Instead the victims look up to heaven for deliverance from government officials rendering fake reports to Buhari.
It was not only the NBS which was publishing reports giving the lie to those issuing fake reports. The International Monetary Fund, IMF, early in August had noted that preliminary data for the first half of the year 2017 indicates substantial revenue shortfalls with interest payments to revenue ratio remaining at 40 per cent as at the end of the half year. A look at the 2017 Budget would reveal ratio of only about 28 per cent. So, how can 40 per cent be called “looking up”?
Fashola had blown the whistle on revenue shortfall which others sought to conceal from Buhari. Read next week what he said.
To be continued
WHO WILL TELL THE PRESIDENT ABOUT THE ECONOMY? – 2
“Did you feel the impact of N1.3 tn FG spent on capital projects in 2016?”
NOTE: Missing from last week’s narrative was the FDI graph for 2016 to 2017. Here it is below.
FOREIGN DIRECT INVESTMENT (FDI)
$399M $291M $221M
Jan-Jun Jul-Dec Jan-Jun
2016 2016 2017
This article could have been titled FRIENDS OFBUHARI, PLEASE TELL HIM THE TRUTH. Last week, a few names were disclosed of people regarded as Buhari’s close confidantes. I repeat that it is normal for Presidents to have such people. They generally serve the President well if they tell him the truths which his Ministers and appointees refuse to disclose out of self-interest. The boast, recently, by the Vice President, that N1.3tn was spent in 2016 on capital projects is a case in point and serves as the starting point for this week’s article. According to the narrative, it was the highest in history – as long as you make no attempt to reduce N1.3tn to dollars and don’t factor inflation into the equation. Once you do, the figure loses much of its propaganda value.
That was question posed by PUNCH to five people in its August 30, 2017 edition. Let us leave for now the answers each of them gave to the question. President Buhari should have asked the first question most Chief Executive Officers with minimum knowledge of economic or finance would have asked those thumping their chests. “What was the budget for Capital Appropriation in 2016?”
The Capital appropriation in the 2016 Budget was N1.58tn; but only N1.3tn or 76 per cent was allocated to various projects and most of them received some of the votes in 2017 when the Accountant General of the Federation allowed expenditures for 2016 to continue until April 2017. Without that, actual performance might have been less than 60 per cent.
The next question the CEO would have asked is: “why the shortfall in Capital appropriation?” The correct answer would have been that a day dreamer had assumed that 2.2 million barrels per day of crude oil would be exported when the actual performance in the last five years was far from that figure. The day dreamer was cautioned by people who had followed the Nigerian economy for more than twenty years about that figure, but he was adamant. Failure followed. But, nobody took responsibility for it.
Social Welfare Programme is another project which would serve as example of how top government officials deceive Buhari. The largest single vote of N500bn was allocated to this programme expected to, among other things, feed 5 million Nigerian kids. About 40 per cent or N200bn was supposed to go into hiring 500,000 teachers and provide food for the kids in 2016. Let me quickly summarise what happened to the promises made with respect to the Social Welfare Programme.
• By December 2016 only about N80bn had been released out of N500bn or 16 per cent.
• Recruitment and posting of 200,000 teachers which the VP announced would take place by December 1, 2016 was postponed indefinitely.
• In July 2017, it was announced that the Federal Government had spent a mere N6bn to feed 2.8 million kids who cannot be located by anybody else but government officials. That is less than 5 per cent funds allocation claiming to have served 56 per cent of the kids targeted. Obviously, somebody is lying. Nowhere do you spend 5 per cent of budget and achieve 56 per cent of results.
Who will tell Baba that his legacy project – the Social Intervention Programme received only about 20 per cent of the budget allocation and the number of kids claimed to be fed is probably fraudulent – especially when Kaduna State alone accounts for 29 per cent of the fictitious kids?
Lagos-Ibadan road had been in the news for the wrong reasons. Contractors stopped work when money stopped flowing their way. But, everybody knows that. What everybody, including Buhari, does not know is that Lagos-Ibadan road is one of the smoothest in Nigeria – terrible as it is. Most Federal Roads are more deplorable. And to dampen any hope that things will look up soon, Mr. Babatunde Fashola, Minister for Power, Works and Housing had this to say.
“We had made some plans to forestall these kinds of things [death traps called roads]. We have identified 61 critical intervention spots across the country following my tour in the first quarter but we did not get the budgetary support to make the intervention.” This was on the last day of August 2017.
Should Baba’s friends still want more, let me end with power generation. On September 1, 2017, it was reported that “the total quantum of electricity lost by the 16 stations during the review period was put at 248MW as the country generated 3,411MW electricity on August 30, 2017, down from 3,659MW the preceding day”. In other words, in August 2017, more than two years after Buhari came to power, Nigeria is still generating the same quantum of power as we did on May 29, 2015.
Can any honest person call that “looking up”?
