In 2023, Nigeria does not need an outdated economic manager


ECONOMIST John Maynard Keynes once said that “in the long run, we are all dead”. The problem with the Nigerian economy is that it is run by people who will die far too soon. When a 79-year-old man leads a country with an average age of 18, a mismatch between the government’s approach and the interests of the people is inevitable. The short-termism of the Muhammadu Buhari administration and its contempt for what is left for future generations has led us down the road to ruin. Geriatric politicians are enjoying their golden years, treating government money like their pension and neglecting the idea of ​​the legacy they will leave behind. Two announcements recently demonstrated this. First, the National Economic Council has declared that the country’s surplus crude account has dried up. Each year, the government sets a budgeted price for crude oil and when the market price is higher, the excess goes into the surplus crude account. Nigeria had over $20 billion more than a decade ago, but only $35 million remains. This cannot be explained by low oil prices, as budgeted amounts are consistently lower than market prices. In 2021, the benchmark was $57 per barrel, while the average annual price was $71 per barrel.

Mismanagement, wasteful spending and the callous reckoning that the administration is in its final year before the president is given a time limit have combined to leave the next generation without the safety net it needs. The second example is how they have accumulated problems that ordinary people will have to deal with after the administration is over. The Buhari administration’s announcement that it has postponed the fuel subsidy issue yet again is another sign of political cowardice. It’s the equivalent of not putting out the fire on a house you’re about to bequeath. Despite being oil-rich, chronic underinvestment in the downstream oil sector means we cannot refine our oil into usable fuel. This led us to import an astronomical amount of fuel. In 2020, the country managed to spend $43.5 billion more to import refined products than it earned to export crude. The cost of failing to invest in Nigeria’s refining capacity is now visible to all, as the subsidy program sends billions of dollars overseas every year and Nigeria is no closer to self-sufficiency.

Moving to a new model for the energy sector would cause difficulties in the short term as funds are diverted from grants to develop capacity, but in the long term it is the only economically sound approach. The real problem is that the current administration will be long gone before the fruits will materialize. We know what happens to countries whose leaders ignore the structural problems of subsidy regimes. Venezuela and Lebanon were both subsidizing fuel as their economies skyrocketed to the point where there was literally no fuel. But at least Venezuela and Lebanon started out as middle-income countries, while 40% of Nigerians live below the poverty line. We cannot afford to ignore the fundamentals of the economy with the reckless disregard of those who do not have to worry about what will happen in a few years. And that’s not to mention all the other long-term challenges we face, such as rising debt, environmental degradation, and job creation for a growing population.

The conclusion is clear. We need leadership closer to the generations who will live with the consequences of their policies. For starters, that should mean not selecting geriatric presidential candidates who cling to life. Instead, we should choose younger candidates who know the difficulties people face in clinging to their livelihoods. It means having someone who cares about what the country will look like in 2050, when Nigeria is the third most populous country on the planet, because they know they will live to see that day. With the approach of the presidential primaries, it is time to call on younger candidates, in contact with the people for whom they will be responsible. We don’t have time to delay the decisions we will have to live with for so long.

  • Quasim writes from Abuja.

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