President Muhammadu Buhari inherited an economy on its way down in May of 2015, no thanks to the plunge in the global price of oil.
What he did after became a classic example of how not to run an economy in peril.
Here are five of the worst ‘Buharinomics’ we’ve been blessed with in a year:
Buhari vows not to devalue the Naira
President Buhari vowed not to devalue the Naira in the first and second quarters of 2016, sending foreign investors and the market into panic and uncertainty.
For investors, it was the clearest indication that the number one citizen of Africa’s largest economy, was interfering with monetary processes and the Central Bank operations.
It wasn’t Buhari’s call to make. But he did.
The Naira slumped in value soon after, speculators made a killing, the market slipped into uncertainty and inflation reached for the moon.
And Nigeria is yet to recover.
With price of oil plummeting in the international market and with Nigeria’s biggest foreign exchange earner being crude oil, every sane economist in the land suggested deregulation of the downstream sector as an immediate policy response.
Allow the market determine the price of the product.
Nigeria was exporting nothing else but oil. The economy is embarrassingly import dependent.
As with everything Buhari, it took months for the Presidency to yield to commonsense.
By the time a partial deregulation kicked on in May, the economy was already heading south.
It also took a biting petrol scarcity and more hardship on Nigerians before Aso Villa did the needful.
The shocks in the system got further amplified and the domino effect of a sudden hike in pump price of petrol was felt in commodity prices.
It was inevitable.
Buhari’s foot-dragging and inability to read the headwinds correctly, had plunged the economy into a tailspin from which it hasn’t recovered.
Float or not
President Buhari has been meddling in the affairs of the Central Bank of Nigeria (CBN).
Investors don’t like that and have been voting with their feet.
The Foreign Exchange (Forex) market has been in turmoil no thanks to a meddlesome Presidency.
The Naira’s value was depreciating faster than the hair on this writer’s pate, but Buhari vowed to peg the exchange rate instead.
“Devaluation will kill the Naira”, Buhari said, “I won’t kill the Naira”.
So, he defended the Naira instead.
In June, the CBN and the Presidency ate their words and ‘floated’ the Naira.
But the float has been a scam.
The CBN in cahoots with the Presidency, has been rigging its own Forex market and the country currently operates some four Forex markets.
A recipe for disaster and chaos any day.
DSS raids Bureau De Change markets
Picture this–you announce that you are operating a free market in a bid to restore damaged investor confidence.
But soon after, you commission stern looking and gun wielding Department of State Security (DSS) personnel to raid Bureau De Change outlets in a bid to force the local currency to exchange at a certain rate against the dollar.
You got that right.
Only Buhari could have come up with something like this.
Forex dealers hoarded their hard currencies and the black market thrived.
Cue in more shocks in the system.
Portfolio investors who were looking for more signs to remain skeptical about the Nigerian market, were on the run again.
Buhari has kept them running since May 2015.
Monetary and fiscal policy not in sync
Finance Minister Kemi Adeosun says one thing,CBN Governor Godwin Emefiele says another.
Emefiele maintains interest rate and sticks with his Monetary Policy Rate (MPR), Adeosun wants interest rate lowered.
You want your economy to rebound and yet your fiscal and monetary arms are singing from different hymn sheets?
Gimme a friggin’ break!
In other news, Minister of Budget and National Planning, Udo Udoma, has been submitting shoddy budgets and Medium Term Expenditure Frameworks (MTEF) to a national assembly which has made a pastime out of turning them back to the Executive.
Exactly how you restore an economy.
No, exactly how you kill an economy.
Well played, Buhari: Jonathan may have brought us here, but you’ve done very little to get us out.
Let us pray.