People & Money

Big Read: Could President Muhammadu Buhari End up Being Nigeria’s Lee Kwan Yew?

Here’s a pop quiz: What Nigerian Head of State oversaw the most fundamental reforms ever implemented in the postcolonial history of Nigeria’s economy and State? Was it Yakubu Gowon who led Nigeria out of a devastating civil war? Was it Olusegun Obasanjo who kicked off the Fourth Republic with a flurry of deregulations and privatisations that led to the private telecoms boom among other things? Was it perhaps Goodluck Jonathan who signed a Freedom of Information Act and introduced the Integrated Payroll and Personnel Information System (IPPIS) that finally promised a lasting solution to civil service ghost workers?

None of the above. The correct answer is Ibrahim Badamasi Babangida, aka IBB, aka ‘Evil Genius,’ aka ‘Maradona.’ Yes, I know it sounds  extremely counterintuitive to put Babangida in the same paragraph with ‘fundamental reforms,’ but that is exactly what happened. Not that he especially did anything, mind you. If anything it was a fortuitous set of circumstances that Nigeria walked into almost by accident following his ouster of Muhammadu Buhari and the subsequent project to entrench himself as a lifetime maximum ruler in the fine African tradition of Mobutu Sese Seko, Idi Amin Dada, Jean Bedel Bokassa, Gnassingbe Eyadema and Paul Biya.

Ibrahim Babangida: The Original Muhammadu Buhari

After spending the best part of two years prevaricating instead of reforming a decaying Nigerian economy, Nigeria quite literally ran out of money under Muhammadu Buhari’s leadership between 1983 and 1985. When IBB came in, there were only 2 options – go to the IMF looking for a loan or simply ‘chest’ the chaos and try to wait it out. IBB put the question to the people via a public debate and the overwhelming answer was “NO TO IMF LOAN.” The trouble with this was that waiting it out was simply not an option. This was where IBB earned his “evil genius” tag.

Instead of going directly against public opinion and implementing the IMF SAP or bowing to the will of the people and watching Nigeria’s public finances burn to the ground, IBB’s administration proceeded to design a set of policies that looked, sounded and functioned just like the IMF’s prescribed SAP. This not-SAP which did the equivalent of patting Nigerians on the head while giving them the medicine they hated, was of course tacitly approved of by the IMF.

I have written elsewhere about how the popular notion of Babangida’s SAP clone policy in Nigeria has been grossly misrepresented by our parents who suddenly found themselves dealing with a devalued currency, spiraling prices and job losses as the government cut its payroll. What I perhaps did not stress enough was that whether or not Babangida agreed to implement the now-reviled policy, Nigeria was going to basically fall on the floor and die anyway.

In addition to ending the forex crisis by opening Nigeria up to private investment and donor funds once again, the reforms that came during that crisis period ended up becoming the basis for the most radical repositioning of the Nigerian state and economy that the country has ever witnessed in its 60 years. Private broadcast media? One of IBB’s “not SAP” legacies. New generation banks? IBB’s not-SAP. Private telecoms. Also IBB’s not-SAP. In return for much needed foreign investment that kept Nigeria from falling into a Juche North Korean state, IBB’s SAP clone policies opened up state controlled sectors of the economy like broadcast and telecom to private participation. It also resulted in political changes and civil service reforms to ease doing business and aid capital movement. Check these two doozies out.

(You can read the full World Bank SAP report here.)

The Tug-of-War Years

If you read that SAP report, you’d notice that most of the IMF recommendations in it sound like they could have been made yesterday. Clearly the reform process stalled under Babangida and here is why:

(You can read this story here.)

The first Iraq War drove oil prices as high as $45 per barrel ($91 in today’s money), and this offered the ‘Evil Genius’ the perfect get-out-of-jail-free card. An IMF report later noted that IBB’s SAP clone policy failed to carry out many of the actual SAP recommendations because the cash influx now known as the Gulf War Oil Windfall allowed him to pretend that Nigeria was back in the 70s and money was no longer a problem. Instead of completing the root and branch reform, we got 3rd Mainland Bridge, a new capital city and a whole wad of money which grew legs and went for a swim – about $12.2bn to be exact. Nigeria was back to Nigeria-ing like the 70s and the good times were rolling once again!

Except – spoiler alert – they really weren’t.

Read: Buhari’s COVID-19 Economic Plan: Old Wine in New Wineskins

In 1993, Maradona failed to pull one last trick to remain in power and shortly thereafter, a surprisingly short man who liked dark glasses made Ernest Shonekan briefly contemplate his mortality, after which Nigeria’s worst-ever decade then ensued under Kano’s finest Adolf Hitler tribute act. By the time Olusegun Obasanjo came into power in 1999, Nigeria was the ideal blank slate – tremendously poor, flat broke, weary of dictatorship, and hungry for growth and systemic reforms. For a while the reforms did come and Obasanjo looked like he might actually achieve his lifelong ambition of becoming the leader who turned Nigeria’s fortunes permanently.

Private telecoms which both IBB and the Adolf Hitler tribute act failed to midwife? Obasanjo did it – flawlessly. Privatisations and deregulations to speed up the economy and free up state budget for capital investment? Obasanjo was your guy. Opening up democratic spaces that allowed Nigeria to have something approaching a free media once again? Baba Iyabo was that guy. When the perennially loss-making refineries were finally hocked off to whoever would buy them, it may have looked like Nigeria had moved from  Hitler tribute act to a Lee Kuan Yew tribute act, but oil in the noughties however, had other ideas.

Just like with Babangida a decade earlier, oil prices trended upward at the worst possible time and once again confused Nigeria about its true status as one of the world’s poorest countries. Political opposition to reforms mounted and a fellow known as Comrade Adams built a political career for himself by leading a series of nationwide labour strikes whenever an incremental attempt to reduce Nigeria’s fuel subsidy payments was made. Obasanjo was not able to finagle a third term for himself despite his best efforts, and along came Umaru Musa Yar’adua who promptly reversed as many of the reforms as he could manage in the five minutes he managed to stay alive and healthy.

When those five minutes were up, along came Goodluck Jonathan, who was aligned with Obasanjo in his pro-reform stance, but without any of Obasanjo’s engine. If OBJ was a monster truck with his agenda, GEJ was a polite Kia Picanto with a speed limiter and a baby car seat in the back. The less said about that the better. Which brings us to the retired Major General who in 2014 famously promised to protect Nigeria’s economy using the Army, Navy and Airforce.

Muhammadu Buhari: Babangida Without The Windfall

Between 1987 and 2015, oil prices maintained a generally positive trend, rarely falling below $35 per barrel. This consistently gave Nigeria just enough runway to avoid carrying out the reforms that have been recommended since the 1980s – float the naira and stop subsidising it with oil income, deregulate most of the economy and abolish corrupt import and export license regimes, simplify tax policy, reduce the size and recurrent cost of government and focus investment on education, healthcare and municipal infrastructure like power and water.

During that time, Nigeria found enough money to waste on some of the continent’s most shocking white elephant nonsensities and a bloated civil service wage bill. The government saw itself as a job creator instead of a regulator. These low oil prices however, are not going anywhere. Short of something like an unexpected war or a coronavirus vaccine from an alien civilisation delivered to planet earth with a $100 trillion alien stimulus injection, sub-$30 oil is the new normal, which puts Buhari’s administration so far in the red, Nigeria now spends 90 percent on its income on debt servicing. In my opinion, this is a fantastic state of affairs and I will explain why.

Buhari’s administration is one of several firsts. His is the first administration where a serving Vice-President has socially distanced himself from his boss’s policy position in public. It is the first time that Nigerians have grown used to having relatively high speed access to their own governance and lawmaking processes alongside the power to give scathing and direct feedback via the internet. The grassroots social media campaign that shot down the Ruga Bill and NCDC Bill among others? Not a thing prior to Buhari. Nigerians for the first time are learning to be powerful, and that’s just for starters.

Economically, Buhari has been exactly what free market capitalism ordered – an unapologetic, unvarnished, unrepentant Marxist-statist who believes in autarky and thinks that international trade is some type of moral sin. He is the economic equivalent of a disease vaccine that creates immunity by infecting people with fragments of the pathogen so they get used to fighting it. His border closures, irrational infrastructure investment decisions, unhidden lack of respect for Nigerians and Nigerian institutions, shocking ethnotribal chauvinism and his everlasting obsession with subsistence agriculture have showed him up as a stark economic illiterate.

More importantly, these evident positions have thoroughly discredited the Marxist-statist ideology that has kept Nigeria in a headlock since the 1970s, swinging back and forth between half-implemented reforms and return to the mud. No rational person who lives through 8 years of Buhari and suffers through the effects of his total lack of knowledge and engagement will ever willingly vote for a statist who has no economic plans ever again. Politically, Buhari’s rise to the presidency has been the ultimate pyrrhic victory for his political formation because for at least a generation, a free and fair election in Nigeria will not produce another “close border, go to the farm and Inshallah” merchant.

Economically, Buhari’s scorched earth administration has been a tremendous disaster of the sort that will be great for Nigeria in the long run. Up until he came in, most Nigerians had no idea that they come from an objectively poor country. Now Nigerians for the first time in the country’s history are beginning to accept that their country is poor and it needs a bigger economy – which the state cannot give them. This basic economic awareness which some countries have had for centuries is still barely a few months or years old here – and we have Buhari’s unprecedented malfeasance to thank for it.

By the time Buhari is done with his capital restrictions, excessive borrowing, railways to Maiduguri and Maradi, gas pipelines to nowhere, near-total security breakdown, economic recession and his “non awareness,” an IMF Structural Adjustment Policy will actually elicit sighs of relief, not the tantrums and howling of our parents 3 decades ago. Nigerians will actually for the first time understand their true position in the world and welcome sensible, data-driven actions to fix things, as against empty rhetoric, bloviating demagoguery and clenched fists doing mock Mandela salutes.

Through absolutely no intention or knowledge of his own, Muhammadu Buhari could end up becoming the hero Nigeria both needs and deserves as it stumbles into a future stamped with the words “debt default” on it. What the most fervent incompetence of Yakubu Gowon, Murtala Mohammed, Shehu Shagari, Ibrahim Babangida, Sani Dark Glasses and even the earlier iteration of Buhari himself could not achieve, Buhari version 2020 could very well end up doing. For once, fate may be smiling on Nigeria when it needs it the most.

A coronavirus outbreak leading to a global recession. Increased demand for electric vehicles. A looming sovereign debt catastrophe. A regional trade crisis. A severe forex shortage. Chairman Mao leading the CBN. The least competent president in Nigeria’s rich pantheon of incompetent leaders. Ferociously illiterate economic policy wherever possible. The perfect storm of circumstances would not feel believable if you made it up, but here we are.

This is happening. This is finally happening at long, long last.

P.S: This excerpt from a 1985 New York Times article might interest you.

Stop me if you have heard all this somewhere else.

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