Buhari Under Massive Fire Over Nigeria’s Economic Recession

The British Broadcasting Corporation (BBC) reported on Wednesday, August 31 that the Nigerian economy has finally fallen into recession. The British news agency reported that latest statistics showed that the economy shrunk again around the middle of the year. “Nigeria has slipped into recession, with the latest growth figures showing the economy contracted by 2.06% between April and June. “The country has now seen two consecutive quarters of declining growth, the usual definition of recession,” BBC reported.

But the news has rubbed Nigerians the wrong way. Many of those who commented on the official page of the British news agency lashed out President Muhammadu Buhari for allowing such a terrible fate to befall the country in just 15 months. Some accused Buhari of being too old and out-dated in his methods of running the economy while others believe that his seeming lack of ideas put Nigeria in this situation. “Nigeria was first in recession when this Chronic-Illiterate was head of state (1983-1985)…; and now… just ONE YEAR into a 4year tenure, Nigeria is BACK in recession… What a ‘change’ #BuhariResign!” a user, Patrick Osikemhekhai Azelakeh said. Eddy Obinwa said, “What did u think b/4 when we ave a president @Mbuhari @Nigpresident who doesn’t even know what modern age is all about apart from sending his kids to schools abroad while promising his fellow Abokis some f**king change which they cant even spell within 3seconds…. hhahahahahaahahah (CHANGE)”
“Those re what happens when govt took the money it should used to built country economy to fought its political enemies and oppositions ,also drove away its foreign investors with its awkward policies , I’m not surprised ,i saw it coming , i said it but some people claimed tht i was speaking out of hate , but today all re in the same sinking ship ,with confused leaders,” Eloo Mistai Cocel Agbasi wrote. “When a wicked man rule the people suffer. That’s what Nigeria is experiencing today. The man only wanted to have the power. Now it has been given to him but the rest is history. Hopefully Nigerians will gain their senses back soon or else the future generations will not forgive us,” Adeiza Momoh said.
“You can’t vote an illiterate into power and expects him to perform magic,” Arthur Okafor said. Others lamented the exit of ex-president, Goodluck Jonathan under whom the economy grew in size and was rated Africa’s largest. “I’m weeping for those who voted against GEJ,” lamented Jacob Amid-yere Adombire. “The name buhari means retrogression this man is a sadist the is what you imperialist brought upon the country Nigeria was a thriving nation in the last 10yrs before the puppet of the west,” Joe Nest said. “The difference between Jonathan and Buhari is that Jonathan is Goodluck while Buhari is badluck to our economy,” Onwe Uchechukwu Emmanuel wrote. “…We have two economies in Nigeria. One for d poor and d other for d elites and those in government. It is d one for d poor dat is in recession,” Andy D’great Emmanuel said. “Useless propaganda party and Old school tyrant are just the worst thing that happened to us in 2015,” Solugo Solugo said. “Worst recession in decades. Worse still is that the government is clueless on how to redeem the situation,” Charles-Owaba Daniel noted.
You will recall that the senior special assistant to the vice president on media and publicity, Laolu Akande recently refuted media reports that President Muhammadu Buhari sought emergency powers to tackle the economic recession. In a statement distributed to media houses last night, Akande said the economic management team which Vice President Yemi Osinbajo heads, was still considering several measures to urgently reform the economy. This he noted has not yet been communicated to the president. According to him, those measures had also not been passed to the Federal Executive Council and the National Assembly.

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Nigeria: 41 Prohibited Items Shut Factories, Cut Thousands of Jobs As Economy Shrinks

Nigeria 41 prohibited items that was announced in June 2015  have shut factories and cut thousands of jobs, said Frank Jacobs, president of the Manufacturers Association of Nigeria.
Many factory owners can still only access the hard-currency they need for importing equipment and raw materials on the black market, where dollars are more expensive than on the official one, said  Jacobs
“I don’t think there are any more dollars in the system since the devaluation,” he said in an interview in Lagos, the commercial capital, on Aug. 25. “Not much has happened so far.”
Central bank Governor Godwin Emefiele let the naira float on June 20 after a peg he imposed in early 2015 caused foreign investors to flee, starved local businesses of foreign exchange and sent the economy to the brink of recession. While the currency has since weakened 35 percent to 315.25 against the dollar on the official market, it trades at about 410 on the street and foreigners have been reluctant to start buying naira stocks and bonds.
The central bank’s decision last week to make banks allocate at least 60 percent of the foreign exchange they sell to manufacturers and importers of raw materials was “excellent,” said Jacobs, who is chairman of Jacobs Wines Ltd., which is based in southeastern Nigeria and makes wine and brandy from pineapples.
Jacobs is confident that the government will also ease a ban on importers of goods ranging from glass to toothpicks from accessing foreign exchange from banks. He has met Vice President Yemi Osinbajo and spoke to Emefiele last week to persuade them to reduce a list of 41 prohibited items that was announced in June 2015. The bans have shut factories and cut thousands of jobs, Jacobs said.

‘Making Progress’

“We are making progress” in talks with officials, he said. “I’m very hopeful that before the end of the year they’ll say something about the 41 items. Around 60 of our factories have closed in the last year. And we’re blaming it on the list of 41 items and the high cost of foreign-exchange.”
Emefiele, the former head of Zenith Bank Plc who become governor in June 2014, introduced the rules as part of a range of capital controls to protect the naira as the price of oil, which accounts for 90 percent of Nigeria’s export earnings and the bulk of government revenue, crashed.
He argued that, as well as protecting Nigeria’s foreign reserves, the restrictions would boost manufacturers by curbing demand for imports and forcing Nigerians to buy local products. Instead, the sector went in to recession last year and contracted 7 percent in the first quarter of 2016.

Wider Economy

The 41 items include “essential raw materials” that factories can only buy from abroad, Jacobs said. “Our members affected by the ban are going to the parallel currency market. It’s the only place they can buy dollars from.”
Investors have blamed the central bank’s policies for afflicting the wider economy, which shrank 0.4 percent in the first quarter. Output dropped in the second quarter too, according to all 13 analysts surveyed by Bloomberg ahead of the statistics office’s release of the data on Wednesday. The median estimate is for a contraction of 1.6 percent.
Jacobs said Nigeria’s manufacturers were further hampered by power cuts. They’ve got worse in the past year, he said, despite President Muhammadu Buhari’s pledge to double electricity generation by 2019. Nigeria, with 180 million people, produces around one-tenth of the electricity of South Africa, which has a population of 55 million. Power plants have been hit as militant attacks on pipelines reduce their gas supplies.
“Power output today is a far cry from what we had in 2014,” Jacobs said. “It’s dropped significantly.”

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