President Muhammadu Buhari
By Biodun Busari
A leading civic organisation, BudgIT has lamented that President Muhammadu Buhari’s government of eight years had plunged Nigeria into high debt, increasing inflation and low growth.
BudgIT said this in a report titled ‘The Economic Legacy of the Buhari Administration’ issued on the eve of the inauguration of President-elect Bola Tinubu.
In the detailed economic scorecard of Buhari’s government, BudgIT said, “According to the Budget Office, between 2016 and 2022, the Buhari government raised total revenues of N26.67tn and expended N60.64tn, leaving a deficit of N33.97tn.
“The gaping hole was financed with FG domestic debt, which rose from N8.84tn as of December 2015 to N44.91tn as of June 2023, while external debt rose from $7.35bn in December 2015 to $37.2bn in June 2023.
“This excludes support provided by the Central Bank amounting to N25tn. Ultimately, President Buhari moved Nigeria’s debt profile from N42tn to N77tn. This has had attendant effects on debt servicing, which rose from N1.06tn in 2015 to N5.24tn as of 2022. In fact, under President Buhari’s administration, the debt-service-to-revenue ratio grew from 29% to 96%.”
The group also faulted the country’s apex bank over its monetary policies that aggravated people’s hardship as it said, “During the administration of President Buhari, the Central Bank extended beyond its monetary policy remit, having a firm grip on fiscal policy with its outsized role.
“In fact, CBN policies increased the money supply from N18tn in 2015 to N55tn in 2023. While it provided unrestrained liquidity to the Federal Government, the apex bank abandoned its primary mandate of price stability.
“It continued to apply blunt tools by raising the Monetary Policy Rate from 12.5% in 2015 to 18% in April 2023. This did not taper the inflation rate, which has risen to 22.5%, while food inflation galloped to 24% as of April 2023.
“Food inflation has continued to rise despite over N800bn spent by the Central Bank on the Anchor Borrowers’ Program, which has been touted to have repayment challenges.”
About unemployment, BudgIT said, “Unemployment rose from 10.4% in 2015 to 33.4% in 2020 under President Buhari’s watch as the clumsy exchange rate management—with a wide difference between the official and parallel market rates—made it difficult for businesses to thrive.”
It further said, “Buhari also prevaricated on the subsidy removal, which his administration spent at least N10tn to service. While Buhari’s government planned to have the subsidy removed as the price of crude rose; it failed to act and continued a wasteful venture that only required firm commitment to implement.
“While his administration wound up, it had the chance to seize another round of oil windfall with skyrocketing oil prices reaching $114 per barrel (April 2022) but with little incentive to do so, as CBN “printing presses” continued to flood the system with liquidity.
“Nigeria’s oil production slipped below one million barrels per day at a time when oil economies skyrocketed to an unprecedented fortune. The attendant effect is that the non-oil share of public revenues grew rapidly from 44.6% in 2015 to 59.4% in 2022.
“However, Nigeria’s spending was untargeted as several BudgIT analyses continued to show that the Nigerian budget performing below par, with agencies spending public funds without the mandate to do so, foreclosing any chances of fiscal consolidation.”