Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM

Six Years of Economic Dislocation and Capitalist Attacks under Buhari Administration

May 29th 2021 marked six years of uninspiring rule of the Buhari/APC government. A government that emerged from the quest of Nigerians to end corruption, insecurity and poverty has become so cancerous to the very existence of Nigeria and Nigerians. For every item for which Buhari was elected, indices have gone southwards. Without mincing words, given the opportunity today, majority of Nigerians will not hesitate to end this government of perfidy and ineptitude.

Kola Ibrahim, Democratic Socialist Movement

However, ending the Buhari government is not enough. Understanding why the Buhari government failed, in spite of the huge illusion in him in 2015, is more important. We don’t want to Buhari’s rule to be replaced by another regime incapable of even easing the crises facing Nigeria, not to speak of finally ending them.

While it is true that the situation of the country and the living conditions of the majority of the population have worsened, it is worth noting that we are not just passing through this situation, neither is the utter failure of the Buhari government unconnected with past administrations. Indeed, since the reemergence of civil rule in 1999, working people and the poor have not had a respite from serial attacks on their living conditions by various capitalist governments which have doled out series of neoliberal policies that have eroded the already abysmal living standard of the people. On the other hand, these various policies have placed more public resources in the hands of the handful rich class, while creating a sprinkle of new rich class. And of course, the Buhari government has taken this to new heights, not only through the impact of capitalist crises and the increasing taking of further neoliberal pills to solve a terrible situation it met on ground, but also through its utter clueless approach, dictatorial tendency and clannish character.

This background is necessary, as failure to understand that we are not just here per chance, but the current conditions of the country is a product a process of capitalist rule that have continually denied the majority of the population better living conditions, in spite of the inexhaustible wealth and resources of the country, will only lead to confusion and error for the working class movement and activist layers trying to fightback. In addition, this understanding will help us in not falling to the pit of ethnic jingoism or idea of lesser evil, as many pro-capitalist analysts and pundits want us to believe. We must not fall into the idea of lesser evil e.g. “Jonathan was better”, “Obasanjo was the best”, “Yar ‘Adua could have made a difference but for his death”, “we need to go our separate ways because Hausa-Fulani are against us”, etc.

The last six years have been a trying time for majority of Nigerians, especially working people, youth and the poor. Between year 2016 and now, number of extreme poor, according to World Poverty Clock, has increased from around 74 million to 89 million, while according to the Bretton Woods institution, World Bank, about 100 million Nigerians are in multidimensional poverty. This is an increase of more than 15 million within 6 years. This is coming on the heel of other worsening indices. Headline inflation for instance has increased from around 11 percent in first quarter 2019 to 18.12 percent in April this year, while food inflation, which is more important to the working class has increased from around 14 percent in first quarter of 2019 to 22.72 percent in April 2021, the highest since 2009. Today, cost of living has soared with food price and energy costs gulping more than 50 percent of working families’ incomes.

Background to Buhari failure

While it is true that the Jonathan government left the economy in terrible conditions, the fact remains that the Buhari government, rather than reversing the horrible drift, has left the rot that has defined the economy intact, while offloading the impacts on the working people, youth and the poor, who constitute the majority of the population. While the Jonathan administration, alongside state governments (from major ruling political parties, especially PDP and APC) shared over N29 trillion within 5 years, basic social infrastructure were left to rot away. Between 2011 and 2015, a meagre sum of N2.2 trillion, about 8.2 percent of total national budgets of N24.9 trillion, was committed to education by the Jonathan government.

The national oil corporation, NNPC, was left to rot away while the government committed hundreds of billions of naira to import refined fuel, thus enriching a clique of importers. While Jonathan administration cancelled the contracts with China to build new refineries, trillions of naira was stolen from the nation’s coffer for importation of fuel, such that by 2012 as much as over N1.6 trillion has been stolen under the guise of fuel importation. Even insecurity was used as a grand tool for looting with over $2 billion meant to fight Boko Haram insurgency purportedly looted under Jonathan government.

The state governments, representing the various ruling parties were not left out of the looting spree. According to Prof. Odekunle, a member of the disbanded Presidential Advisory Panel on Corruption, between 2006 and 2011, over N1.3 trillion was stolen by just 50 politicians. By May 2015, the excess crude account had been depleted from about $8.65billion in December 2012 to $2.07billion. Despite the fact that, for most parts of the Jonathan administration, crude oil sold for an average of $100 per barrel, yet all sectors of the economy and the polity were left in ruins.

This is the background to the emergence of the Buhari administration. Majority of the over 15 million people who voted for Buhari in 2015 did so, because they believed that he would arrest the situation, change the dangerous drift and fast track development.

It couldn’t have been worse under Buhari

Of course, the Buhari government first hesitated for few months of its honeymoon, parts of it hoped to stimulate capitalist development but rapidly reality stepped in, capitalism was not going to save Nigeria. Thus, in just a year of existence, the government bore its fangs by astronomically increasing petrol pump price from N87 to N145. While the government’s revenue had dwindled as a result of sharp fall in crude oil price (which then constituted more than 70 percent of government’s revenue) from around $80 dollars in late 2013 to less than $30 in mid-2016, the logical expectation is that the fall in crude oil price should lead to reduction in petrol pump price. However, since Nigeria’s relies on imported fuel as a result of the deliberate collapse of the nation’s refineries, coupled with the fact that the country get about 90 percent of its foreign exchange earnings from crude oil sale, the fall in crude oil price meant a disaster for the country, as naira value fell (with government trying to use foreign currency earning to defend the naira), while government revenue fell drastically. Notwithstanding this reality, the hike in fuel pump price was more ideological than economic, as various analyses, including those of labour centres, have shown that the hike in fuel price was fraudulent.

A sensible approach would have been to begin to mobilize resources by: ending direct and indirect looting of the nation’s wealth through over-inflation of contract sums, bloated emoluments for politicians, fraudulent tax and trade policies, etc. and recovering trillions looted from the country’s coffer through democratic public probe. Rather than do this, Buhari, who had earlier maintained that fuel subsidy was a fraud, not only continued with the subsidy regime but also increased fuel pump price twice in May 2016 (first term) and September 2020 (second term), thus bringing fuel price to N162, almost 100 percent increase beyond the 2015 price. Not done, the same government that refused to revamp the fuel refineries and build new ones, was busy doling out one subsidy after another to the private refinery being built by Nigeria’s billionaire, Aliko Dangote. It is worth stating that increase in fuel price contributed to lower standards of living especially through inflation and accompanying unemployment.

Aside the increase in fuel price, the government also launched other attacks such as increase in electricity tariffs and increase in Value Added Tax (VAT). Furthermore, the government, despite all pretensions, has overseen devaluation of the currency from around 197 naira to a dollar in 2014 to about  411 naira today. These capitalist policies have made life more unbearable for the poor people, while enriching the already rich class. It is not accidental that while the working people are been squeezed more, banks, the capital dispenser of capitalist economy, have seen unprecedented increase in revenue and profits, even in the worst economic recession. Just in the first three months of this year eight commercial banks declared profits of N231.96 billion (Leadership, June 1, 2021).

At the same time that banks are declaring tens of billions of naira in profits, more and more Nigerians are being thrown out of jobs, as unemployment is at the historic height of 33.3 percent (23.1 million) up from 10.4 percent in December 2015, with youth unemployment and underemployment reaching 63.5 percent. While Buhari claimed to have implemented some job-creation policies, they are either a little drop in the ocean of mass unemployment, or mere propaganda or slave labour scheme. For instance, while the government claimed to have engaged over 400,000 youths in the NPower programme in four years, this is just about half of over 700,000 people thrown to the labour market every three months. Not only this, the NPower programme is a casual job scheme that last for just two years, with the enrolled youths only paid peanuts and without condition of service and trade union rights.

Agricultural revolution?

The government also claimed to have had about 8 million people employed through its N1.7 trillion-worth agriculture programmes, especially the rice revolution. Aside the fact that this number is still a far cry from the over 23 million unemployed, this claim by government is more of propaganda than reality. There is no way 8 million Nigerians will be gainfully employed through agriculture alone and this will not reflect in economic indices. Interestingly, rice production, which Nigerian government claimed to succeed in, is still in rudimentary stage with the price of rice now almost 200 percent higher than its price in 2014. Yet, the government claimed to have reduced rice importation from about 7 million metric tonnes to about 2.6 million metric tonnes, yet the price of local rice is more than double the price of the imported rice in 2014. Moreover, the northern region where the rice revolution seemed to have happened still has high rates of unemployment and poverty.

Worse still, government non-oil revenues have dwindled in the last four years reflecting low productive economic activities, with manufacturing and non-manufacturing PMI fell below 50-point mark of 49.6 and 45.2 point respectively. It is not accidental that rising core and headline inflations are today mostly driven by food inflation; yet the Buhari government claimed to have spent as much as N2 trillion on agriculture through the federal government and CBN budgetary allocations and interventions.

Government agriculture policy, which the government claimed it wanted to use to diversify the economy has been mere failure, as noted on the rising prices of food stuff, and the continuous dependence of the country on crude oil for government revenue and foreign exchange. Worse still, the government still want more Nigerians to continue to use the rudimentary agricultural system being practiced in the 1960s, which though made Nigeria a major producer and exporter of many agricultural products (groundnut, hide and skin, cocoa, rubber, etc.), but is not sustainable in this age of modernised and mechanised agriculture.  This is also reflected in the government’s approach to the herders-farmers crisis, with government at best not prepared to transform the pastoral system from the archaic, unproductive and crisis-ridden open grazing system to modern ranching and pastoral system.

According to president Buhari, Nigeria’s economic woes, including unemployment will simply vanish once the youth embrace agriculture. But in actual fact, modern agriculture does not depend on percentage of population involved in farming. In reality, with modern agricultural system, premised on mechanization and scientific methods, productivity can be much higher with fewer people in farming. The thinking that agriculture require all the youths, including professionals, involved in farming is archaic and unproductive in this age. What is really needed is government direct investment in modern agriculture through development of mechanised agriculture through large state farms, plantation and farm settlements, and support for peasant farmers by providing them with equipment, storage facilities, modern seeds, seedlings and other inputs, and training them. This, in addition to provision of infrastructure such as roads, schools, hospitals, power supply, etc. in farming communities and farm settlements, will increase productivity. This is also linked to building agro-allied industries that will process these farm produce and make them industrially useful both for local consumption and export.

Agricultural system premised on export of primary products will not develop the country, and will in fact regenerate the same problem with crude oil economy, where the country relied on global capitalist big business in the West, who determine the price of these products. None of the programmes highlighted above can be left in the hands of the private sector either financial institutions or big private farms. This is because the main focus will be profit making. This means that private resources will only be directed at where the biggest profits will be made and not necessarily to develop the whole agricultural chain. Nigerian government has spent close to one trillion naira through the CBN and federal government interventions like Anchor Borrower’s Programme, to spur investment in export-oriented produce and reduce importation of food items. But all of these programmes have had at best marginal impacts on the economy, especially on diversification. This is because government’s agricultural policy is premised on enriching banks and big time farmers, while only little is left for the peasant farmers.

Of course, other factors such as insecurity in the country, herders-farmers conflicts, climate change, among other factors also contribute. Yet, government’s failure in addressing these factors especially insecurity and herders-farmers conflicts further reinforces the failure of the Buhari government in all fronts. Therefore, only direct state investment and involvement will be effective in genuinely diversifying Nigeria’s economy. But this cannot be done, while the mainstay of the economy including finance, energy, iron and steel, mineral resources, etc. are left in the hands of big capitalist class. For instance, developing agriculture through government direct investment will mean investment in infrastructure, energy, education and power and steel sector.

To mobilise resources for these will require government taxing the already rich, reducing the emoluments of politicians in power who corner as much as 1.3 trillion every year, blocking loopholes of looting through the fraudulent contract system and trade policies that enrich big businesses at the expense of the country, and recovering looted funds. More than this, it will require government taking over some of these sectors like energy, iron and steels, banking and finance etc. in order to have an organized investment and control. All of these will impinge on capitalist interests. Therefore, genuinely transforming agriculture for the interests of the country and its people is a class and system issue. Only a government premised on socialist programme, and which mobilises the working people, youth and the poor to the arena of politics can genuinely do all this.

Government fiscal policies: a tragedy

Since 2016, the Buhari government had increased the national budgets significantly with the 2021 budgets put at about 13.08 trillion naira. In these budgets, the federal government claimed to have committed more resources to funding of infrastructures.  And indeed some infrastructures are being developed, especially rail lines. However, this is just one side of the story. In the first instance, the real values of the budgets are less than the announced figures. For example, the 2021 budget of 13 trillion naira is actually $34 billion and almost the same dollar value with 2014 budget. When one factors in the rising inflation and other indices, it will be glaring that, while the increased budgetary values are important, they are still far from addressing the development needs of the country. Secondly, the budgets are financed mostly by heavy loans that have made the budgets to have little effects on the lives of majority of Nigerians.

In the 2021, about 3.34 trillion naira (a quarter of the budget) is meant for debt servicing. At the same time, the budget deficit is about 5.4 trillion naira. What this mean is that the country will be borrowing to service debts or simply put, borrowing to pay interests on existing debt. The budget for debt serving is more than education and health budgets, and more than capital votes. The other aspect is the fact that the contracts for the capital projects are done through the wasteful capitalist contract system that guarantees more profits for the big time contractors and consultants at the expense of the country. According to a report by Nigeria’s newspaper, Premium Times, road construction in Nigeria is the costliest in West Africa, and one of the costliest in the world. Capital project in Nigeria is a big source of patronage and looting. However, this is not about local contractors alone. China’s contracts with Nigeria for various construction projects, especially roads and rails, have been reported to contain usurious conditions and shrouded in opacity, which grant more favour to Chinese companies against Nigeria. It is thus not accidental, that given all of these situations, the huge funds committed to capital projects have only marginally reflected in infrastructural improvement. Worse still, dearth of funds have stunted many of the capital projects. While Covid-19 pandemic impacted on economic activities and government funding, leading to the second recession in four years, the reality is that the Nigerian economy is weak and unsustainable on the basis of its neo-colonial, neoliberal capitalist arrangement.

More Attacks on the Way

All of these have shown the failure of the capitalist arrangement to improve the country’s development. Currently, Nigeria is in a fiscal quagmire, with the government having to borrow more every year to service debt; yet, the debts keep increasing, while the basis for hiking budget size i.e. to spend more on infrastructure and social services are being defeated, as debt servicing takes greater share of government’s budgets. Yet, government kept borrowing in order to maintain this obviously unsustainable arrangement. Not only this, the government has shifted the burden on the mass of working people, while capitalist sharks in financial sector and global capitalist organisations are putting more pressure on the government to go the whole hog by offloading all the burden on the working and poor people.

But the Buhari government, as much as it wanted to go much further, is afraid of mass revolt, given that the current politicians were witnesses to the January 2012 mass revolts, and in fact profited from it. But this does not mean the government will not launch more capitalist attacks on the working people and the poor. The ominous signs are already there. For instance, the Minister of Finance has hinted of government plan to downsize the federal workers and/or revert to the old minimum wage. Kaduna State governor, a rabid and sadistic defender of neoliberal capitalism, has let the cat out in this regard, of course with mass resistance from workers. Of course, many state governments are also waiting for who successfully lead the pack. Some state governments like Kano have even taken step to stop payment of N30,000 minimum wage. Also, there are plans to increase fuel price and electricity tariffs. On two occasions, government’s agencies have made announcements on the increase; but public outcry forced the government to back track. State governments have also asked the federal government to hike fuel price again. But the government is biding its time. Interestingly, the government is using purported negotiation with labour leadership as time-buying tactics. Workers must compel the leadership of the labour movement to come out categorically to oppose these policies. Workers must be on guard to resist any attempt to offload further attacks on them. The best way to oppose and resist these attacks is for the workers to go on the offensive by demanding better living conditions.

If the Buhari government successfully implement these attacks, it can only worsen the economic and social crises in the country. The only lifeline now for the government is the Central Bank, which has taken the role of Finance Ministry, pumping money into the economy. But there is a limit to how far the Central Bank can go. Already, banks are demanding refund of loans given to state governments, which will put more pressure on state revenues, and as rabid defenders of neoliberal capitalism, the state governments will not hesitate to offload these on the working people, poor and social services like health and education.

Only socialist programmes premised on utilizing the huge monetary and natural resources of the country for the people can break the cycle of underdevelopment and suffering in the midst of superabundance. Nationalizing the commanding heights of Nigeria’s economy under democratic control and management of workers, relevant professionals and communities, will not only liberate needed resources to develop the country, but also allow for organized and holistic planning.

Building revolutionary alternative

However, only a mass revolutionary party of the working people, with clear socialist programmes and genuine democracy can implement these programmes successfully. It is such a party that can mobilise the political power of workers, youth and the downtrodden to force down the sabotaging power of the capitalist class, both nationally and internationally. Good enough, Nigeria’s labour movement, with huge heroic history of struggle, is best placed to play this role. Unfortunately, the leadership of the labour movement has become a major obstacle in putting political power on the front burner of labour movement’s agenda. Even, the daily struggle of workers from workplaces to national level are being betrayed by the leadership. Most recently the struggle against mass redundancies in Kaduna was turned, by the current leadership, into one aiming to ensure that the sackings were simply carried out legally.

It is so bad that many of the leaders of labour unions are themselves big time capitalists and labour employers, and would not want the system overhauled. How do we expect labour leadership to build political alternative when many labour leaders graduate from labour unionists to become political appointees or become contestants under bourgeois parties that are unleashing the dragon of neoliberalism on the working people? Therefore, the struggle to build a mass working people’s political alternative is tied to making labour movement a radical bulwark of resistance against all anti-worker policies. This is at the same time tied to the need to rebuild the trade union movement and its leadership.

The current efforts of various left coalitions such as The People’s Alternative Political Movement TPAPM and others are welcome development. However, without a clear cut socialist programmes linked to the day-to-day struggle of the working people at local, state and national levels, coupled with genuine revolutionary internal democracy, such efforts may end up as another futile ones. The Socialist Party of Nigeria (SPN), founded by members of DSM, trade unionists and other activists, has shown example of how to approach building a socialist political alternative, even in the midst of seriously unfavourable conditions defined by limited resources, lack of support from most trade unions and left groups, and most importantly the attempt of the capitalist ruling class, through the INEC to stifle life out of the party.

As 2023 approaches, working people and youth will be searching for alternative to the Buhari/APC failure. But many will be finding it outside of PDP. In fact, many are becoming disillusioned in party politics given the various manipulation of elections by the billionaire parties of APC and PDP, and more importantly because many have seen that there is no difference between the two main bourgeois parties. Without a radical mass alternative of the working class, more and more people will dissolve into ethnic jingoism as the herdsmen-farmers conflicts have shown, or line up behind a disgruntled section of the bourgeois class who are championing some nebulous reforms such as regionalism, restructuring, etc. to end oppression and poverty, all of which will not resolve any of Nigeria’s social, economic and political problems unless the question of ownership of the economy is resolved.