Buhari’s Economic Policies Need An Overhaul

By Hector-Roosevelt Ukegbu

The Federal Government seems to be floun­dering with its economic policies, showing no particular direction or strategy. This, perhaps, should not be surprising given that President Buhari came into office with a fixed mindset on how the economy should be run. And, he didn’t want any intellectual opposition from anyone. So, in forming his Cabinet and Inner Circle, he gave short shrift to professional economists and packed his government predominantly with lawyers – to the extent that the Minister of Bud­get and National Planning is a lawyer, no less.

*Buhari 

Happily things are changing, but not soon enough. It will take some time to reverse the damage done by the untutored, time-wasting attachment to a two-tiered currency market, with one category’s exchange rates fixed by fiat. Circumstances have forced President Bu­hari to finally listen to economists he previ­ously said had been talking over his head, not to his head.

But, certain economic policies of this gov­ernment point glaringly to the misfortune that economic policies are geared more to the gov­ernment’s saving face politically rather than putting the country on a sure economic footing for the long haul.

Almost with glee, the Information minister has stated that with the decisions to begin pay­ing N5,000 monthly to one million unemployed Nigerians, and hiring 500,000 graduates to be­come school teachers, the Buhari government is now fulfilling its campaign promises. In his recent Op-Ed article in the New York-based Wall Street Journal business newspaper, Presi­dent Buhari added that the government is now taking steps to refloat the economy.

The Central Bank itself is jumping in with a program it says will fund millions of young entrepreneurs. All these policy actions are mis­guided and are not what the Nigerian economy needs to grow again, and sustainably into the future.

Take the issue of refloating the economy, a Keynesian strategy used since the Great Depres­sion era in the West and proven to help lift strug­gling economies. The U.S. Federal Reserve Bank (the Central Bank of the United States) pumped in tens of billions of dollars monthly for several years to “refloat” the U.S. economy, and cut its interest rates for financial institutions to zero – what it called an economic “stimulus” program. Years before the world financial meltdown of 2008, the Japanese economy was mired in stag­nation as the citizens just preferred to save rather than to spend. The Tokyo government then em­barked on a policy to give out cash to its citizens so that they could start spending. These programs in the U.S. and Japan were designed to increase consumer spending, so that manufacturing and construction jobs could rise as consumer demand expanded, borrowing costs were very low, and loanable funds were abundant.