How The Nigerian Government Caused 2016 Economic Recession – John Uzie

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what caused nigerian economic recession 2016

Sept 3rd, 2016 – How Nigerian Government Caused 2016 Economic Recession – John Uzie

The current Nigerian economic crisis which started in June 2014 has negatively impacted Nigerians ; there is loss of jobs, high cost of goods and services, closure of businesses, owing of government workers, increasing crime rate, and decreasing value of the Naira.

How did we get here? What went wrong? President Muhammadu Buhari’s All People’s Congress (APC) led Federal government of Nigeria blames the 16 years of the People’s Democratic Party’s (PDP) misrule as being responsible for the nation’s current economic woes.

In response to this accusation, the opposition PDP blames the APC led Federal government for lacking the ability to effectively manage the Nigerian economy.

To know how we got to this point as a Nation, we have to look back at our history.

During the years that followed Nigeria’s independence from Great Britain, the Nigerian economy was anchored on agriculture produce such as cocoa, oil palm products , groundnut, cotton, timber, rubber, leather, gum Arabic, etc.

In the 1970’s when Nigeria began large scale crude oil production, the dynamics of the Nigerian economy changed, this newly found wealth became the main anchor of the nation’s economy. Crude oil export revenues was used in establishing and running a wasteful and expensive Federal system of government ; numerous ministries, departments, agencies, commissions, regulatory councils, boards, parastatals, and foreign missions.

The creation of numerous regional States and Local government areas was done, and they are expected to be funded by crude oil revenues.

The elites from the North and South work together to keep this weak economic model in place, and as a reward for their efforts they partake in sharing oil revenues, which is referred to as ” national cake”.

In the 1980s, the Nigerian economy had a major crisis as a result of unfavourable crude oil prices in the global market, after this bitter experience, successive governments failed to learn a vital lesson on the urgent need to diversify the economy.

Various governmental bodies in Nigeria have talked about diversifying the Nigerian economy away from dependence on crude oil revenues, it has been all talk, talk, with no meaningful actions. During the years of high crude oil revenues, massive looting was the order of the day.

Political leaders were in competition to out-do each other in the looting game.

Over the years, due to easy crude oil revenues, the Nigerian economy became dollarised.

Annual budgets are based on expected dollar earnings from crude oil exports, when crude oil prices goes high in the global market, the Nigerian government has more money to spend, when crude oil prices goes down, the government has less money to spend.

This is how we got to this current economic crisis :

1. Years of operating a weak and faulty economic model, that solely relies on crude oil export revenues.

2. Years of massive importation of refined petroleum products, this led to regular depletion of Nigeria’s foreign reverses.

3. The addiction of Nigerian leaders to crude oil revenues: this addiction made them unwilling to take actions in diversifying the Nigerian economy.

4. The poor development and neglect of oil producing areas of the Niger Delta: This has led to oil bunkering, militancy, and willful destruction of gas and oil facilities in the region. The outcome of these acts is loss of crude oil production and revenues.

5. Years of massive importation: Nigeria virtually imports almost everything ; house hold items, pharmaceutical products, building and construction materials, machines and equipments, electronic devices, rice, vegetable oil, cosmetics, phones and computers, vehicles, etc. The effects of this large scale importation is depletion of the nation’s foreign reverse.

6. High cost of running the government, the cost remains expensive and wasteful. The government spends close to 80 percent of its annual budget on salaries, allowances, pensions, and over head expenditures.

7. The attitude of Nigerians towards patronizing made in Nigeria goods and services:

Many Nigerians send their children abroad to school, import goods which are available in Nigeria, conduct wedding ceremonies, shopping, medical treatment, and holiday abroad. The effects of these activities is growing the economies of other countries, while the Nigerian economy shrinks.

8. The wide spread looting and fraud in government: officials and contractors engage in stealing of funds budgeted for projects that were intended to promote the Nigerian economy.

9. Money laundering activities by unpatriotic Nigerians: Foreign exchange obtained at the official market is not used for the purpose for which they were granted. Such foreign currencies are laundered for private use abroad. These heartless Nigerians deny genuine business owners foreign currencies they need to operate.

10. The failure of the Central Bank of Nigeria to maintain a stable exchange rate for the Naira.

The Nigerian economy is currently in a recession, to fix the Nigerian economy, the Buhari led Federal government should look away from crude oil revenues, to continue on that path is repeating what previous administrations did that brought us to where we are today.

[Article By JOHN UZIE]

12 thoughts on “How The Nigerian Government Caused 2016 Economic Recession – John Uzie

  1. It get one man wey was speak upon my radio today. They was talk say the man be ecolomix. Plenty things for this world is dey wey pipul are be o. Some be doctor some be lawyar some be teacher some be injinear but this man be ecolomix. They say ecolomix na persin weyris study how human beans are do when they want to buy garri. Wetin are they study who is buy garri for? Are they want to know if change go remain for the money so that they go tiff am? Since wey my mama was born me I never see persin wey was come to study me when I am buy garri. If I see that persin I go kill am. I am not understanding this nonsens. But this ecolomix talk say if we stop to buy something for another countries and we are go farm to plant casava or cocoyam or other things, and if we come de produs many things for Nigeria like shoe or clothe or even barrow wey we are carry to selling for over the sea, say it will increeze our groz dormexit prodoors so that our PDP will go high. I am not understand how to plant casava or sell barrow is take consine PDP to make many pipul come de rejister for the party. Any persin weyris rejister for PDP just bicos say I plant casava for my farm na mumu. How is it consume? So if PDP is go high, wetin is do APC? That ecolomix no sabi anything. Na mumu he is be.

  2. THIS IS a well articulated submission, offering nothing but the core truth. We missed the track long ago, and econmists and analysts had predicted this long ago, that the nation’s sole dependence on crude oil is to our detriment. Now that we have found ourselves here, the solution lies not in blames, but finding ways to contain the harsh economic ebb and to recover from it as quickly as possible. It is sad that with all this happening, the cost of governance—which should be the first thing to slice down—is still high. Leadership problem is the bane of our nation Nigeria.

  3. There is something that we Nigerians are failing to Understand about the Nigerian Economy Crisis Today and the President Muhammadu Buhari Government is that, President Muhammadu Buhari is not the Cause of the Nigeria Economic Problems, before he came into Power Former President Goodluck and his PDP Band Criminals have Already Destroyed the Economy of Nigeria and so the Economy Nigeria was just Like a time Bomb Waiting in the Balance to Only Explode and President Muhammadu Buhari was just like the Man the Time Bomb was Handed over to and As soon As he Collected the Bomb it Exploded in His Hands, there after All Nigerians Started to Blaming Him for the Economic Crisis in Nigeria today, but at the Same time Nigerians are Forgetting to Remember how Former President GoodLuck just Immediately Congratulated President Muhammadu Buhari Because he New that he Has Succeeded in Handing Over the Time Bomb and he Will not Be Held again Accountable for What is Happening Today to the Nigeria Economic Crisis that Nigerians are Facing Today. IF IT IS TRUE TYPE YES/FALSE.

    • YES Yes yes yes o true true you talk sense I want people of your calibre who can deeply think twice before they shoot their gun mouth and talk rubbish when does Buhari cane to power what do they do for our Nigeria robbers who looted our treasure to their various overseas accounts in all those who put nigeria in the darkness you will never rest in a minute or seconds only if God is not in his commandment you will account 4 the downfall of nigeria economy as @ today’s sufferings allover in Nigeria as a whole

    • IT IS YES, THE WHOLE BLAME OF THE NIGERIA ECONOMIC CRISIS LIES COMPLETELY IN THE HANDS OF FORMER PRESIDENT GOODLUCK JONATHAN AND HIS BAND OF PDP CRIMINALS, BUT TODAY ALL NIGERIANS ARE THINKING THAT PRESIDENT MUHAMMADU BUHARI IS THE CAUSE OF THE ECONOMIC CRISIS IN NIGERIA AND FAILING TO UNDERSTAND THAT A TIME BOMB WAS GIVEN TO THAT MAN WITHOUT HIM KNOWING THAT PACKAGE THAT WAS HANDED OVER TO HIM.

  4. Indeed corruption has brought us to where we are today as a nation. It has caused extreme damage to our economy. I consider corruption as a cankerwarm that has really eating deep into the fabric of our nation. And it has become a threat to the survivor of our
    economy.

    Why Buhari led Government has it own share of blame,they nevertheless still retain the right to blame their immediate past government for the current economic meltdown that beset the country. But the question is,why should APC party blame the past Government for the current economic woes facing the nation? The reason is not farfetched,Jonathan administration was characterised by massive money laundry,misappropriation of public fund,mismanagement and the muzzling of the EFCC to operate which eventually gave rise to massive looting of our national treasury by the corrupt PDP officials,poor standard of our infrastructures,uncompleted contract projects worthing trillions of naira,huge depletion of our foreign reserve due to corruption and mismanagement.

    Based on this, Buhari announced to nigrians last month how several billions of naira have being recovered from PDP officials who served during Jonathan’s administration. It is indeed a shame to the past administration that should have made wise use of those billions embezzled to better the lives of the masses in the aspect of the deplorable conditions of our roads,poor electricity generation,lack of good health care facilities,poor educational sector producing many graduates who are not sufficiently disciplined and equip with the appropriate academic and professional skills. Our nation indeed would have being marked with many good things if those embezzled fund was judiciously spent on our economy.

    On the other hand,APC government led by Buhari has taking a wrongful part that if not reversed would continue to head our fragile economy for rock. The beginning of the wrongful step is in the area of our “currency devaluation”which is far from our national interest as an emerging economy. The devaluation of the naira has unprecedentedly increased the cost of living,importation of raw materials for production of consumable goods. The cost of pharmaceutical importation has also drastically increased affecting major health facilities across the country. Major businesses own by private firms which account for many of our employed youths in the country have been hit hard resulting in massive layoff of workers and sharp loss of capital investment running into trillions of naira. This no doubt is a poor economy strategy to address the financial recession grappling our nation.

    The fight against corruption has not being won by buhari led government because of lack of proper organisational structure to tackle it. Poor judicial system in the country is hampering effort to fight corruption. Our judicial officers and lawyers have adopted a bad practice of stalling progress in the dispensation of justice especially in the ongoing fight against trials of corrupt suspect. This mode of fighting corruption by the current administration will not yield fruitful result thereby loosing billions of naira to corrupt official who eventually escaped trial due to failed judicial process to bring them to justice. Therefore,more need to be done by the current administration to bring our economy to the right direction. So my brother @JOHN UZIE your overview of the nigerian government approach to revamp our economy by shifting there attention from crude oil is correct. An excellent write up indeed.

  5. Hello brother John Uzie, I want to thank you for your powerful, insightful and highly educative article above. May your generations and seeds become blessed, knowledgeable, and innovative forever. President Buhari is not to be blame for our current economy hardship or situation. Lack of vision, clueless, corruption, unpatriotic behavior, mismanagement, massive looting, and gross leadership failure caused our current economy recession that started with Jonathan administration in 2014. Brother John has fully addressed other vital causes, but PMB efforts that are currently been deployed to contain the damage cannot be felt right now by a nation that depends solely on oil revenue to operate. PMB can not give up on his efforts even as more ignorant Nigerians are blaming him solely for economy hardship and poverty, he must continue to do his best no matter what.

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