Jonathan's Choices: Muddling Through or Economic Disaster?


Nasir Ahmad El-Rufai


The elections of April 2011, their violent aftermath, the swearing in of Goodluck Jonathan and the further violence that followed have placed Nigeria at a crossroads once again. And it is up to the president to either reverse his recent governance path to muddle through the next four years at best, or continue business as usual and unchanged to economic disaster. Politics drives and determines economics to some extent everywhere, but more so in Nigeria where government has grown in the last four years to be the most lucrative business. At stake is whether Nigeria remains a "Clique Democracy" or a real, people-driven democracy. Of interest to Nigerians and our friends is whether the current leadership has the character, vision and will to defy vested political and business interests to govern decently and grow the economy. A review of Jonathan's 18 months at the helm, indicate that this is unlikely to happen.

President Jonathan's politics of deliberate division and militarization has pitted the Northerner against the Southerner, the Christian against the Muslim to the point that obtaining the cooperation and social harmony necessary for economic development will be very difficult.

In the last 4 years, the Yar'Adua-Jonathan administration spent over $200 billion of oil and non-oil revenues, including over $23 billion the Obasanjo administration left behind in the Excess Crude Account, with little to show for it. Not a single major infrastructure investment or policy initiative has been concluded in four years! And Jonathan personally spent about a third of that amount. As Acting President and then full President, Jonathan ran down the ECA to less than $500 million from the over $6 billion Yar'Adua left behind in a matter of months - sharing out the nation's savings account to State Governors to buy their support for his presidential aspiration.

Not content with spending what was in the bank, Jonathan borrowed massively and Nigeria's domestic and external debts also increased rapidly. According to the Debt Management Office, our domestic debt rose from N2,051 billion (US $14 billion) in 2007 to N3,228 billion ($21 billion) by 2010 in the three years that we can hold Yar'Adua responsible. Jonathan ramped up domestic borrowing within a year to N4,869 billion (US $32 billion) - borrowing a massive $11 billion in less than 12 months!. Our external debt also increased from $3.719 billion at the end of 2009 to $5.227 billion by March 2011. And all these with no new power station, seaport, rail network or interstate road built and commissioned!

For example, Nigeria's budget for 2011 is the most interesting I have seen in my adult years. The entire oil revenue projections for the year could not cover the salaries and running cost of the Federal Government! Government has become the biggest business in town and growing so rapidly from 2007 that we are becoming a perfect rentier state for the minority political elite. There is little or no investment in physical and human capital, even with very high oil prices the administration has enjoyed.

And for those that claim Jonathan now has 'his own mandate', and will therefore be different from the poor manager of politics and economics that we have seen and experienced in the last one year and more, I will remind them no matter what anyone say, the election results in the South-East and South-South are not statistically sensible anywhere in the world except Egypt in the Mubarak era. Jonathan's mandate is equally flawed and the forensic examination of the ballots in the Tribunal will prove it soon.

Many of his supporters think Jonathan's legendary good luck will somehow turn things around, but governance requires more than hope. We have to wait patiently and see how things unfold. And as we always do in Nigeria, pray. And needless to add, how Nigeria performs politically and economically has implications for the growth and stability of the ECOWAS sub-region and Africa.