The recent sack of nine ministers by President Goodluck Jonathan appears to be part of the political master strokes that would unfold in the coming months towards 2015 elections. From all indications it hardly has any relationship with a genuine agenda of brightening the country’s socio-economic indicators, but a consolidation of the power base of the president who is forced to bring in loyalists in the face of opposition within his ruling party.
The cabinet shake-up, which consumed the ministers of foreign affairs, education, science and technology, housing and urban development, national planning, and environment, came as a rude shock to observers. Others affected were the ministers of state for power, agriculture and defence.
Though Labaran Maku, the information minister, said the action of the president was informed by the need to inject new blood into his administration for more service delivery. But many political and policy pundits agree that the sacked ministers’ portfolios are not of huge policy significance, and that this particular cabinet shake-up is essentially a political play rather than indicating a desire to bring about meaningful changes in the economy or overall polity.
Speaking with BusinessDay, Opeyemi Agbaje, a public policy analyst, was emphatic in stating that “the sack is centred on politics rather than performance, and suggests the presidency may now be going on the offensive with a strategy of political consolidation… I can think of a few ministers whose names may have been included if the criteria was performance.”
Political economists are particularly worried why a cabinet reshuffle should be of top priority for the Jonathan’s government at a time when socio-economic indicators have remained gloomy.
They are of the view that the recent gains and successes by the government, which include the about to be concluded power privatisation exercise, ongoing transformation of the agriculture sector, and the inroads into the revamp of infrastructure, should have been consolidated upon and not be marred by politically motivated cabinet changes.
The timing was another issue. Political watchers say a cabinet reshuffle should have long been done and not now when it coincides with in-house crises within the Peoples’ Democratic Party, which greatly gives it a political colouration.
The sack of these ministers came barely 24 hours after the Federal Government said the country currently loses between 60,000 and 80,000 barrels daily to crude oil theft, a loss which is considered so minimal compared with the 400,000 barrels being reported in some quarters.
In addition, figures released recently by the National Bureau of Statistics (NBS) showed that the economy grew at a slower rate in the second quarter (Q2), at 6.18 percent than the 6.56 percent in previous quarter, owing to oil theft and production shutdown.
Considering the price of crude oil in the international market, which hovers around $113 per barrel, analysts say the country would be losing between $6.78 million (N1.08bn) and $9.04 million (N1.45bn) daily. By any standards or measurement, the bottom-line is that Nigeria is losing oil and money.
Yerima Ngama, minister of state for finance, who represented the president at this year’s Annual Banking and Finance Conference, admitted that in recent times, the oil sector had brought about nothing but serious shocks to the economy.
“The oil sector has brought nothing to this country than shocks. Even some new shocks that we never thought could be shocks, things like oil bunkering and oil theft. These are shocks because once they happen, they shut down the entire system,” he said.
Given the above scenario, the cabinet reshuffle, if based on performance of the ministers and the need to position the economy for growth and better perception in the global community should have affected key ministries that drive the economy.
Governance, according to most political economists, is about managing the economy, and that the government needs to focus on it rather than spend most of the time politicking.
The nation’s economic overview has been poor. The World Economic Forum recently ranked Nigeria low in the Global Competitive Index (GCI) 2013 -2014. Nigeria went down by five slots from the 115th position it occupied last year, and presently occupies the 120th position out of the total 148 countries on the list.
The GCI, which was introduced in 2004, measures how the set of institutions, policies, and other factors determine the level of productivity of a country.
The GCI scores is calculated by drawing together the 12 pillars of competitiveness, namely: institutions, infrastructure, macro-economic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.
The World Economic Forum found it worrisome that Nigeria’s economy struggles to keep up despite overt advantages over other African countries. For instance, it was noted in the report that because of Nigeria’s population size, the country enjoys a large market size (32nd position) “which has the potential for significant economies of scale and is an important factor for attracting investors.”
The index identified weak institutions on the platform of which Nigeria ranked 129th out of 148 countries, ingrained corruption, undue influence, weakly protected property rights, insecurity, which placed it on the 142nd position, poor infrastructure (135th) and poor primary education (146th) as the reasons for the country’s drop on the rating chart. Nigeria’s over-reliance on oil and the poor penetration of ICT were also cited as parts of the factors responsible its poor rating.
Nigeria’s GDP expanded by 6.18 percent year-on-year (y/y) in the second quarter (Q2) of 2013, down by 38 basis points (bps) from 6.56 percent recorded in the first quarter and 21bps, slower than the 6.39 percent posted in the corresponding quarter of 2012. The nominal GDP posted in 2Q13 was estimated at approximately N9.11 trillion (about $58.52bn) against N9.49 trillion ($60.95bn) and N9.84 trillion (about $63.18bn) recorded in 1Q13 and 2Q12, respectively.
As well, the poverty rate indicators aren’t speaking well of the country. The National Bureau of Statistics said in 2012 that 112.519 million Nigerians live in relative poverty conditions. This is staggering and appalling, judging that the country has an estimated 169 million population.
Apart from the relative poverty index, which is the comparison of the living standards of people living in a given society within a specified period of time, other poverty measurement standards in absolute measurement put the country’s poverty rate at 99.284 million or 60.9 percent. With the dollar per day measure, Nigeria’s poverty rate is at 61.2 percent and the subjective poverty measure, puts the poverty level at 93.9 percent.
With these gloomy socio-economic indicators it is certain that all is definitely not well with the socio-economic foundation of the country. This should engage the leadership, not political wrangling and sabre-rattling.
By: Ikenna Obi, Iheanyi Nwachukwu & Chuks Oluigbo