By Obiaraeri Nnaemeka Onyeka, published by Njenje Media News
The last nine years under the All Progressives Congress (APC) have been marked by significant economic downturns and widespread corruption. As of December 31, 2014, Nigeria’s debt-to-GDP ratio was less than 10%. However, by June 30, 2015, just 32 days after former President Goodluck Jonathan left office, the ratio had risen to 10.61%, with the country’s total debt at N12 trillion.
Fast forward to July 2, 2024, and Nigeria’s debt-to-GDP ratio has skyrocketed past 50%, with no signs of slowing down. The current economic woes can be traced back to two major policy missteps by President Muhammadu Buhari and former Central Bank Governor Godwin Emefiele in June 2015.
First, Buhari attempted to revoke the peace agreement and amnesty program in the Niger Delta, established by former President Umaru Yar’Adua. This action led to renewed militant activities, including the bombing of oil and gas facilities, which drastically reduced Nigeria’s crude oil output from 2.3 million barrels per day in December 2014 to 1.2 million barrels per day. It took the intervention of then-Acting President Yemi Osinbajo to calm tensions and restore some order. However, the damage was already done, and the oil industry has not fully recovered.
Furthermore, Buhari’s associates brought rampant oil theft and inefficiencies into the sector, with many of these individuals still holding key positions in the Nigerian National Petroleum Corporation (NNPC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Their continued presence underscores the deep-rooted corruption and lack of accountability in the industry.
Second, Emefiele’s management of the foreign exchange market introduced multiple exchange rate windows, leading to opacity and criminality. Despite warnings from global market players, JP Morgan Chase and Barclays removed Nigeria’s debt instruments from their emerging markets index. This move triggered a massive sell-off and capital flight, estimated at over $78 billion by the end of 2015.
These policy decisions, coupled with falling crude oil prices, plunged Nigeria into its first recession in over 30 years in 2016. The country has struggled to recover, with ongoing issues in the oil and gas sector and persistent economic instability.
Understanding these missteps is crucial for Nigerians to grasp the root causes of the nation’s current economic troubles. Without acknowledging where things went wrong, it will be challenging to find effective solutions and move forward.
Obiaraeri Nnaemeka Onyeka
