Obamanomics, Jonathanomics And Tinubunomics: How Leadership Can Inspire Or Diminish A Nation’s Fighting Chance In Wrestling Inflation To The Ground
The Oasis Reporters
June 10, 2024
Nigeria’s inflation rate is the worst ever in living memory causing a vast number of young citizens to vote with their feet due to deepening poverty and a seeming ineptitude to address the dire economic, social and economic challenges facing the people.
A few days ago when someone bemoaned the fact that several multinational corporations were leaving the country, thus expanding the poverty scope and increasing unemployment, a government apologist retorted that those companies were going to leave under the previous government of General Muhammadu Buhari anyway, then decided to delay for a while until Tinubu came and in less than one year, have made a resolution to leave.
So where is the hope? Do circumstances ever turn around with dexterous leadership?
Like it is happening under the greatly inspirational leadership with the new President Milei leadership as he came into power in Argentina? Why is Nigeria’s case not changing fast enough?
Before looking into how outstanding Presidents like Olusegun Obasanjo in Nigeria, Barack Obama in the US and Goodluck Jonathan in Nigeria did it by inspiring hope and leading superlatively, here are a few points put together by Dr.Jekwu Ozoemena, Nigerian born former Managing Director of Access Bank Zambia Ltd:
“How can it be that Nigeria as the ‘Giant of Africa’ would justify spending N21 Billion (US$14 Million) to build a lodge for the Vice President at a time like this?
Let us for a moment ignore that this was done when about 133 million Nigerians are living in multidimensional poverty, the highest inflation under civilian rule (CPI at 33.7% and food inflation at 40.5%, highest since the return to democracy), grid power generation persistently below 4,500MW, an unprecedented debt service to government revenue crisis, and when an additional 31 million Nigerians are projected to be food insecure by August 2024.
Let us ignore all of that, isolate and interrogate this ‘Giant of Africa’ cliche.
Other than our 226.5 million population related indices or metrics, is there any other measure or index, whether economic or Human Development (HDI), that Nigeria can still point to justify the title ‘Giant of Africa’ ?
Looking at the GDP indices, Nigeria is 4th in Africa (2024) with a per capita income ranking it 22nd in Africa (2021) and Human Development Index (HDI) ranking the country, 25th in Africa and 161 Globally (2024) with a Military that is placed 4th in Africa (2024) behind South Africa, Algeria and Egypt.
In terms of Electricity Generation, Nigeria is placed 5th in Africa (2021) behind Morocco, Algeria, Egypt and South Africa with Electricity Consumption Per Capita placing the country 25th in Africa (2021).
Nigeria’s Land Mass puts it at 14th position in Africa.
Therefore , Nigeria claiming to be ‘the Giant of Africa’ seems only in areas where there is least government participation; arts, media and entertainment.
For now, therefore, Nigeria as the Giant of Africa should be aspirational, a war cry to galvanize the people, not a reason to justify profligacy and conspicuous consumption of our political class.
Nigeria can still be the Giant of Africa but it is not by rhetoric, propaganda and sloganeering. It requires a new way of thinking, vision, discipline and relentless execution”.
There was unparalleled despair in the United States of America before President Barack Obama was sworn in to office. A financial crisis had lingered from the previous government of President George Bush. Businesses were going bankrupt. Banks like Lehmann Brothers were either at the verge of collapse or collapsing already and the mortgage crisis was throwing citizens out of their homes that they had spent a lifetime of mortgage payments to maintain. And they were losing them. The despondency was huge and depressing.
Then Obama came in and renewed hope.
According to Wikipedia, “the economic policy of the Barack Obama administration, or in its colloquial portmanteau form “Obamanomics”, was characterized by moderate tax increases on higher income Americans designed to fund health care reform, reduce the federal budget deficit, and decrease income inequality. President Obama’s first term (2009–2013) included measures designed to address the Great Recession and subprime mortgage crisis, which began in 2007.
These included a major stimulus package, banking regulation, and comprehensive healthcare reform. As the economy improved and job creation continued during his second term (2013–2017), the Bush tax cuts were allowed to expire for the highest income taxpayers and a spending sequester (cap) was implemented, to further reduce the deficit back to typical historical levels.
The number of persons without health insurance was reduced by 20 million, reaching a record low level as a percent of the population. By the end of his second term, the number of persons with jobs, real median household income, stock market, and real household net worth were all at record levels, while the unemployment rate was well below historical average”.
Thus President Obama’s first inauguration was held during the depths of the Great Recession. The situation was dire; the economy had lost nearly 3.6 million jobs in 2008 and was shedding jobs at a nearly 800,000 per month rate when he took office. During September 2008, several major financial institutions either collapsed, were forced into mergers, or were bailed out by the government.
Obama introduced a stimulus package into the system and the reinvigoration turned the economy around. Hopelessness turned to renewed hope and America was excited enough to give him a second term.
This is a clear sign that leadership matters in government.
The same thing can be said about former Nigerian president, Olusegun Obasanjo. Not only did he negotiate and worked to take Nigeria out of debt burden, his policies kept Nigeria’s inflation to the least minimal level. It was single digit.
For the three years that President Umaru Yar’adua was in power, he also followed the path of prudence while showing great love for a greater Nigeria.
Next came President Goodluck Jonathan whose policies attracted Foreign Direct Investment (FDI), making Nigeria a prime destination in Africa, and the country became the largest economy in Africa.
Most significantly, Jonathan’s policies kept inflation rate to the same single digit threshold of less than 9% and Nigeria remained a country with high hopes and buoyancy.
It was an unmitigated disaster when Muhammadu Buhari came in as President to undo almost all that Obasanjo and Jonathan did. It didn’t take long before the inflation rate jumped to double digits, even exceeding 22%.
While income levels were diminishing, the next government of President Bola Tinubu with his policies has long since shot the inflation rate higher. At 33.7%, most Nigerians cannot afford basic purchases and the gloom is evident. Nigerians are in dire economic straits. Thus many who can migrate are leaving. With talents leaving to seek fortunes abroad, the economy worsens.
Greg Abolo
Gregabolo@gmail.com