Whilst exchanging banters on Facebook regarding why Buhari was not invited to the recently concluded G7 summit despite the fact that leaders of smaller African countries were invited, i recently made a post which elicited a lot of response and controversy (It’s been shared over a thousand times and elicited over a thousand comments as well) in which i stated that Nigeria became the fastest growing economy in Africa under the leadership of Obasanjo and as a result of this Nigeria gained respect amongst global leaders and the country was regularly invited to participate in important global economic events.
Whilst it is an incontrovertible fact that Nigeria became the fastest growing economy in Africa and the second fastest growing economy in the world under the leadership of Obasanjo (several data from reputable institutions worldwide confirm this), i was challenged based on this statement by a lot of people i assume to be Buhari/APC apologists and supporters who did not like the idea that their “enemy” had succeeded where their idol had failed woefully.
While it was obvious that some of them were just being antagonistic and in obvious denial, i will concede that some of them were actually ignorant of the giant economic strides that the country made under the Obasanjo/Atiku Administration because their administration then did not embark on chest beating, noise making and propaganda that has become the hallmark of the government today. It is because of the genuinely ignorant ones that i decided to write this article to set the records straight.
When Obasanjo resumed power in 1999, Nigeria was a pariah state as a result of the tyranny of the Abacha administration, the country was in huge debt and had challenges servicing her debt obligations, oil price was very low at less than $15 a barrel, our foreign reserves was just $3 billion and the economy was in a general state of lethargy. Everything that could possibly be wrong with the economy was wrong with it and the future looked very bleak. Undeterred Obasanjo set to work on the arduous task of restoring confidence to the country and re-building the economy.
To start with, Obasanjo leveraged on his massive international connections as a highly respected global leader to get Nigeria back into reckoning as a member of the global community. He then set off to build institutions to strengthen governance and the fight against corruption which was the biggest problem holding the country back as at that time.
Amongst his achievements in this regard are the following;
• He created the Economic and Financial Crimes Commission (EFCC) and empowered them to effectively fight corruption without fear of favour. (The achievement of the EFCC under the Obasanjo administration remains unparalleled to this day).
• He also created the Independent Corrupt Practices Commission (ICPC) another agency of government to strengthen the fight against corruption.
• He set up the Budget Monitoring and Price Intelligence Unit (BMPIU) otherwise known as Due Process office to monitor the budget and ensure that government contracts were not inflated. The unit was ably headed by the no nonsense Oby Ezekwesili and as a result of this, the country saved Hundreds of billions of naira from cutting down inflated contracts
• Under the Obasanjo administration, the practise of open bidding for oil blocks was introduced. Prior to this, oil blocks were awarded on a discretionary basis by the military to their cronies. As a result of this, the country was able to generate billions of dollars from the sale of oil blocks and signature bonuses which had hitherto remained in private pockets.
• Although the National Administration for Food and Drug Administration and Control was set up by the Babangida administration, it did not become an effective organization for fighting fake drugs and corruption until Obasanjo injected life into it by appointing the enigmatic late Dora Akunyili to head the parastatal and empowered them to fight the incidence of fake drugs in the country to a standstill.
• To reduce wastage in government, Obasanjo promulgated and signed the Fiscal Responsibility Act into law thereby legally committing all tiers of government to fiscal prudence in public financial management and inter governmental fiscal co-ordination to secure greater macroeconomic stability.
While the Obasanjo administration was embarking on these laudable reforms to strengthen governance through building of institutions to fight corruption and reduce the cost of governance, they also embarked on several economic reform initiatives which all added up to unleashing the potential of the Nigerian economy and saw the country’s economy emerging as the fastest growing economy in Africa.
Some of the landmark economic reforms embarked on are enumerated as follows;
• Privatization of Public enterprises: When the Obasanjo administration resumed office in 1999, the government was by far the biggest player in the economy being the owner of most of the large companies in the country. Unfortunately, these companies were very badly run and most of them had become comatose with the few surviving ones being heavily in the red. In line with the reality that the private sector was better equipped to own and manage businesses, the federal government embarked on a privatization exercise and in the process, government was able to make billions from the proceeds of the sale of these companies whilst further saving billions in subventions they were paying to keep the hailing companies afloat. The companies were eventually re-invigorated by the private sector and today a good number of them are contributing to the growth of the economy instead of being the drain pipes that they previously were.
• The administration paid off our national debt of $35 billion which had become an albatross through a negotiated settlement thereby massively improving on Nigeria’s sovereign ratings and making it possible for Nigerian banks/private sector access the international financial market for capital to fund growth.
• Banking reforms: enough has been written about how the Obasanjo years banking reforms increased the capitalization of banks in the country by over 300% and catapulted at least five Nigerian banks to become amongst the largest in the world but the real beauty is that with larger capital base Nigerian banks now have a lot more resources with which they can finance economic activities and growth.
• Bond market: Prior to Obasanjo’s regime the bond market was
virtually non existent, today it is worth over ten trillion naira and is a veritable source of long term funds for development growth which the government of the day mostly depends on to fund it’s activities.
• Pension reforms: In my opinion, this is the most uncelebrated and understated achievement of the Obasanjo regime. Apart from the primary goal of taking care of the future retirement needs of today’s workers, a huge pool of funds has been created which can be channeled in various sectors of the economy to finance economic growth. Today the total pension funds have exceeded 9 trillion Naira and still growing at a phenomenal rate. The strength of our financial service industry today is largely dependent on the long term accumulated pension funds.
• Capital market boom: Due to Nigeria’s improved sovereign ratings after Obasanjo paid off our National debt and our sound macro economic fundamentals, foreign investors poured in and stock market grew exponentially from a market capitalization of about 600 billion Naira when Obasanjo assumed power in
1999 to well over 10 trillion Naira when he left power in 2007.
• Telecoms revolution: So much has been written about the phenomenal success of Obasanjo’s telecoms revolution that it would be a waste of time repeating it here again. It’s to his government’s credit that we have over 150 million active phone lines today up from 400k lines in 1999 representing a phenomenal growth rate of almost 30,000% in the industry.
• Backward integration of the cement industry: Nigeria today is a net exporter of cement thanks to Obasanjo’s policies of stimulating local production by giving incentives to local manufacturers. Today hundreds of thousands of jobs have been created down the value chain and Nigeria now saves billions of dollars in foreign exchange that would have been used to import cement.
• Foreign reserves: By the time Obasanjo left power in 2007, despite the fact that by then he had paid off our external debt and he met only $3 billion in our foreign reserves when he assumed power in 1999 he was able to leave almost $50 billion in our foreign reserves with about $22 billion of it being in our excess crude account. It was with the huge savings he left that Nigeria was able to survive the global financial crisis that brought the western world to it’s knees between 2008 and 2010.
• Power reforms: Now this is a very controversial one as many people would like to assume that the Obasanjo administration failed in this regard but nothing can be further from the truth. Even though today power supply is still abysmally low Obasanjo laid the foundation for power reforms in the country. Although he did not stay in office long enough to complete the projects he started and the succeeding governments have been slow in completing these projects. It is on record that Obasanjo’s government initiated the National Integrated Power Project (NIPP) which has the capacity to solve our power problems in the interim if well implemented. Under the NIPP Obasanjo commissioned the building of 11 new power plants across the country three of which he was able to commission before he left power and others were in various stages of completion. These power plants were designed to add over
5,000 Megawatts to the national grid thereby doubling our national power supply
in one fell swoop. Though all sorts of ridiculous figures have been brandished by detractors as the amount spent on the power projects with “noting to show for it” it was later confirmed after thorough investigation that only $3.08 billion was released by the Obasanjo administration for the project and today most of the power plants have now been completed even though due to laxity of the government of the day, they are not supplying power to the national grid.
As a result of the prudent management of the country’s resources, institutional fight against corruption and dynamic economic policies of the administration, the country’s economy grew rapidly, millions of jobs were created and Nigeria attained an all time high of 19.17% in it’s economic growth rate in the fourth quarter of 2004 positioning the country as the fastest growing economy in Africa. The rest of the world also started viewing Nigeria as the next economic giant along with the BRICS countries. It was also as a result of the rapid growth that Nigeria attained during the Obasanjo years that necessitated the need to rebase our economy during the Jonathan Administration and it was discovered that Nigeria had actually overtaken South Africa to become the largest economy in Africa in terms of GDP.
Even though Nigeria is yet to attain it’s full economic potential, it will be very uncharitable to deny the phenomenal achievements of the Obasanjo/Atiku administration in significantly growing the countries economy and laying an even more solid foundation for it’s future growth. Politics asides, history will indeed be kind to them based on what they were able to achieve with the country’s economy.
*Written By Kunle Oshobi
