A preview of 2014 By Dapo Fafowora

Most Nigerians are happy to see the end of 2013 and will receive 2014, a new year, with some positive expectations, even though most of these will, as usual, not be met. 2013 was a year of ups and downs, more downs than ups, a mixed grill of more personal pains, more tragedies, than happiness. For many it is good riddance. All the old national problems, the Boko Haram security menace, to which Pope Francis referred in his Christmas Day speech, political assassinations, kidnappings, massive public corruption, mass unemployment, the poor social and economic infrastructure persisted, making daily life more difficult, particularly for the poor. As former President Obasanjo stated it in his 18-page letter of December 5, to President Jonathan, the ‘nation is bleeding’ from his inaction and incompetence.

Foreign and local analyses indicate that the domestic economy achieved a growth rate of 6.8 per cent in 2013, slightly lower than the forecast of over 7 per cent. Nigeria’s economic fundamentals remain quite strong. There is greater stability in the foreign exchange market and inflation is under control. But this impressive growth rate has not translated to more jobs or a better life for the poor. The rich have continued to get richer, while the poor are getting poorer. More and more personal sacrifices are demanded of the poor, while the economic and financial rewards continue to go to the rich. This trend has increased social tensions and crimes in the country, as the poor, in desperation, take the law into their hands. It is a classic prescription for social conflict in the country.

The impressive growth rate, one of the fastest in Africa, had been achieved and maintained over the last three years. The average for the rest of Africa in 2013 was about 5 per cent. The high growth rate was the reward for the tough economic adjustment measures introduced some thirty years ago, which aimed at restructuring the entire economy through its diversification and the allocation of a bigger role for the private sector in the domestic economy. But the high growth rate, particularly in communications (8%) and construction (2 %), was still far less than the target of 10 per cent envisioned for the economy to make Nigeria a truly emerging economy by the year 2020. It was fuelled largely by erstwhile and favourable trends in the oil sector and higher levels of foreign direct investment (FDI).

But by the second half of the year, Nigeria was beginning to lose 25 per cent of its oil production to oil theft. In fact, the growth rate would have been higher but for this vast oil theft and customs waivers which had a negative effect on national revenues. By the third quarter of the year, there were fears that Nigeria was going broke. Revenue allocation to the states fell sharply. The Federal Government could not meet some of its statutory financial obligations. The minister of finance denied this, but the evidence is overwhelming that the federal and states governments are all facing a cash crunch. Many public sector projects had to be abandoned due to lack of funds. The trains are now partially rehabilitated and offering limited services. But the Nigerian Railways needs additional funds to make it more functional. The narrow gauge has to be changed to the standard gauge to improve its overall services. Kenya has just announced that it is embarking on the building of a new standard gauge for its train services. It is the kind of investment that Nigeria needs very badly if it is to modernise its public transportation, still in a deplorable state. If the East-West road is completed, it will cut travelling time to the East by half.

What are the prognoses for 2014? Things will certainly be tougher for the country than last year. With dwindling oil revenues, and the massive corruption in the oil sector, where some $10 billion in revenue is reported missing, it is unlikely that the economy can sustain its current growth rate of over 6 per cent in 2014. Some indication of this can be seen in the 2014 federal deficit budget that is almost a trillion naira lower than the budget for 2013. As usual, capital expenditure was barely a third of recurrent expenditure, an indication that efforts to reduce the cost of governance in Nigeria have failed. The federal bureaucracy has continued to grow in size and incompetence. This means that many of the public sector projects envisaged in 2014 will either not be completed, or will be abandoned totally. There will be less job creation and increasing pressure on social services. The power sector is unlikely to witness any significant improvement, as the investments needed in the sector cannot be made due to rising financial constraints. If Nigeria achieves greater stability in its power supply, its economy can grow by 10 per cent. Led by recovery in the US economy, the global economic recession is weakening and Nigeria should benefit from this favourable trend. But there will be reduced demand for its oil, due to emerging alternative sources of oil, particularly shale oil. China still has a deficit of oil supplies, but it is now relying more on Angola for its oil supplies than Nigeria. With all these negative economic trends, economic growth in 2014 will be much slower and lower, in the region of 5 per cent.

At the political level, 2014 promises to be an exciting, if not violent year. It is the year before the presidential elections in 2015. Already, the political landscape is changing with the emergence of a new united opposition party, the All Progressives’ Congress (APC), an amalgam of nearly all opposition parties in the country. President Jonathan is facing critical challenges to his political future, including his ambition to seek a second term in office. His ruling party, the PDP, is in disarray, with many of its governors and members of the National Assembly defecting to the opposition. This development represents a serious challenge to his hold on power, already slipping. Instead of being considered a national leader, he is beginning to look increasingly as the leader of an ethnic group, to which he is now forced to withdraw. The open and savage attack on Jonathan in Obasanjo’s open letter to him, (a case of the kettle calling the pot black) has now forced into the open the internal divisions in the PDP. President Jonathan is fast losing political support in the country, and will have considerable difficulty in getting the PDP presidential nomination for the 2015 elections.

Former President Obasanjo has made it clear that he is not leaving the PDP. His strategy is to make it impossible for President Jonathan to win the PDP nomination for 2015. With the massive withdrawal of support for Jonathan in the North, Obasanjo’s strategy may work, particularly if a Northern candidate is chosen, instead of Jonathan, as the PDP presidential candidate. There is speculation that Obasanjo has Sule Lamido, the PDP Governor of Jigawa, in mind as the PDP presidential candidate. This explains why Lamido has not joined his colleagues in defecting to the APC. He is playing the waiting game.

Now, if he gets the PDP presidential nomination, there will almost certainly be fresh political re-alignments, with the PDP members, who have recently defected to the APC, returning to their old Party, the PDP. They defected from the PDP simply because they want power to return to the North, an ambition supported by the APC. Obasanjo will not work for the APC to replace his party, the PDP, as the ruling Party in Nigeria. He cannot be accused this time of duplicity as he was rightly accused in the 2003 presidential elections when he outfoxed the AD. He has all but made it very clear that he will remain with the PDP. Now, if there is reversed defection from the APC to the PDP, this will place the APC on the horns of a dilemma. The political alliance may break up, as the sole objective of the alliance is to gain control of the federal government.

Altogether, it will be for both the PDP and the APC a ‘do or die’ election. We may expect a lot of blood letting over this in the run up to 2015. Obasanjo has already claimed that Jonathan is training some snipers for the election, and that he has some 1000 people on his watch list, with some of them marked for possible elimination. Jonathan has referred the claim to the security agencies for investigation. But it is a claim that cannot be proven, and the security agencies will report that there is no basis for the claim. Whether it is true or not, the allegation has increased political tension in the country, a disincentive to foreign investment this year, as potential investors will place their plans on hold until after the 2015 elections. This is the centenary anniversary of Nigeria’s amalgamation as a country. But we will have to hold our breath as the politicians determine Nigeria’s political future in 2014 and after.

May I avail myself of this medium to wish all readers of this column a happy and prosperous New Year.

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