Buhari is giving Nigeria's economy the #EndSARS treatment

One year ago today, the first #EndSARS protests took place in Nigeria to call for an end to a police unit called the Special Anti-Robbery Squad (SARS). The extrajudicial murders and criminal actions of SARS  are well documented, and calls for the unit to be scrapped have happened several times over the years — never had it spilled into the streets. But October 2020 marked a turning point. For two weeks, peaceful protesters across Nigeria asked for a small price from a democratic government. It was an opportunity for Buhari, who lost considerable goodwill after a shambolic first term, to effect vital police reforms. Instead, Buhari treated the calls to dialogue over a crucial issue affecting people’s lives as a threat to his governance. What started as a brilliant expression of people power ended in the murder of Nigerians by the members of their army. Today, protesting legitimate concerns under the Buhari government is nearly unthinkable, and this isn’t even about human rights alone. Another type of murder is going on under the Buhari administration — the massacre of the Nigerian economy. 

This week, President Muhammadu Buhari presented the 2022 budget proposal to the Nigerian National Assembly. There are many reasons the budget proposal is important and I can rattle them off, but here’s what anyone who lives in Nigeria will tell you: things have never been this difficult. The misery index of the mythical land of the happiest people stood at 51.2% in May-2021, and it’s easy to see why. One in three adults of working age is unemployed, and food prices have tripled. One kilogram of turkey now sells for ₦3000 (it was ₦1300 two years ago), and 12.5kg of cooking gas now sells for ₦7,000. In a country where people already spend 61% of their income on food, food inflation isn’t just cold hard data — it’s real people going to bed hungry. The government’s plan to tackle these problems is to increase its spending — Nigeria’s 2022 budget is ₦16.39 Trillion, up from ₦10.51 Trillion for 2020. With a different President, this might be a sensible idea. But it’s hard to ignore the numbers. For instance, the total revenue available to fund the 2022 Federal Budget is estimated at ₦10.13 trillion. This means Nigeria will borrow at least ₦6 Trillion to fund its 2022 budget.

Nigeria may now be facing a revenue and debt problem 

I argued a few weeks ago that Nigeria’s real problem is that we’re not generating enough revenue. In 2020 for instance, Nigeria earned ₦3.93 trillion despite projecting ₦5.3 trillion in revenue. Yet, in 2022, the government is projecting that it will earn almost 4X of what it did in 2020. That will mean our total debt — ₦35 Trillion at June 2021 is — will exceed ₦41 Trillion next year. If you add CBN’s loans to the government a.k.a Ways and Means and Asset Management and Corporation of Nigeria (AMCON) liabilities, that’s a tidy ₦53 Trillion of debt. Already, Nigeria spends 83 Kobo of every Naira it earns servicing debts. Without any clear plan on how revenues will rise, it is taking on more loans.  

Economists like Dr Doyin Salami have long been warning that it is an unsustainable situation. Here’s Dr Salami in 2018: “We are already at positions where our debt-service to revenues have become in my view unsustainable.” And here is Dr. Salami in September 2021: “debt service to revenue at 97.7% (Jan to May 2021) suggests Nigeria's debt is already unsustainable.” 

But Dr Salami has gone beyond protesting to list five ways the government can come out of the economic crisis it finds itself. It is in his place to give these suggestions, seeing as he was appointed the Chairman of the Presidential Economic Advisory Council in 2019. Yet, Buhari’s government is treating Dr. Salami like the #EndSARS protesters, ignoring the opportunity to make decisions that will improve the lives of citizens and insisting on a path that will end in the destruction of the economy. It will not end well, and I’m convinced the Nigerian economy is hurtling off a cliff at breakneck speed. 

With that doomsday prophecy out of the way, that’s enough reporting for one day. Let me bring you up to speed on what I’ve been up to since I was a no-show on Sunday. 

Community is not a buzzword, and what I’ve been up to 

Last month, I talked about how subscriptions are coming in October, but a couple of exciting things happened. I published a profile of Enoch Adegoke, and then asked for donations. Three editions of the newsletter had the donation message. While the responses were meh in the first week, some members of the community made donations — someone even sent me Bitcoin! Another person said he would like to make a monthly donation. I appreciate everyone who donated, and I’m super thankful for all those who couldn’t contribute but whose presence and passion make Notadeepdive valuable. The donations have helped me to be able to buy the domain name and pay the $50 one-time Substack fee so that we are now www.notadeepdive.com and not www.notadeepdive.substack.com. It may seem like a small step, but we achieved this together. 

The community's generosity has given me some optimism and my hope for the future to be able to pay some of the people who pitch in regularly to help edit the newsletter — Jimi, Hassan, China and someone who’d rather not be named. But for now, I think we’ve exceeded expectations, so for a few weeks, I’d lay off from hounding everyone about donating. For now, I weirdly think this community may be able to pitch in and donate semi-regularly enough that Notadeepdive will always remain free to read. 

With that bit out of the way, I’m in Ghana and Chale; this place jumps! Some things will take some getting used to, though, like how Uber and Bolt drivers are not keen on using their maps. They  also don’t have card payments integrated, which makes me pretty sure that these drivers will owe Uber and Bolt a whole lot, since they have to manually send the cab company’s commission. Beyond that, most of the e-hailing cabs here are mostly Kia Picanto’s and it’s giving me Ibadan with the Nissan Micra vibes. 

But it’s not all serious stuff; I’ve found some dope restaurants, and I tried pig’s feet and fufu last night with some soup that was super light. I also had a Club beer, which I think gives Tiger beer a run for its money. I’ll be trying a wine bar later today before heading off to Alley bar, which I hear is also nice. 

After the weekend, I’m doing some research and it would be great to speak to Ghanaians who live in Accra, and Ghanianas in the diaspora who own businesses here. I’m one email away - olumuyiwa@notadeepdive.com and if Twitter is more your thing, send me a DM @Olumuyiwa__

What I’ve been reading

• Scott Galloway’s take on the crisis of young men refusing to go to college is halfway fascinating; I wonder if the trend holds in Africa 

• I read this a while ago, but I figured I never got around to recommending it. It’s called: “I hustled like mad in my 20s. Here’s what it cost me.” 

• Also, this NairaLife episode talked to a sales manager who made a profit of five million Naira in profit last year and now is in an N11m debt 

See you on Sunday!