Speaker 1: From Bloomberg News and iHeartRadio. It's the big tag. I'm Wescasova.
Speaker 1: Today Nigeria's next president has a serious mess effix. It
Speaker 1: is a final lab in the preparations towards the election.
Speaker 1: Also today's Niger's pat got to the polls. Nigeria's presidential
Speaker 1: candidates are making their final bids for public support and
Speaker 1: what is expected to be one of the most closely
Speaker 1: contested elections in years. Nigeria's citizens vote for a new
Speaker 1: president on February twenty fifth, and it's hard to envy
Speaker 1: the candidate who will ultimately succeed the current president, Muhammadu Buhari,
Speaker 1: who's led Nigeria since twenty fifteen. The country hill handover
Speaker 1: is in turmoil. Nigeria's public debt is piling up, inflation
Speaker 1: is high, there are shortages of gasoline and electricity, and
Speaker 1: even paper currency. Nigeria is Africa's largest economy by far.
Speaker 1: Its output is twice the size of its fourteen West
Speaker 1: African neighbors combine, and by twenty fifty it's set to
Speaker 1: become the third most populous nation on Earth, after China
Speaker 1: and India, with an expected four hundred and fifty million people.
Speaker 1: If the government can't turn things around, it will have
Speaker 1: consequences not just for Nigeria and the region, but the
Speaker 1: rest of the world too. I asked my Bloomberg colleagues
Speaker 1: Neil Munchi and Lagos, Nigeria and Ruth Olarunbi in Abuja,
Speaker 1: the capital, to talk about the candidates vying to take
Speaker 1: all this on and the monumental tasks the winner will face. Neil,
Speaker 1: Nigeria is heading into a presidential election at a time
Speaker 1: of great upheaval in the country. Can you describe what
Speaker 1: life is like in Nigeria for the average citizen right now?
Speaker 1: It's incredibly difficult. I think some Nigerians would describe it
Speaker 1: as you know, the most difficult situation the country has
Speaker 1: been in decades. The number of out of school children
Speaker 1: is more than any other country in the world. Right
Speaker 1: twenty million kids didn't go to school. Last year, the
Speaker 1: Naira hit an all time low. Half of adults were
Speaker 1: unemployed or underemployed. Thousands of young Nigerians are trying to
Speaker 1: leave the country to go to the UK or Canada
Speaker 1: or the US because of the lack of job opportunities
Speaker 1: and sort of the lifeblood of the economy, which has
Speaker 1: been for decades. Crude oil is letting the country down
Speaker 1: in a big way. Production has fallen dramatically. The country
Speaker 1: is not bringing in as much revenue as it needs to.
Speaker 1: Nigeria produces a lot of oil, but the revenue from
Speaker 1: that oil is shockingly small. Why is that most of
Speaker 1: the revenue over the last couple of years has been
Speaker 1: eaten up by fuel subsidies. So Nigeria produces a lot
Speaker 1: of fuel but doesn't refine almost any at all because
Speaker 1: they don't have refineries, so they wind up just exporting everything. Yeah,
Speaker 1: so there are refineries, but basically they don't function, and
Speaker 1: they export the crude and then end up buying back
Speaker 1: expensive refined products like petroleum and diesel and that kind
Speaker 1: of thing. And then the government subsidizes it so that
Speaker 1: at the pump gasoline is one of the cheapest. It's
Speaker 1: one of the cheapest pump prices in the world, and
Speaker 1: so the government ends up spending ten billion dollars a
Speaker 1: year subsidizing fuel, heating up most of its revenues. If
Speaker 1: you add the fact that even production is low because
Speaker 1: of thefts hit thefts, and so that is also a
Speaker 1: contributing factor. To why Nigeria doesn't make a lot of
Speaker 1: money from revenue. How is the oil stolen? We have
Speaker 1: the sophisticated at once who still this oil to pots,
Speaker 1: it's through the black markets to exports to another country
Speaker 1: and make a lot of money for themselves. Then there
Speaker 1: are the elements also who do this as well that
Speaker 1: the government says that is trying to clap down oil.
Speaker 1: So one thing I just want to add to what
Speaker 1: Ruth was saying that you know, last year, officials set
Speaker 1: that a fifth of the country's oil production was stolen
Speaker 1: from the pipelines, right, so this is like hundreds of
Speaker 1: thousands of barrels a day being taken out of Nigeria's
Speaker 1: official production. It's a massive amount of oil being stolen
Speaker 1: all the time essentially. But at the same time as
Speaker 1: this kind of criminality in the Delta has sort of
Speaker 1: ramped up and robbed the country of these revenues, this
Speaker 1: issue of banditry, what's sort of colloquially known in Nigeria's bandits,
Speaker 1: has come up and these are basically roving gangs of
Speaker 1: ak forty seven wielding motorcycle riding men. This issue was
Speaker 1: sort of isolated to the northwest of the country five
Speaker 1: six years ago, but has slowly as the economy has deteriorated,
Speaker 1: spread across the country. The kinds of kidnappings we're talking
Speaker 1: about are not just kind of going into villages and
Speaker 1: kidnapping individuals, but you know, setting up fake roadblocks on
Speaker 1: highways and kidnapping entire bus loads of people going to
Speaker 1: schools with hundreds of children and kidnapping them into the
Speaker 1: bush for ransom. This is something that affects people up
Speaker 1: and down the economic sort of chain, as in politicians,
Speaker 1: prominent politicians, relatives have been kidnapped, soldiers down to sort
Speaker 1: of ordinary Nigerians commuting kind of thing. And while it
Speaker 1: was once isolated to the far northwest, it's now the
Speaker 1: kind of thing that happens all over the country because
Speaker 1: the government has never been able to get a handle
Speaker 1: on it, and no one has prosecuted for these crimes.
Speaker 1: So these kind of gangs have sprung up all over
Speaker 1: and everything that you're describing has also had a terrible
Speaker 1: effect and Nigeria's entire economy, its ability to service its debt,
Speaker 1: to borrow money. What is the state of Nigeria's economy
Speaker 1: overall right now? It's not great I was going to
Speaker 1: say it's in shambles, but I will just say that
Speaker 1: it's not great. Like I mentioned earlier, we have increasing
Speaker 1: influation that is not subsiding despite Central Bank's effort to
Speaker 1: tim it. We have borrowing that is running high. The
Speaker 1: IMF said, I think to us last year that IMF
Speaker 1: said that Nigeria might spend one hundred of its endings
Speaker 1: to service its borrowing. Then if your borrowing is increasing,
Speaker 1: your interest also increases. And if you don't have any
Speaker 1: money left to you know, to develop the country a bit,
Speaker 1: everything collapses if you're if you're out of money, and
Speaker 1: then we see investors confidence in the economy even going down.
Speaker 1: You see people who have I was talking to an
Speaker 1: invest agility and where people they're not able to repatriated
Speaker 1: funds out of Nigeria because of this currency issue. Corencis
Speaker 1: city that is the last city. So that is also
Speaker 1: a big problem. That's that's Nigeria is facing. Yes, So
Speaker 1: I mean, Ruth, you mentioned this currency shortage thing that's
Speaker 1: happening right now, and this you know right now across
Speaker 1: the country there are hours long lines at ATMs and
Speaker 1: at bank branches to pull out notes right niro notes
Speaker 1: because the Central Bank implemented this sort of plan just
Speaker 1: over the last six seven weeks to replace the hight
Speaker 1: denomination bills, and the rollout was so chaotic that this
Speaker 1: incredibly cash intensive economy is sort of like ground to
Speaker 1: a halt. If you run sort of a dan foam
Speaker 1: minibus in Legos, you are now in a position where
Speaker 1: you can't accept old no, but there aren't enough new
Speaker 1: notes for customers to pay you with, so those customers
Speaker 1: are stranded. It's sort of it's cascading through the economy
Speaker 1: and at the same time, and this is sort of
Speaker 1: the in a way, the kind of multidimensional dysfunction that's
Speaker 1: happening right now. There's fuel shortage, so people are sleeping
Speaker 1: in their cars overnight at gas stations around the country
Speaker 1: because they don't have enough fuel to sell. The Nigerian
Speaker 1: economy is a really difficult spot right now for small
Speaker 1: businesses actually who rely on generators to foil the power
Speaker 1: their businesses. Because there's fall shortage that cast shortages, many
Speaker 1: of them are closing. And then if you want to
Speaker 1: buy from the black markets, you buy at maybe four
Speaker 1: times the rates of the the official rates, which eats
Speaker 1: into their profits. And then when you don't people have
Speaker 1: the money to buy anything in the falls place, and
Speaker 1: you can't withdraw more than five thousand i from from
Speaker 1: from any end points, you know, everything just becomes soul
Speaker 1: hard and sole difficult, even for everybody, including they included
Speaker 1: the middle class, which is increasingly shrinking now, so did
Speaker 1: the poorest of the people in the country. Neil and Ruth,
Speaker 1: you've very vividly described what Nigeria and as people are
Speaker 1: facing as they head into a presidential election. All of
Speaker 1: the candidates are promising to fix many of these problems.
Speaker 1: The current President Bouhari promised when he was elected to
Speaker 1: his first term to fix a lot of these problems too,
Speaker 1: and it didn't quite work out. How much of Nigeria's
Speaker 1: current situation really can be put at President Bouhi's feed.
Speaker 1: You know, Buhari took office just before the twenty fifteen
Speaker 1: twenty sixteen oil price crash, right, so he was dealt
Speaker 1: a pretty bad hend. But many economists argue that the
Speaker 1: policies that he implemented and stuck to kind of exacerbated
Speaker 1: Nigeria's problems so that it was barely recovering from that
Speaker 1: recession when COVID hit and it sunk into another recession.
Speaker 1: And the things that the candidates are promising to do
Speaker 1: are some of these kind of simple, politically sensitive sometimes
Speaker 1: reforms that the IMF and the World Bank have been
Speaker 1: sort of in a way begging Buhari to do for years,
Speaker 1: and that is unify the multiple exchange rates, dropped some
Speaker 1: of the import restrictions that he put in place, and
Speaker 1: cut this costly fuel subsidy. They're all promising to do
Speaker 1: that in one way or another. But at the same time,
Speaker 1: you know, in recent weeks, Moodies downgraded the country and
Speaker 1: their reason was that despite the promises from these main
Speaker 1: candidates that they're going to implement these reforms, there are
Speaker 1: sort of political, structural, institutional constraints that make the ratings
Speaker 1: agency not believe that it's going to happen as quickly
Speaker 1: as it needs to. Our conversation continues after the break.
Speaker 1: President Barhari has now served two terms, so he's term
Speaker 1: limited by the constitution. He can't run again. Can you
Speaker 1: describe who are the candidates now trying to take his place? Yeah, So,
Speaker 1: Bola Tanoubu is the ex governor of Lego State, who
Speaker 1: is the ruling party candidate from the All Progressives Congress
Speaker 1: and they run the election infrastructure, and he is I
Speaker 1: think most observers probably think he's the front runner. His
Speaker 1: major sort of opponent is a Tico Abubakar who's an
Speaker 1: ex vice president and a perpetual candidate who is running
Speaker 1: on the People's Democratic Party which is the main opposition party,
Speaker 1: who also has a very good shot. And Peter Obi,
Speaker 1: an ex governor, is running under the Labor Party, which
Speaker 1: is a very small party, has very little in the
Speaker 1: way of infrastructure or resources, which makes it incredibly hard
Speaker 1: to win an election in Nigeria. Ruth, how does the
Speaker 1: election process work in Nigeria? So the winning candidates has
Speaker 1: to stick here twenty five percent of votes in at
Speaker 1: least twenty six states and also in addition to that
Speaker 1: has to get the majority of the votes and it
Speaker 1: also has to have the majority of the votes in total,
Speaker 1: so that it makes predicting who we win a bits complicated.
Speaker 1: Peter Obi has been getting a lot of attention in
Speaker 1: the media. Can you tell us about him? So Obi?
Speaker 1: He stands for conservatism in public spending. He wants to
Speaker 1: wants to limit borrowing as well. Last year, Nigeria spent
Speaker 1: about almost ten billion dollars on subsidiary payments and Obi
Speaker 1: feels this is a this is a waste of money.
Speaker 1: Everything it stands for actually speaks to majority of the
Speaker 1: Nigerians who also think that the government has been wasteful
Speaker 1: in terms of spending and that the government is not
Speaker 1: focusing or providing necessary things that the people of the
Speaker 1: country needs to move forward. So ob same progressive in
Speaker 1: terms of providing those things and conservative in terms of
Speaker 1: government spending. So that makes them very popular with the youth,
Speaker 1: with the middle class, with the high earners, and also
Speaker 1: with the people because it seemed to be also is
Speaker 1: a businessman, so it seemed to be market friendly and
Speaker 1: people associates with that and the fact that it's an
Speaker 1: outsider makes them interesting to back. As far as young
Speaker 1: people go. They wants somebody that's his fresh with fresh ideas,
Speaker 1: somebody that can take the economy. Ruvam Pete out puts
Speaker 1: it on the right spots. So I was slightly different
Speaker 1: take on it in that Obie is younger, but not
Speaker 1: young right, he's sixty two. He is running on a
Speaker 1: third party ticket, but that's because he lost the ticket
Speaker 1: for one of the major parties, right, he was the
Speaker 1: VP candidate last time around. He was a banker and
Speaker 1: a governor for many years. Right. I think his rise
Speaker 1: in popularity, which is, as Rive said, really driven by
Speaker 1: young people in the country. And you know, six months
Speaker 1: ago last year, he could have been dismissed as sort
Speaker 1: of a social media phenomenon in a way, And what
Speaker 1: we've seen over the last few months is that it's
Speaker 1: much more real than that. That there is kind of
Speaker 1: a real ground swell of support for him. And I
Speaker 1: think many observers would say that the reason he's got
Speaker 1: this support is the frustration that many young Nigerians have
Speaker 1: with the major parties and their candidates, who are two
Speaker 1: older men who have been in politics forever essentially, who've
Speaker 1: been you know, leaders of both of their parties for
Speaker 1: this entire time. Atiku Abubakar from the People's Democratic Party
Speaker 1: has run in every election since democracy returned after being
Speaker 1: the Vice president. Tanoubu Bulletinobu was the governor of Lego
Speaker 1: State and has been a national leader of his party.
Speaker 1: Both of them come with a lot of baggage, and Obi,
Speaker 1: while not being a sort of true outsider, does represent
Speaker 1: this kind of third way and has been endowed with
Speaker 1: a lot of meaning by these young people as a
Speaker 1: way to sort of change away from the old guard
Speaker 1: of politics. Can he win? He's not gonna win. I
Speaker 1: think he is going to do better than any third
Speaker 1: party candidate has ever done, which is something, you know
Speaker 1: what I mean? It is, It is something. But the
Speaker 1: institutional kind of constraints are so great. It's sort of
Speaker 1: you need a party infrastructure in every state, in every ward,
Speaker 1: you know, getting people out to vote, and in Nigeria
Speaker 1: it is still a fact that vote buying happens everywhere.
Speaker 1: Right again, people are very poor in Nigeria and ultimately
Speaker 1: the decision that the president makes down the line is
Speaker 1: not really going to change their lives that much. But
Speaker 1: two thousand nif five thousand naira on voting day really will.
Speaker 1: And that kind of thing takes money that the Labor
Speaker 1: Party doesn't have and the major parties do, and so
Speaker 1: you think ultimately the ruling party candidate will prevail. I'm
Speaker 1: a little torn. I don't know, Ruth, what do you think.
Speaker 1: I'm kind of torn. I had thought for a long
Speaker 1: time it'd beat Tanubu in a walk off. Now I
Speaker 1: think with this currency shortage, the fuel shortage. People are
Speaker 1: set up with the APC and a teak who could
Speaker 1: somehow sneak it out. Yeah, I agree with that, but
Speaker 1: if you also again to go back to what you
Speaker 1: said about vote buying at the election, that can't give
Speaker 1: more because at the last election I witness candidate supporters
Speaker 1: can given people say five thousand ira and somebody comes
Speaker 1: back and says how much are you giving and they
Speaker 1: will tell him, oh, I was given five thousand ira
Speaker 1: and say okay, I'll give you ten thousand iraq. So
Speaker 1: it's really hard to call. Who's going to win this
Speaker 1: election is a matter of who is mother spirit, who
Speaker 1: has the most money. I just wanted to say, like Ruth,
Speaker 1: as a young Nigerian, how do you feel about this?
Speaker 1: You know the trajectory of the country's u the sort
Speaker 1: of what comes next. As the jock Nigerian who has
Speaker 1: a kid in Nigeria, it's carry for me. The indices
Speaker 1: are not painting a good picture. And then you know
Speaker 1: you have try. We have strike issues because the government
Speaker 1: is not paying staff salary, lecturer salary on time. So
Speaker 1: the last time they went on strike was for about
Speaker 1: eight months. Students were out of school for eight months
Speaker 1: and the worlds went on. You know the lagging behind.
Speaker 1: You have this matter of inflation that it's eaten into
Speaker 1: your purchasing power. You have electricity issue. I was telling
Speaker 1: a friend the other day that I saw a forty
Speaker 1: year old article that was talking about fixing electricity in Nigeria.
Speaker 1: That was a few months before I was born. And
Speaker 1: I am writing about I'm talking about electricity issue in Nigeria.
Speaker 1: I'm talking about not having water, not having these issues.
Speaker 1: But I will give the three contenders credits too, because
Speaker 1: it is in their best interests that the economy improves.
Speaker 1: Ruth and Neil, thanks so much for talking with me today.
Speaker 1: Thanks absolutely, It's my pleasure when we come back. How
Speaker 1: Nigeria's next president can begin to turn the country around.
Speaker 1: Which problems should Nigeria's next president try to tackle first?
Speaker 1: I asked Chedda Wanza. He's lead partner and head of
Speaker 1: research at SBM Intelligence, that's a geopolitical consultancy in Nigeria. Chedda,
Speaker 1: one way that Nigeria has tried to boost its economy
Speaker 1: is both to get aid from the World Bank and
Speaker 1: other institutions and also to attract international investment. And yeah,
Speaker 1: that's been very difficult. Can you describe those efforts and
Speaker 1: why they haven't been very successful? Your average investor is
Speaker 1: in to make a profit, and very unfortunately when an
Speaker 1: investor chooses to take a long term view, Nigeria generally,
Speaker 1: except with very few sectors, has not been very good
Speaker 1: in terms of return for investment. And a lot of
Speaker 1: this is because politics get in the way of everything,
Speaker 1: and because of that, it prevents certain kinds of investors
Speaker 1: from coming to put down money in an economy where
Speaker 1: they know that getting on the wrong side of someone
Speaker 1: in power could mean that they lose their investments, and
Speaker 1: you have so many different competing, competing interests. I tend
Speaker 1: not to like the narrative when they say, oh, Nigeria
Speaker 1: is a country of two hundred and fifty tribes. And
Speaker 1: the reason that I don't like that is because a
Speaker 1: tribe is a very small group there. So I'm from
Speaker 1: the Evil speaking part of Nigeria. So my historical nation
Speaker 1: would be the Ebo nation. They're probably thirty two forty
Speaker 1: million Ego people, only maybe about five million, six million
Speaker 1: people from Kroatia. And you called Kroatia a nation, but
Speaker 1: you call the Ebo people a tribe. It doesn't work
Speaker 1: that way. Nigeria, like most African countries, is a country
Speaker 1: of very many nations who have competing interests, and these
Speaker 1: interests we need to learn how to compromise. So, unfortunately,
Speaker 1: because of our history of military dictatorship, we learned how
Speaker 1: to try to push things true by force. We've been
Speaker 1: a democracy for twenty four years now, so we are
Speaker 1: still in the price of learning how to nego ships
Speaker 1: and recompromises. And again it's a message process. Another big
Speaker 1: problem that Nigeria faces is enormous debt. Nigeria pays a
Speaker 1: lot of money justice service, it's debt. How can Nigeria
Speaker 1: overcome that? What is the way to grow the economy
Speaker 1: in a way that can turn that around? The government
Speaker 1: needs to get off its backside and do the work
Speaker 1: of bringing in the large formal economy into the taxation bracket.
Speaker 1: When you look at Nigeria's GDP figures, you'll see that
Speaker 1: the oil industry contributes about eight point nine percent, somewhere
Speaker 1: between eight and nine percent of Nigeria's GDP. However, when
Speaker 1: you look at government's revenues, the oil industry contributes somewhere
Speaker 1: depend depends on which point in time you're looking at
Speaker 1: somewhere between eighty five and ninety four percents to government revenues.
Speaker 1: That's an anomally. You have a lot of other parts
Speaker 1: of the economy that contributes more to the economy than
Speaker 1: the oil industry. Report. The government is so laser focused
Speaker 1: on oil that it leaves every other thing. So what
Speaker 1: that means is that we are taking on a lot
Speaker 1: of depths. A lot of incidents have happened outside Nigeria's control.
Speaker 1: That essentially means that the country is not generating as
Speaker 1: much from the oil industry anymore. Yet we are still
Speaker 1: taking on debt because at the end of the government
Speaker 1: ask commitments, there's there's a large civil serfit that needs
Speaker 1: to be paid, There's there are the security services they
Speaker 1: need to be paid, and those are just the basic things.
Speaker 1: So they're taking on they're thinking on loans and basically
Speaker 1: kicking the count down your route. Those in charge of
Speaker 1: Nigeria's government have made promises to make things better, some
Speaker 1: of them along the lines you're describing, and yet things
Speaker 1: have arguably only gotten worse. When you look ahead, what
Speaker 1: do you see for the future of the country. Are
Speaker 1: you optimistic that Nigeria can make things better. I think
Speaker 1: that there's a lot of pain that we need to
Speaker 1: go through in order to set us our rights. Consider
Speaker 1: Nigeria to be like a huge old tanker that needs
Speaker 1: to turn around to tourne it. You need somebody very
Speaker 1: strong to turne the will, So think of an old
Speaker 1: tanker on the Swisscanal. There will be a lot of
Speaker 1: pain then making that tone. But and that tone is
Speaker 1: successfully done, then any long time Nidress prospects are very good.
Speaker 1: So the key thing is how do we manage dot
Speaker 1: pirodo pen jade Wanza. Thanks so much for talking with
Speaker 1: me today, Thank you for having me, Thanks for listening
Speaker 1: to us here at The Big Take. It's a daily
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Speaker 1: Our original music was composed by Leo Sidrin. I'm Wescasova.
Speaker 1: We'll be back tomorrow with another big take. You Don't
Speaker 1: don on the door to the Body