On Wednesday, the Buhari-led administration said it had revived the e-wallet system for fertiliser allocation and distribution a year after suspending it. This comes on the backdrop of the second quarter figures by the National Bureau of statistics (NBS) which revealed that Nigeria was officially in a recession. The Minister of Agriculture, Audu Ogbeh, made the announcement of the policy change after the weekly Federal Executive Council meeting, saying the policy would however be modified to address the challenges that made it unsustainable. The agricultural policy is not the first policy that the government has flip-flopped on since taking executive powers in May 2015. These reversals are often not costless to Nigerians and in some cases could have been simply avoided.
E-wallet fertilizer scheme
The e-wallet system was introduced as part of the Growth Enhancement Support (GES) scheme by Goodluck Jonathan’s administration to address the problems of middlemen in the fertiliser supply chain, which experts identified as a challenge for farmers at the time. The system was established to replace a fertilizer subsidy scheme, that was riddled with corruption and malpractices by both fertilizer producers and government officials. As part of the scheme, E-wallet installed phones were given to farmers. It allowed them purchase fertilizers themselves, and also receive payment directly from the federal government. The policy was considered successful as about 4.2 million farmers were registered within its first year and more than 10 million were said to have been registered at the height of its implementation.
However, the policy was suspended by the Buhari government in 2015 as it was deemed too costly, and riddled with corruption like the scheme it sort to replace. The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, said the cost of GES scheme had become too heavy a burden for the government to bear, even though government debt through agricultural subsidy is common practice in many countries, including the European union bloc which operates the common agricultural policy.
The decision of the government in itself is not the problem, as they have to make tough decisions that they deem in the nations interest. But the reversal of policies for the exact reasons that they were contested against in the first place shows poor judgement and calls into question the administrations’ competence in the nations economic affairs. The decision to scrap the policy must have cost some farmers their jobs, business contacts, and investments which could have been avoided had the benefits and costs of the program been better analysed.
Exchange rate peg reversal
The government’s decision to reverse the agricultural policy came roughly two months after it decided to abandon the currency peg it introduced last year. The currency peg fixed the exchange rate of the Naira to the US dollar at 197 and widened the disparity official rate and black market rate. From its inception, the policy was criticised as it was anticipated that it would drive foreign investors away at a time of falling oil revenues as well as deplete Nigeria’s foreign reserves of just over $30 billion. The decision was taken despite these criticisms only to be abandoned three months ago for those same reasons.
But the damage had been done and the inevitable, postponed. Investors pulled out of the country for fears that their investments would erode in value if they invested at the fixed rate, the US dollar became scarce as a result of the exits, and foreign reserves have been run down to $26 billion. Although the reversal was welcomed by investors as they could better value their investments, the policy reversal would certainly have them worried about the consistency of this administration and the long term safety of their investments. Once again the policy decision proved costly as Nigerians suffered job losses and businesses were handicapped by the lack of access to foreign exchange.
Mend Amnesty Scheme
As soon as he took office, president Buhari similarly suspended the amnesty programme introduced by late president Yaradua’s administration to appease ex militants – MEND (movement for the emancipation of the Niger Delta) indicating that he had no appreciation for the reasons it was instituted. The amnesty programme was introduced in 2009 to address the series of attacks on oil pipelines by the militant group and to enlist their services in protecting pipelines from future vandalism. Although the program did not bring attacks to a halt, it pacified them to an extent.
In a significant turn of events, President Buhari announced in May the reinstatement of the controversial amnesty program for militants in the Niger Delta region to stem a recent wave of attacks that have threatened oil production. Yet again he reinstated the program for the exact same reason it was introduced in the first place.
In some cases the government’s original decision may not have been wrong but a poor execution amidst a recession have forced the administration to revert back to the status quo, however imperfect. These significant reversals just over a year into his four year term shows worrying signs about Buhari’s ability to assess economic and political situations as well as account appropriately for the mood of the nation in policy making.
