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January 6, 2011

Atiku Vs Jonathan: On Economy and Security

On January 13 the PDP delegates will descend on Abuja to elect a presidential candidate for the party for the 2011 polls. It is no longer a mistake to assume that in the ruling party, PDP, only two candidates remain that are of consequence in the coming election. Thanks to the Northern Leaders Forum. Never mind the squirms of people like Sarah Jubril who is contesting the decision of the Northern Leaders Forum. Atiku Abubakar and Goodluck Jonathan, both running a formidable campaign organization and wielding considerable political support, remain the two principal actors baring any last minute upsets or dissent within the ranks of PDP. On the twin issues of this campaign: the economy  (popularized by Atiku campaign organisation) and security who would you trust to deliver?

The Economy

Atiku Campaign organisation has made no secret of the the fact that economic issues form the bedrock of his campaign strategy. He started by criticising the excessive deficit financing by the incumbent administration which is above the 3% allowed by the Fiscal Responsibility Act. Then he went to Hull International Business School (University of London) and promised to lower the 30% companies tax (CITA) to 10% to encourage investors. Most recently he has written an 11 page letter to the Presidency criticising the 2011 budget as a consumption budget. A consumption budget that is leading the country towards austerity measures which he predicted will be unavoidable by 2015. Some of the economic issues raised by Atiku are as follows:

  • Jonathan’s administration is consistently over spending beyond the statutory 3% deficit level  allowed by the Fiscal Responsibility Act. (See )
  • Recent analysis of the Federal budget by Atiku claims that Jonathan’s administration plans on spending 107% of total projected revenue. Meaning that additional N400billion in borrowing is expected even with rising oil prices.
  • Costs of doing business in Nigeria remains extremely high meaning that unemployment level will continue to rise. Notwithstanding the high business set up costs resulting from bad, poor or non-existent legislation, non-existent public utilities (clean water, electricity, roads etc.) companies continue to pay huge taxes. Businesses are taxed 2% education tax, 10% VAT and 30% company tax. Atiku has presented a plan to reduce company tax to 10% and believes this will help generate inflow of investment. Of course in reality it is doubtful if this will achieve the desired aim. Reducing company tax is not the only problem. There is still no guarantee that multinational oil major would want to reinvest this additional profit from a tax break. Small businesses and manufacturing are still struggling and will continue to struggle even with a 10% tax. Tax Compliance and administration issues remain a huge issue. And there is still no reliable statistics for economic planning.

Verdict: Atiku wins.  Currently Atiku Abubakar has the best economic policy team of all the presidential candidates including the current serving economy policy team. His consistent and constructive analysis of the recent federal budget is spot on. Never mind that those speeches are probably written by Mr. Soludo. He has the backing of Mr Soludo, and probably that of the Mrs. Okonja-Iwella both of whom presided over the economy in a credible manner during their tenures as CBN Governor and Finance Minister respectively. If the election comes down to who will handle the economy better Atiku should easily take the vote. Atiku may not be an economist but his knack for spotting talent is not contested. During Obasanjo’s administration some of the few efficient government appointees that defined the Obasanjo administration were nominated by his Vice President Atiku. They included Mr. Soludo (former CBN Governor) and Mr. Ribadu (Former EFCC chairman) etc.

Security 

Nigeria has always been a hot bed of  violent protests since the emergence of the pro-democracy era, both politically motivated and civil disturbances. But the rising trend today is that of a peculiar extremist terrorism closely similar to the al-Qaeda brand and targeted at Christians, western culture and Westerners especially Americans. This raises another issue for the presidential candidates for 2011. Who among all the candidates would you trust to deal decisively with  the rising extremism? This is a growing trend. We have not really seen the end of Boko Haram. Nor the end of MEND. And with the Christmas day bombing simultaneously happening together in Jos, Egypt, and other parts of the middle east it is likely that there is a growing al-Qaeda cell in the North. President Jonathan has shown some tact by visiting the bomb victims promptly. He has also acted quickly in planning a war on terrorism, convening the National Security Council and pushing for the passage of the Anti-Terrorism bill. His handling of the extremists is still with great caution. He seems unsure of how to provide command and leadership and has relied on advice from foreign diplomats (as shown by Wikileaks). Foreign diplomats always have the interest of there principals first and on this depends the quality of there advice. They cannot be trusted 100%. Then he invited the FBI. The FBI is probably coming in to make sure that there is no link with the bombing at Jos and other simultaneous bombings in the middle east. They may not do more. Atiku himself has been quiet. Frankly too quiet on this issue. Perhaps he is trying to benefit from the events. The President himself is a product of the Niger-Delta crisis. By that I mean his nomination to be the Vice President was predicted by the fact that Niger-Delta needed to be appeased somewhat. So may be Atiku is hoping the extremists will drive people to trust him more. Jonathan’s handling of the security in the Niger-Delta is also suspect. He appeared to pick a personal fight with Mr. Okah. After the Abuja independence day bombing which MEND claimed; Jonathan disclaimed for MEND and then when on to call Mr Okah a “dying man”. May be Jonathan is careful not to be seen as being anti-North or anti-Muslim and risk loosing the vote of the North. So what is Sambo doing? He too has been quiet aloof and has made no comments or given any leadership on the issue.

Verdict: Undecided, leaning towards Jonathan. Neither Atiku or Jonathan could be trusted to deal with the security issue. This is then a peril for the next incumbent. MEND in the South and Boko Haram in the North. The country needs a credible plan to deal with, pre-empt and tackle the security issue head-on. The Emergency response and disaster management system is not there.

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