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Presidential indulgence and disturbing prospects 09 Sep 2024

The President Bola Tinubu administration has newly acquired an Airbus aircraft as an addition to the presidential fleet. The acquisition has rightly ignited public condemnation in a country grappling with severe economic challenges. This lavish purchase, estimated at over $100 million, starkly contrasts with the deepening poverty affecting millions of Nigerians. It also raises serious questions about fiscal responsibility and governmental priorities.

Reports indicate that the nearly 15-year-old aircraft, previously owned by an unnamed Saudi prince, was purchased through an American aviation firm L & L International LLC. The jet, now Nigeria's Air Force One with registration number 5N-NGA, features an elaborate VIP configuration, including luxury amenities that seem out of place in a country where basic necessities are out of reach for many.

Adverse macroeconomic background

This acquisition comes as Nigeria, formerly Africa's largest economy, faces acute macroeconomic challenges. According to the National Bureau of Statistics, the July 2024 headline inflation rate was 33.40%, although it was the first time in the last 15 months that the consumer price index fell. A pot of the staple jollof rice dish hovers at around N20,000.00 (or 28% of the new monthly minimum wage) as per SBM Intelligence’s Jollof Index. Unemployment is also at a staggering 33%, and more than 40% of the population are living in extreme poverty.

The Nigerian economy, which is heavily dependent on oil exports, reels from global price fluctuations and pandemic aftershocks. The World Bank estimates that COVID-19 alone pushed an additional 7 million Nigerians into poverty in 2020, with millions more facing similar fate since then. The country's economic recovery has been sluggish. With trend GDP growth rate since the pre-pandemic years still failing to keep pace with population increase, Nigerians have been getting poorer.

The comparator economies have divergent economic indicators to those of Nigeria. For instance, while poverty is growing in Nigeria, it is declining in countries including India and Bangladesh. The country is also a laggard when its GDP per capita of approximately $2,085 is compared with those of its African counterparts, such as South Africa ($6,994) and Egypt ($3,876). This disparity becomes even more disturbing in light of Nigeria's vast oil and gas resources, raising questions about resource management and wealth distribution.

Lack of justification

Set against this economic reality, it is arguable that the country could not afford the new presidential plane. Perhaps because of this, its purchase was an opaque transaction. There is the suspicion that the aircraft actually cost significantly more than the figure that has been made publicly available. Aviation experts suggest it could cost between $250 million to $400 million. In the face of more important national needs, including schools and hospitals, the purchase is unjustifiable.

As many, including economists and financial analysts, have argued, this presidential jet is hardly morally or financially justified in a country with crumbling infrastructure. The high acquisition cost, in addition to the costs of operating and maintaining it, could have been directed to support public provision of healthcare, education, and physical infrastructure projects, which would have more beneficial economic impact. Indeed, the national electricity grid could be bolstered with the funds to drive economic productivity.

Another area where the use of the fund for the jet plane could have been more beneficial is boosting the welfare of the Nigeria Police Force, with the potential to improve the professional morale of its rank and file and senior officers, thereby improving its contribution to the security of the country. Currently, an officer of the police earns a meagre N43,923.00 (about $30) per month. This figure amounts to well below the UN's international poverty line of $2.15 daily and grossly insufficient to cover the basic living expenses of an individual in most Nigerian cities, let alone support a family anywhere. Recent reports of officers going unpaid for up to 11 months make the situation incomprehensible.

Presidential indulgence

President Tinubu, who assumed power in a contentious 2023 election in which he received fewer votes than the combined opposition, faces mounting criticism for his governance style. Some citizens describe him as aloof and disconnected from the realities of ordinary Nigerians. His campaign slogan, "Emi lo kan" ("It's my turn" in Yoruba), is now seen by critics as foreshadowing a presidency marked by a sense of entitlement rather than service. The aircraft purchase only serves to give credence to such characterisation.

While the administration has tended to pursue prestige or legacy projects, including the Lagos Calabar Coastal Road, the aircraft suggests the President is also prioritising his personal comfort over addressing the pressing needs of the populace. This approach risks further eroding public trust in the government and serves to increase the urge for civil unrest by people who have been impoverished by the direct consequences of key economic policy of the administration.

The purchase decision may reflect what is termed by psychologists as "power intoxication," a phenomenon where leaders in positions of extreme power experience reduced empathy and increased self-focus. This cognitive shift can lead to decisions that seem logical to those in power but appear disconnected and insensitive to the general public. This disconnect is particularly glaring in Nigeria, given the country's economic challenges, including widespread poverty.

India's Prime Minister, Narendra Modi, who is presiding over a fast-growing economy, often flies commercially for domestic trips. And South Africa is considering selling its presidential jet to cut costs. But Nigeria has moved in the opposite direction of fiscal prudence by expanding its presidential fleet at a great public expense.

Avoiding negative backslash

The Nigerian economy has over the years been weakened by fiscal mismanagement. In the 1980’s and the 90’s, this provided an excuse for military coups that produced regimes that did worse than the civilian administration they had complained about. While a return to the jackboot of military autocracy is abhorrent to many Nigerians that witnessed the avarice and incompetence of that era, the Nigerian democracy remains nascent and in need of nurture by good governance that lifts the quality of life of the citizens.

Nevertheless, the current tendency towards indulgence by the few people in power causing economic pains to the vast majority of the people could have significant consequence even in the democratic context. This could include precipitated public protests and demonstrations; increased civil disobedience, including tax boycotts and strikes; a surge in support for opposition parties, which could trigger panic measures in the government that could foment political instability; risk of extremist groups exploiting public discontent and political division, exacerbating existing security challenges; and severe economic repercussions, including capital flight.

Defusing tension

The path forward for the administration remains fiscal discipline, transparency, and delivery of cost-effective services to the people. As some have continued to canvass, broader systemic changes to address the root causes of the structural challenges of the Nigerian political economy, enthronement of the rule of law, and robust anti-corruption measures are necessary to steady the ship of state and get the economy back on the track of sustainable growth.

Closing the wide gulf in the welfare of the leaders and the people is necessary to improve the credibility of the country’s democracy and that of the administration. The coming months will tell whether the controversy caused by the acquisition of the presidential jet will serve as a catalyst of change.

Cheta Nwanze is Lead Partner at SBM Intelligence.