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Vol 57 No 1

Published 8th January 2016


Nigeria

Big tests beckon for Buhari

The country's new broom has to rebuild the economy and face down Boko Haram against the background of a depleted treasury

Fortunately for Muhammadu Buhari, who still harbours deep frustration with partisan politicking, his agenda in 2016 will be dominated by the issues on which he is most engaged – economic policy and security strategy. That won't, of course, make them any easier to resolve. The government faces, with an empty treasury and oil prices heading south towards US$30 or even $20 a barrel, the worst economic conditions in two decades.

Security will be as challenging as the economy. In addition to the continuing insurrection by Boko Haram's Islamist fighters in north-east Nigeria, there are rumblings of a resurgent rebellion by militants in the oil-producing Niger Delta. And a determined group of Igbo nationalists is raising the flag – Biafra's half a yellow sun – of secession again. The latest clash in Kaduna, in the north-west, between Ibrahim Zakzaky's Islamic Movement of Nigeria, which is backed by Iran, and the military could spin out of control. Shia Muslims are a small minority although Zakzaky claims two million fervent members for his movement (AC Vol 42 No 17, Shariacracy on trial).

Against such a backdrop it is some relief for Buhari's All Progressives Congress (APC) government that it is consolidating its hold over state governments and the National Assembly. Certainly, the APC has its discontents and rival factions but the opposition People's Democratic Party (PDP) has little to offer any would-be defectors as it tries to adjust to a life outside national government for the first time since its foundation in 1999.

It won't be easy. When the PDP holds its convention in March, its unity will come under huge pressure as rival groups vie to replace the remnants of Goodluck Jonathan's leadership team. The question for the PDP in the longer term is whether it will be able to claw back some of its support outside its heartland in the Niger Delta and the south-east.

That will become clearer this year with the delivery of a spate of judicial rulings on last year's state governorship elections in Abia, Akwa Ibom, Kogi, Rivers and Taraba (all appeals against PDP victories) and the results of two fresh elections in Ondo (currently PDP-controlled) and Edo State (APC). There is also a dispute in PDP-held Bayelsa, where state elections were halted in mid-course in December.

Although Buhari has little patience with politicians of all stripes, he is growing into his presidential role, speaking directly to the people on television and social media. So far, he has earned credibility with the anti-corruption campaign and on security. But he will have a tougher time on the economy. While many Nigerian nationalists instinctively support Buhari's refusal to devalue the naira, few are happy with the alternatives: swingeing controls on foreign exchange and an economic slowdown.

Although the President may still be smarting from the failure of his favoured candidates to win leadership elections in the House of Representatives and Senate, the legislature will be far busier than in the Jonathan era. Just how busy and effective will become clearer with the tabling of several complex new bills in the first quarter of the year. Among them will be the latest version of the Petroleum Industry Bill, which has been stuck in the Assembly for over five years (AC Vol 54 No 11, Blocking the great reform bill).

Buhari is also the oil minister, and he and his deputy, Ibe Kachikwu, are determined to complete the first stage of reforms to the state-owned Nigerian National Petroleum Corporation by the end of March. People who could upset the president's programme include Senate President Abubakar Bukola Saraki and his PDP-affiliated deputy Ike Ekweremadu (AC Vol 56 No 8, 'No condition is permanent'). However, Saraki still has to contend with misconduct and corruption allegations. Similarly, in the House of Representatives, the election in June of Yakubu Dogara as Speaker could present a problem for the president.

Another figure to watch in the APC constellation will be former Lagos State Governor Bola Tinubu, who is still the party's godfather in the south-west. Like many of the PDP party barons, such as Atiku Abubakar and Saraki, Tinubu failed to get his acolytes into ministerial jobs but he remains a force within the regional APC party. Although its victory last year is still reverberating, some APC cadres are already jockeying for position in the race for the party's presidential nomination in 2019.

After an ill-judged forecast that the government would have defeated Boko Haram by the end of the year, Buhari is faced with a new phase of the war. Although the Islamists no longer control vast swathes of territory, they are using bases in the Sambisa forest and in neighbouring Niger, Chad and Cameroon to launch attacks, mainly with suicide bombers, on targets such as schools and markets.

Alongside General Monguno, his well-regarded National Security Advisor, Buhari has to oversee a wide-ranging restructuring, retraining and expansion of the military, given the variety of security threats. The two men will also have to work hard to get the necessary security cooperation with their Francophone neighbours. Although Chad hosts the four-country Multinational Joint Task Force against regional terrorism, Nigerian officers complain of a lack of interest and cooperation from President Idris Déby Itno's military.

Facing a revival of political challenges from the Niger Delta over oil revenue and the south-east over political devolution, the government is being advised to tread cautiously. A growing sense of marginalisation is building up in those areas, and they remain strongholds of the opposition PDP. For that reason the government will find ways to rein in the former Niger Delta militants as it attempts to wind down the presidential amnesty programme, the responsibility now of special advisor Paul Boroh.

Amnesty payments are a blip compared to Nigeria's broader economic challenges. The projected N6 trillion (US$30 billion) 2016 budget, outlined during the December presentation of the 2016-18 Medium Term Expenditure Framework, is predicated on an oil price of $38 per barrel (compared with $77.5 in 2014) and is reliant on big new loans, with Qatar offering as much as $20 bn. in a multi-phase programme, according to financial sources. Meanwhile, officials have been told to slash revenue leakages and cut recurrent spending while boosting tax revenues as much as possible.

The fruits of higher capital spending outlined in the budget will not be immediately obvious in an economy whose growth is forecast by the IMF to amount to about 4% this year, well short of the level needed for the economic transformation Buhari has planned. It is also unclear how much the Central Bank of Nigeria's November interest rate cut – from a hefty 13% to a still double-digit 11% – will boost growth.

Nevertheless, the government's economic team is building a coherence lacking in many previous governments. It is led by Vice President Yemi Osinbajo, who benefits from the rare combination of an effective independent role and a good relationship with the president.

Finance Minister Kemi Adeosun and Planning Minister Udo Udoma will take their cues from Osinbajo on foreign exchange and debt policy. Three other ministers will prove extremely important this year on economic matters: Enyinnaya Okechukwu Enelema, at Trade and Investment; Babatunde Fashola, at Power, Housing and Works; and Kayode Fayemi, at Solid Minerals. Ending the leaking, cutting the grand corruption and working with the more nationally oriented companies could produce the beginnings of an economic turnaround by the end of the year, in spite of the grim oil market. Certainly, Buhari's honeymoon will be well and truly over by December. 



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