Buhari’s victory is dangerous for Nigeria’s economy – Analysts
Nigeria’s President Muhammadu Buhari has been declared winner of the 2019 presidential poll by INEC, the country’s electoral commission defeating his closest rival Atiku Abubakar with about four million votes. While the incumbent is currently being congratulated on his re-election by fellow leaders across the world, Bloomberg says his victory is bad for the Nigerian economy.
“If President Muhammadu Buhari wins another four-year term it will probably mean more political interference in Nigeria’s economy and slower growth,” research by Bloomberg Economics shows.
This sentiment was echoed by ratings agency Moody’s in a note shared with TheNerve Africa.
“Nigeria’s credit challenges remain and include a low growth environment, very high exposure to fluctuations in oil prices of government revenues and export earnings, weak institutions, and high levels of corruption,” said Aurelien Mali, Vice President at Moody’s.
Since 2015 when Buhari was first elected president, the country has been in dire economic strait, going into recession and slightly recovering at a time regional neighbours were posting impressive growth. Although a fall in oil prices took its toll on the nation, policy uncertainty under Buhari and his blatant disregard for the rule of law scared investors away. Worse, any time he is called into question over actions that are detrimental to the economy, he gets defensive. Last year, foreign direct investment into Nigeria, Africa’s largest economy dropped 36 percent to $2.2 billion. This decline saw Ghana overtake Nigeria as the country with the highest FDI in West Africa, recording an inflow of $3.3 billion. Nigeria also became the country with the highest number of poor people in the world, overtaking China. Unemployment also rose to 23.1 percent in the third quarter of 2018.
President Buhari’s fight against corruption has also been less than impressive, with his party members facing allegations of corruption seem to be getting a free pass. It took more than two years of outcry and the nearness of the presidential poll for the country’s Economic and Financial Crimes Commission to arrest former Secretary to the Nigerian government Babachir Lawal who was sacked over corruption allegations. The governor of Nigeria’s Kano State had a key role to play in ensuring the state with one of the highest number of voters in the country support the president’s re-election bid, so when he was caught on video receiving wads of dollars, President Buhari, who was once known to abhor corruption was convinced the video must have been doctored. Governor Umar Ganduje repayed Buhari’s decision to look away with more than a million votes.
There are other members of President Buhari’s ruling All Progressives Congress who are under investigation or even undergoing trial for corruption, but were candidates in the just concluded National Assembly elections. Like the chairman of the ruling party said, once politicians join the party, their sins are forgiven. But not for long; Buhari’s re-election did not come easy. He garnered 15,191,847 votes against Atiku’s 11,262,978. He won 19 states against Atiku’s 17, plus the capital Abuja. This is despite the corruption-ridden label that seem to have stuck on the latter and his party, the PDP.
Thus, the president is expected to review his first term in office and strive to correct his mistakes and put the country back on a path of economic prosperity. Despite failing to fulfill his campaign promises, he was re-elected. That should count for something.
“The new Administration will intensify its efforts in Security, Restructuring the Economy and Fighting Corruption,” President Buhari said in his victory speech, although he believes a foundation has been laid to achieve improved security, fight corruption and grow the economy. But he seems to concede that nepotism reigned during his first term and so, he would correct this.
“We will strive to strengthen our unity and inclusiveness so that no section or group will feel left behind or left out,” he promised.
Regardless of what they think a Buhari second term means for the country, analysts see a better year for Nigeria in 2019. According to Bloomberg Economics, the opening of the Egina offshore oilfield operated by Total, this month and the Dangote refinery expected next year will deliver a near-term boost. The United Nations Conference on Trade and Development (UNCTAD) had also stated this in its Global Investment Trends Monitor released in January.
But analysts doubt his government would be able to build on gains from such projects. Bloomberg Economics expects Nigeria to keep losing ground in real GDP per capita against its peers in Sub-Saharan Africa.
One way to start well is ensuring it does not take him another six months from May 29, to set up his cabinet. The Economic Recovery and Growth Plan (ERGP) is an important plan his government should see through; he needs to ensure capable hands are appointed to his cabinet to ensure the country benefits from the plan.
SOURCE: The Nerve Africa