Earlyface

President Muhammadu Buhari took office a
month ago on a wave of hope that he would
quickly deal with a deepening economic crisis
and an Islamist insurgency in the North. So far,
he hasn’t met those expectations. While Africa’s
biggest oil producer has been hit by a 40 per
cent fall in petroleum prices in the past year
that has slowed economic growth and
weakened the currency, Buhari, 72, has delayed
naming a cabinet until September. As the
momentum of being the first opposition
candidate to win power through the ballot box
fades, critics are mocking him as a sluggish
elderly man, or “Baba Go Slow.”
Buhari has acknowledged the crisis, saying last
month that his government is facing severe
financial strain, with a treasury that’s “virtually
empty,” and his party is calling for patience. Yet
his lack of urgency in tackling economic woes
could leave Nigeria badly adrift, said John
Ashbourne, an economist at Capital Economics
in London.
“Every week that Nigeria goes without a cabinet,
increases the chance that it will face a
dangerous shock -- whether a revenue collapse
or a currency crisis. “Leaving the federation
without a finance minister would be a
questionable choice at the best of times; doing
so during a period of economic instability is
difficult to explain,” Ashbourne, said by phone.
Nigeria’s currency, twice devalued in the past
year in an attempt to cope with lower oil
income, has weakened 7.7 per cent against the
dollar this year on the interbank market. The
International Monetary Fund (IMF) estimates that
growth will slow to 4.8 per cent this year from
6.1 per cent in 2014. The naira was trading at
198.85 against the US dollar at 2.38p.m. in
Lagos.
The Nigerian Stock Exchange (NSE) Index hit its
2015 peak of 35,728.12 on April 2, the day after
Buhari was declared the election winner. Since
then it has fallen eight per cent.
The cabinet delay won’t please investors, said
Alan Cameron, an economist at Exotix Partners
LLP. They’re expecting tighter fiscal policy, a
currency devaluation and a greater focus on tax
collection after the drop in oil prices, he said.
“There was initially some hope that Buhari
would be able to tackle these changes more
quickly and with more credibility, but the time
line has now been pushed back,” Cameron said
by phone from London.
“It’s going to be a difficult pill to swallow for
foreign investors,” he added.
The Central Bank of Nigeria (CBN) has banned
importers from using the foreign-exchange
market to buy certain goods as it seeks to
stabilise the naira and hold on to external
reserves, which are down 16 per cent this year
to $29 billion.
“Even what little could have been achieved so
far, such as the nomination of ministers, has
not been addressed, and there is a sense of
inertia,” Folarin Gbadebo-Smith, Managing
Director of the Centre for Public Policy
Alternatives, a Lagos-based research group,
said by phone on Wednesday.
Buhari’s own party, the All Progressives
Congress (APC), has recognised the growing
public disenchantment and pleaded for patience.
“Nigerians are right to demand even a faster
pace. Nigerians are right to ask that a
government be quickly put in place,” party
spokesman Lai Mohammed, told journalist at a
June 30 press conference in Lagos, the
commercial capital. “All we ask for is a little
more patience, a little more understanding,” he
added
Buhari is facing a unique situation because his
victory over the incumbent, Goodluck Jonathan,
ended 16 years of rule by the Peoples
Democratic Party (PDP), his spokesman, Femi
Adesina, said.
“This is not a normal changeover, it is from one
government to another,” he added.
Buhari, who previously governed Nigeria as
military ruler in the 1980s, has moved more
quickly in the fight against the Islamist militant
group, Boko Haram, which has waged a violent
six-year campaign in the North-east region.
He ordered the army to move its headquarters
from Abuja, the capital, to the North-eastern city
of Maiduguri, the scene of some of the worst
fighting, and has traveled to neighbouring
countries such as Chad and Niger to discuss
cross-border military cooperation.
It’s the “one area in which the Buhari
administration has hit the ground running,”
Mohammed said.
Yet, while troops from Nigeria and Chad have
largely dislodged Boko Haram members from
its self-declared caliphate in the northeast this
year, the insurgents have stepped up hit-and-
run attacks.
Buhari will also have to deal with shortcomings
in his own army, which Amnesty International
said last month should be investigated for war
crimes, including unlawful killings. In a step
toward meeting his campaign promise to attack
corruption that has crippled Nigeria for decades,
Buhari disbanded the board of the state-run
Nigerian National Petroleum Corporatiion (NNPC)
The National Economic Council on Monday set
up a four-member panel to probe its accounts.
Even some opposition lawmakers say Buhari
needs more time.
“His approach may be different, but I am
patient, I will give him some time,” Ben Murray-
Bruce, a PDP senator, said in a June 29
interview in Abuja. Where Buhari has come up
short is communicating a sense of engagement
to the public, said Gbadebo-Smith. “He doesn’t
say anything about anything. The public would
be satisfied with signals that say we are doing
something about this, we are on top of this,” he
said.