May 2017 will officially mark two years since President Muhammadu Buhari’s government came into office. At this juncture, many observers—not all—would likely agree with the assessment that the ruling All Progressive Congress (APC) government has, so far, failed to live up to its hype.
In some respects, the underwhelming performance of the APC government was always inevitable. From the onset, there had appeared to be a considerable gulf between what the public expected of the government and what it could realistically achieve. Especially when the myriads of challenges the country was facing is considered. In light of depleted fiscal buffers stemming from the fall in oil prices to the heightened terrorism risks triggered by Boko Haram, not to mention unbridled corruption, which only exacerbated these challenges, it is clear that, in 2015, the current government was being held up to standards that it was, realistically, never going to be able to fulfil. Although some would argue that the government, too, has itself to blame for the growing nationwide disappointment: while campaigning, its foremost candidates continued to restate commitment to promises they were highly unlikely to be able to deliver. But such are the realities of politics. Politicians will promise now, and figure it out later.
Political realities notwithstanding, even for those who had a more measured view of what was feasible in the short to medium-term following the historic 2015 elections, it would, still, also be fair to say that the administration has performed worse than could have been imagined. None of the problems confronting Nigeria in 2015 or in the years leading up to this were unprecedented—not even the fall in oil prices, which had become evident by mid-2014, more than six months before the elections in March. On this basis alone, the reasonable expectation for any Nigerian government-in-waiting is that it would at least have had a contingency plan against the risk of an oil crisis—even if this meant a plan that would be subject to revisions at a later stage (i.e. after the election when the government would have had a better grasp of the full impact of fall in oil prices on state revenues).
However, the facts speak for themselves: it took Buhari 8 months to appoint his cabinet, and an additional 14 months for his government to finally unveil its medium-term economic strategy, the Economic Recovery and Growth Plan (ERGP). Not to mention the lack of improvement in the now-customary practice of delayed budget presentations (and, therefore, approvals). By all means, the Buhari administration can, so far, only be described as taking a bad situation and making it worse. For this reason, continued attempts to paint the government as a victim of a set of unfortunate circumstances are, at most, disingenuous.
Even if one chooses to judge the administration against the yardstick it had set for itself, by comparing its performance to date to its key electoral promises, it is hard to get away from the fact that the administration is performing below expectations. In its election manifesto, the APC had made a number of promises, all of which could be classified under three key themes: improving Nigeria’s security environment; tackling corruption; and economic reform (which includes tackling unemployment). If one were to take a stern view, then the conclusion would be that the government has failed on all three fronts, but such a view would be too simplistic. The record appears more mixed, albeit more skewed towards underperformance.
Security
Nigeria’s most pressing security challenge when Buhari came into office was Boko Haram, a threat that, although not entirely contained, has considerably diminished. It remains true, however, that there are analysts and observers who hold doubts regarding the extent to which the current administration can be credited with this improvement. While those who continue to engage the debate on the impact of the Buhari administration on the war against Boko Haram are likely to maintain entrenched views on the subject, what seems less contentious is the fact that Buhari’s government has not directly worsened the situation. Even if the government appears to be doing too little to deal with the fallout i.e. the risk of famine in the North East resulting from Boko Haram’s near nine-year terror campaign in the region and its devastating impacts on farming and trading activities.
However, even as the government was just getting a handle on the Boko Haram threat, long-held grievances in the oil-producing Niger Delta once again resurfaced in the form of resurgent militancy. The causes of this renewed threat will likely remain a subject of debate. Some may attribute the return of violence to ‘political sabotage’ driven by opponents of the president seeking to capitalize on his low approval rating in the region. Others are likely to see the Niger Delta conflicts as a consequence of the administration’s failure to pre-emptively address regional grievances, thereby giving legitimacy to armed groups claiming to be defending the rights of the Niger Delta. There may be some truth to both claims, but in any case, the jury remains out on the government’s track record in dealing with the current iteration of militancy in the oil-rich area. Attacks by militant groups may have virtually halted since November 2016, but in the absence of a confirmed permanent cessation to hostilities by militant groups, further attacks will remain a looming threat.
Corruption
The president’s much-lauded war on graft is one area in which his hard-core supporters continue to defend him. In many respects, the defence is entirely understandable: at no point since its establishment in 2003 has the Economic and Financial Crimes Commission (EFCC) been seen to be so active in pursuing alleged perpetrators of graft as it is at present. Indeed, the commission had some active years at its early stages, but had since appeared to wane in subsequent years until Buhari came into office in 2015 and gave it a renewed lease on life.
This ‘reactivation’ of the EFCC seems to have got a lot of Nigerians and foreigners alike excited once again that Nigeria may finally be dealing with its decades-long reputational challenge: corruption. It is hard to read a Nigerian media outlet any week these days without spotting some reference to EFCC’s work. High-profile arrests have been made, discoveries of allegedly embezzled funds have been announced, and a lot of this seems ongoing.
However, significant as these activities may be, the Nigerian government will likely continue to struggle to convince Nigerians and the world that the Buhari administration is serious about tackling corruption until the government—and not a foreign counterpart—is able to convict corrupt public officials and dole out commiserate jail terms for such individuals. Herein lies the problem for the EFCC: two years into Buhari’s tenure, the anti-graft agency has yet to secure a single conviction in the courts. This, of course, is not entirely the fault of the agency (convictions are within the purview of the judiciary), but as the plaintiff, the burden of proof is still the anti-graft agency’s to bear. This is not by any accounts an easy task, although one wonders if there could have been a more strategic approach the EFCC could have taken, for example, by not stretching itself thin but choosing some key cases to focus on and ensure that all the evidence it needs can be presented in court.
Nonetheless, that public patience on this issue is starting to run thin is obvious and, indeed, there appears to be greater preoccupation with the state of the economy—an area where the government’s track record to date appears to be far from satisfactory.
Economy
If one year into Buhari’s presidency, many Nigerians were still willing to defend his perceived hesitance to prevent an economic downward spiral, it is safe to say that almost two years on, there are fewer people in this camp. Nigerians have watched as the country’s declining macroeconomic fundamentals have translated into daily hardships on their lives, mainly in the form of inflation (which has seen historic price increases across the board) and a depreciated currency (which has affected people’s purchasing power).
There has been, and still is, much debate on what the right path for the government to take at this point is, with each faction of the debate keen to point out how its policy recommendation is the appropriate course. However, rarely does either side of the debate acknowledge this one key fact: that no path is likely to result in an immediate improvement in the lives of Nigerians (at least not at the pace that these recommendations often suggest, whether tacitly or explicitly).
So, if many experts seem divided on the right course of action, how should the government respond to the economic crisis? I doubt this is a question any Nigerian voter is willing to entertain, although any substantive debate about the effectiveness of government policies would seem moot considering that for the majority of its two years in office, the administration appeared to have done not much at all. By this, I mean that the government basically relinquished its duties, pushing the responsibility for policy heavy-lifting to the Central Bank of Nigeria (CBN), which, in turn, took a number of measures (see here and here) that, arguably, became a significant part of the problem. In other words, not only did the monetary policy authority implement policies that were seen to go against market expectations, the Bank—and this is a bigger issue—had become the focal point of government policy, thereby extending its remit far beyond what is expected of a monetary policy authority.
A Positive Policy Pivot?
As useful as retrospection can be, it serves no good to continue dwelling on what could have been done differently. Moreover, with the state of the economy now laid bare by the confirmation, in February, that the country experienced its first full-year growth contraction in 25 years (GDP in 2016 stood at -1.15%), it is worth asking if there is anything positive that can be expected in the years ahead. I would argue, yes.
Despite the delay, the recent publication of the Economic Recovery and Growth Plan (ERGP), at least, provides a glimmer of hope that government is making a positive policy pivot in terms of providing greater clarity on the direction of economic planning. The document, while ambiguous in terms of expected completion timeframes and how to quantify success, is, at least, the strongest indication to date of the administration’s medium-term economic plans. This is in contrast to the administration’s earlier focus on short-term plans. Gleaned mainly from its budget proposals, the first plan in 2016 was poorly implemented, and the other, in 2017, is yet to gain senate approval. The ERGP contains important reform goals, such as increased spending on infrastructure; privatization of state-owned assets; improvement of revenue collection; achievement of food security; and acceleration of the environmental clean-up of the Niger Delta. More so, the Plan provides clarity on fiscal and monetary policy; and, indicates the government’s interest in pursuing economic—in particular, fiscal—diversification policies.
However, it remains too soon to assess whether the new plan will result in a sharp reversal in policy trajectory. In fact, cautious optimism is needed especially as it has taken the administration 22 months to publish a policy plan, which—although hardly much to fault about it—is, mainly, a repackaged version of proposals previously espoused by past administrations. What this demonstrates is that Nigeria’s historical reform drag is often not a factor of poor planning, but of implementation—itself a reflection of political will, or lack thereof.
Under the current administration, two important developments will determine political will and, by extension, the likelihood that the policies outlined under the ERGP will be implemented. The first of these developments is the president’s backing and the second, constraints the electoral calendar places on policymakers.
The ‘Buhari factor’
That it took Buhari’s unexpected seven-week absence from Nigeria (ostensibly due to medical treatment in the UK for an undisclosed illness) for the ERGP to finally be released certainly warrants wondering if he was an impediment to the release of the document. This is a question one cannot answer with a degree of certainty but widely held perceptions that he has a propensity for micro-managing decisions would suggest that ministers and policymakers may have needed his consent every step of the way prior to including key proposals in the ERGP.
Ultimately, the official line remains that although the ERGP was finally released under Vice President Yemi Osinbajo—who, in the President’s absence, stepped into the role of Acting President—Buhari had, in fact, been consulted and, therefore, approves of the policy. If true, this is good and should, hopefully, provide some impetus for the implementation of reforms outlined in the document.
The Electoral Calendar
However, even if Buhari were to give strong backing to the implementation of the ERGP, the electoral calendar is also expected to limit what can be achieved. The proposals themselves—though not entirely new—are sensible and echo widely held consensus about vital reform policies that Nigeria has needed and still needs to undertake. However, that these policies pertain to issues that have been discussed by past governments, with mixed results in terms of execution, could be ominous on the ERGP. As mentioned earlier, not only is the plan ambiguous on timelines and parameters for defining success, but the government is now in a race against time.
Nigeria will enter campaign mode at the start (at the latest, middle) of 2018, in preparation for the next elections. The elections are expected to occur no later than by the end of the first quarter of 2019. Realistically, the timeframe does not provide much of a window for all the reforms outlined in the ERGP to be carried out. Therefore, it is worth defining what reforms could reasonably be achieved.
What to watch
Opinions are likely to differ on what is achievable under the ERGP given the electoral calendar constraint but one of the key initiatives to watch is the proposal to privatize selected public enterprises/assets, which includes the government’s stake in joint venture (JV) oil assets.
Privatization plans are not new to the Nigerian government—the Goodluck Jonathan administration sold public stakes in electricity utilities, the results of which were mixed. But this is the first time that any administration appears to be formalizing in a policy document, the mooted divestment of government interest in JV oil assets.
This is no easy feat, and there are many factors that stand as obstacles with some of the most relevant being continued concerns over security in the Niger Delta and the yet-to-be-approved Petroleum Industry and Governance Bill (PIGB). These issues, compounded with the overall declining fortunes of the global oil and gas industry could work against Nigeria’s favour. Yet, it still also holds true that there are existing operators in Nigeria’s oil and gas sector, and potentially new ones, with a healthy enough balance sheets and a risk appetite high enough to want to take up a stake in the industry. The question, therefore, is: does the Buhari administration see this and, if so, is the Buhari administration willing to do what it takes (within the confines of the law) to make this happen?