Growing concern highlights depth of crisis in Africa’s top oil producer
Fund managers first expressed their concerns over President Muhammadu Buhari’s handling of Nigeria’s economic crisis by taking billions of dollars of funds from its markets. Then, multinationals and local industry captains began voicing unease with his government’s policies.
Now Mr Buhari’s senior officials and allies are joining the chorus of criticism, complaining of “paralysis” and a lack of urgency under his leadership in tackling the economic malaise. Even his wife, Aisha, has spoken up, saying that if things carry on as they are, she will not campaign for his re-election in 2019.
“The whimper is becoming a din — externally and [within government],” said one government minister. “Naturally we should be quiet, because it’s our government and we want our president to succeed. But a sense of lack of urgency is getting in the way.”
The growing murmurs of discontent highlight the depth of the crisis in Nigeria, which is enduring its first recession since 1991, amid complaints that Mr Buhari is exacerbating the situation rather than leading a revival. The former military ruler’s election last year spawned huge expectations in Africa’s top oil producer. It was the first time an opposition candidate had unseated an incumbent at the ballot box and Mr Buhari, 73, pledged to crack down on rampant corruption and overhaul an inefficient state system.
But a senior presidential aide said optimism had given way to “paralysis”. “Where is the energy? Everyone is waiting for bold decisions,” said the aide.
In a speech this month, Mr Buhari acknowledged “how difficult things are” for Nigerians. He insisted he remained “resolutely committed” to good government, and to stopping “the stealing of Nigeria’s resources”.
But the first lady told the BBC that her husband “does not know 45 out of 50 of the people he appointed”.
“I don’t know them either, despite being his wife of 27 years,” Mrs Buhari said. “If things continue like this up to 2019, I will not go out and campaign again.”
The president sought to laugh off his wife’s comments.
“I don’t know which party my wife belongs to, but she belongs to my kitchen and my living room and the other room,” Mr Buhari said.
The fall in oil prices triggered the economic crisis in a nation that depends on petrodollars for 70 per cent of state revenues and 90 per cent of export earnings, and the slump in commodity prices has hit economies across Africa.
But in Nigeria, there are complaints that Mr Buhari has undermined his economic management team and created policy inconsistencies and sent conflicting signals to markets and the public. As a result, the few major decisions that have been taken, such as the removal of fuel subsidies and relaxing the currency’s peg, have come months too late, officials say.
Capital inflows dropped by 75 per cent in the second quarter, reflecting the negative sentiment of investors who say they cannot bring hard currency to the country because the foreign exchange market is not transparent.
When the central bank did ease the currency’s peg to the dollar in June, causing the naira to fall by 30 per cent, Mr Buhari said he was not convinced a devaluation would help the economy.
This was viewed by investors and bankers as a sign of interference in monetary policy, and added to perceptions that members of the president’s inner circle are giving instructions to the central bank governor Godwin Emefiele to prop up the naira at all costs.
“The governor is independent, so we are told,” said the minister. “The extent to which he is — and where he is taking his instructions from — remains to be seen.”
He said investor confidence would not be restored unless Mr Emefiele was replaced. “We need a shock therapy. The market needs to see some heads roll,” the minister said.
Other top officials, including Kemi Adeosun, finance minister, have complained that the central bank’s refusal to bring down the main interest rate from 14 per cent is choking the economy.
Audu Ogbeh, agriculture minister, said that high borrowing rates had made it impossible for farmers and agribusinesses to scale up production of rice, sugar, milk and other goods imported in huge quantities.
“We’re in trouble because we can’t produce and we can’t import,” he said. “The timing of policy and implementation has to be better organised.”
The presidential aide did cite military gains made against Boko Haram, the Islamist militant group, as a positive. But he acknowledged that Mr Buhari’s promise of “quick win” reforms, such as an overhaul of the notoriously corrupt state-owned oil company, have yet to happen.
“The key question is whether the president realises this and does the right thing by empowering the economic management team,” said the aide. If not, he said, “we will limp along from crisis to crisis”.