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.
•Culled from Bloomberg