Lagos (AFP) - It's
not Nigerian President Muhammadu Buhari's fault that Nigeria's economy is
inextricably tied to the global price of oil, now half of its 2014 peak of over
$100 per barrel.
But the president's
response to the economic crisis has a growing number of people concerned that
he doesn't have what it takes to rescue Nigeria from recession.
Warning signs
appeared early. Buhari took six months after being elected to name a finance
minister, then vowed not to "kill the naira" by devaluing it, against
expert advice and with nefarious consequences.
His seemingly
lackadaisical attitude to the crashing economy spooked investors who worried
that he was ignoring the crisis.
Now critics are
coming from all sides. In October, Buhari's wife Aisha told the BBC that she
may not back him in the next election, suggesting that his government had been
hijacked and he had lost control.
Buhari's response,
that his wife "belongs to my kitchen", made Nigerians cringe. But
what he said next was, politically, more revealing.
"It is not easy
to satisfy the whole Nigerian opposition parties to participate in the
government," Buhari said.
He can say that
again. Over the past month, the president has repeatedly been stonewalled by
lawmakers who want the executive to be more transparent about his economic
policies and plans.
Early this month,
Nigeria's Senate rejected Buhari's attempt to take on almost $30 billion in
external borrowing to fund his record budget "due to lack of
documents" supporting his request.
The Senate also
"expressed surprise" at the Nigerian Law Reform Commission, who said
it was considering jailing or fining people for holding dollars in an
unconventional strategy designed to address a foreign currency shortage in the
country.
"The measure is
disruptive and counter productive, threatening to undermine many of the reform
efforts... intended to boost investor confidence," the Senate said in a
press statement Monday.
- 'Policy paralysis'
-
"The president
is having difficulty making any kind of legislative headway," John
Ashbourne, economist at Capital Economics, told AFP.
"It adds to the
sense that there's policy paralysis and when the economy is facing a difficult
time we need some action. We can't get that if Buhari isn't able to
negotiate."
Nigeria's economy
contracted in the third quarter by 2.2 percent, with rebels in the
oil-producing southern swamplands continuing to attack pipelines and businesses
struggling to access foreign exchange.
"I think the
recession is really starting to hurt," Razia Khan, Africa economist at
Standard Chartered Bank, said.
"With the
current shortage of foreign exchange clearly having a detrimental effect on
growth, there is little evidence of any meaningful policy initiative that might
be able to resolve this," Khan said.
"There is a
concern that there isn't enough momentum, not enough is being done."
Ideally, Buhari's
expansionary budget would have boosted growth. But the fiscal stimulus isn't
materialising.
In October, the
budget ministry said it was facing unanticipated revenue shortfalls and that it
had spent only a little more than half of what was allocated for 2016.
Revenue shortfalls
will persist as long as militants continue sabotaging the oil and gas
infrastructure.
Today Nigeria's oil
production is 1.6 million barrels per day, down 22 percent from the same period
in 2015, with no signs the sabotage will stop.
- 'Military ruler' -
Talks with the
militants in the south have been unsuccessful so far.
"President
Buhari and his government have so far failed to hold constructive talks with
militants," Rhidoy Rashid, oil analyst at Energy Aspects, said in a recent
note.
"The Nigerian
military has also continued its operations in the Delta, inflaming tensions
while failing to disrupt the militants."
Investors are
rattled and want to see a more concrete plan from Buhari's government, said
Manji Cheto, risk analyst at Teneo Intelligence.
"I believe he
continues to act as if he's a military ruler, there is a perception that has
undermined the ability of policy makers within his government to take
decisions," Cheto said.
"I genuinely
think that he's pretty much run out of his goodwill."
Some polls are
already reflecting that sentiment. Last year around this time, Buhari enjoyed
an 80 percent approval rating, reported analysis firm BMI Research.
Compare that to this
September, when his approval rating hit just 41 percent, with voters bearing
the brunt of 18 percent inflation, slow business and sputtering electricity,
the result of lower oil and gas output.
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