Maximise your leverage Buhari – Part 1

It is a little over a year ago when I suggested an agenda for President Buhari to address the needs of Nigeria, highlighting the Boko Haram menace, corruption and the infrastructure.  The President has delivered and/or made significant attempts to do so.

There are still major challenges, notably, the problems in the Delta, electricity power generation, the economy and public perception.These challenges are largely exogenous factors and/or new developments, that is, they have been caused by forces outside his control and/or have come about since he came to power.

There are severe limitations on how he can manage the major external factor, the world oil price but his stated objectives and budget seek to ameliorate the effects of low and volatile world oil prices and he is doing his best to grapple with new issues. The president needs to make maximum use of his leverage and convince the electorate that the country is moving in the right direction.

The president has made impressive gains against the Boko Haram problem in a very short time, degrading them significantly and limiting the geographical spread of their operations.In a recent report by Global Terrorism Index, it was reported that 60006 people died in 270 attacks in 2015.  In the first three months of 2016 the number of deaths was 422 in 36 attacks.  If we extrapolate the 2016 figure total deaths from terrorism in 2016, it should be less than a third of those in the previous year and this simple arithmetic underestimates the progress being made since deaths from terrorism have been declining dramatically since March 2016.  In fact, going by this rapidly declining trend we would expect deaths from terrorism in 2016 to be a tiny fraction of what they were in 2015.

Buhari has done in one year what Jonathan could not do all the years he was in power. Buhari achieved this feat in his typical efficient and effective fashion, getting rid of the ineffectual and corrupt army chiefs, shifting army command to the epicentre of the crisis, working with neighbouring countries to set up the Multinational Joint Military Task Force and eroding civilian support for the group, largely, by demonstrating his resolute decision making prowess. This success has been welcomed by Nigerians and acknowledged by foreign observers with the Fund for Peace, publishers of the Fragile State Index, recording significant gains in the country’s Security Apparatus Index and substantial reduction in the level of growth of negative indicators in the Fund’s five-year and 10-year trends.

Buhari’s effort at addressing corruption has been partly through measures adopted but also through his reputation.  In the case of the latter, there are many reports of officials making restitutions of funds even before receiving official summons.  He replaced the heads of revenue generating agencies, including the head of the Nigerian National Petroleum Corporation (NNPC). He has directed relevant agencies to vigorously pursue corrupt officials to get them to pay back what they looted and be prosecuted for such offences. He has badgered foreign governments to repatriate stolen funds with some success. In his first budget, one of which’s stated objective was to minimise inefficiencies, he created the Efficiency Unit.  The unit will monitor personnel and pensions, conduct continuous audits and extend the integrated payroll information system. The Treasury Single Account (TSA) system aims to increase transparency and improve remittance of collection of revenues.  This TSA system has seen a very significant reduction in the number of accounts maintained by government departments which officials used to defraud the state.

Buhari’s effort at addressing the country’s infrastructure deficiencies was to more than double the expenditure on capital spending from 15% to more than 30% in his first budget.  He has been engaged in discussions with foreign governments, notably China to secure funds for infrastructure projects.

While his efforts at addressing issues noted above are laudable, the country has serious challenges, largely relating to the situation he was faced with when he came to power but also because of new issues that have developed.  With regards to measures noted above, Boko Haram while severely degraded has not been totally eliminated.  The fight against corruption is still very much work in progress and the country still ranks quite high in the corruption and fragile state indexes that is, it is still categorised as very corrupt and fragile.  While the president has indicated that he is keen to rehabilitate and expand the country’s infrastructure, it is yet not clear whether he will get the relevant funding.  He also has yet to come up with a detailed blueprint and action plan for the sector.

With regards to other challenges the economy is the most pressing and which Buhari has yet to make a significant positive impact but this is largely due to developments outside his control, primarily the collapse of the price of oil. The world oil price has dropped dramatically, from US$112 per barrel in mid-2014 when Buhari was campaigning to be president, to less than a quarter of that level at its lowest point in 2016.  The collapse in that price has been compounded by major disruptions in oil production because of the activities of Delta region activists who are protesting that they are not getting a fair share of oil revenues derived from their region.  The country’s power generation dropped to a very low level of 2000 megawatts, at its lowest level, less than half that under the previous regime.

Consequently, the economic growth rate, according to World Bank estimates, dropped from 6.3% in 2014 to 2.7% in 2015.  The National Bureau of Statistics reported that the economy contracted by .36% in the first quarter of 2016. These economic difficulties have been noted by powerful financial institutions who have taken actions that could compound the country’s problems.  J.P. Morgan Chase and Barclays have excluded Nigeria from emerging market bond indexes. Other financial institutions could follow making it difficult for the country to secure funds in international markets and make its borrowing costs prohibitively high.

To be continued
J Boima Rogers is the Principal Consultant at Media and Event Management Oxford MEMO. www.oxfordmemo.co.uk