Nigerian president Muhammadu Buhari’s All Progressives Congress (APC) won historic elections in March and April this year with a simple message of change. Nigeria was in a tight spot – oil prices had crashed, the electoral cycle had brought much business to a standstill, corruption remained a constant, and, despite recent successes against the militants, Boko Haram remained a serious security threat. The electorate overwhelmingly decided that the APC’s new broom (the party’s logo) was needed.
What form this change would take and how deep the clean would be was unclear. Buhari’s campaign was slick, with consistent messaging. His head of policy, the cerebral former governor of Ekiti State, Kayode Fayemi, produced an ambitious manifesto, presenting the APC as a programmatic social democratic party. In election rallies and private briefings, APC bigwigs discussed the growth of a welfare state, development of the power sector, substantial reforms of the oil and gas sector, and plugging the leakages – or structural theft and corruption – that holds Nigeria back.
Policies, Mr President?
In the campaign, the APC suggested that Buhari’s administration would be policy focused, with the president setting the direction but with influential ministers charged with accomplishing key objectives. Buhari would be a chairperson, rather than CEO president, several well-placed analysts suggested.
Four months into his administration, how wrong these projections seem. By the time of going to press, the president has still not appointed a cabinet of ministers.
Despite claims by the presidency and his supporters, not having any ministers for the first four months of an administration is not normal. It isn’t what partners hoped and expected. Buhari has at his disposal some highly qualified politicians and technocrats that could have made up – and could yet make up – his core team. In the critical areas of fiscal policy, infrastructure development, welfare and service provisioning, and the exchange rate, much less than expected has begun.
When Buhari was elected, the naira had been on the slide since the price of oil started to drop dramatically in October 2014. The currency weakened from 165 to 199 to the dollar on the official exchange. When Buhari ruled Nigeria in the 1980s, he railed against IMF demands to devalue the currency and has consistently argued that devaluation in Nigeria would be bad for the economy. Nigeria’s main export, oil, is priced in dollars, so a cheaper naira wouldn’t make Nigeria’s oil more competitive. Nigeria imports many of the finished products it needs, most of its fuel, and many of the inputs necessary for the oil and the small but growing manufacturing sectors. A weaker naira makes these more expensive.
On the eve of the election, Fayemi confirmed to African Business that shoring up the naira would be a priority. Buhari’s victory did coincide with a small decrease in the informal market cost of dollars and a strengthening of the naira on synthetic futures markets.
Fayemi told African Business that it would be active government policy that would manage the naira and that the Central Bank of Nigeria (CBN) would play a reduced role. Under Jonathan, CBN governor Lamido Sanusi expanded the remit of the bank. Fayemi said that Sanusi’s successor, Godwin Emefiele, would have his wings clipped.
Quite the reverse has happened. The minister-less Buhari administration has done little and Emefiele has taken an even more activist role than Sanusi, blocking access to foreign exchange for the import of an increasingly broad array of products.
This CBN-led strategy is keeping a lid on things for now; the official rate is 197 to the dollar. But, signs of pressure abound. The informal market rate is over 220. Speculators playing the 12 month non-deliverable forwards market – a way for speculators to bet on the price of the naira without buying or selling any real ones – believe that by September 2016, the naira will be over 260 against the dollar. This price is up from 231 in the early April days after Buhari’s victory was announced, but down from a high of 285, just after elections was postponed in early February.
Cleaning out the stables?
This lack of press-releasable action from the administration has earned Buhari the nickname “Baba Go Slow”. Apparently, those who expected policy rollouts and action on slowing economic growth are disappointed.
However, there is some evidence that Buhari is rebuilding the deeply flawed systems and structures that govern Nigeria before attempting to implement the manifesto he ran on. Buhari sacked the entire board of the theft-ridden and opaque Nigerian National Petroleum Corporation (NNPC). He started an investigation into export and complex swaps
contracts that developed over previous administrations. In August, he appointed Emmanuel Ibe Kachikwu, a senior ExxonMobil oil man, to run NNPC. The new boss immediately signalled that the NNPC’s internal culture would be revolutionised and made much more transparent. It continues to be rumoured that Buhari will not hand over the oil ministry to a minister but will keep some control of it for himself. The previous oil minister, Diezani Alison-Madueke was seen to build up too much power in her five years in charge of the sector that produces over 70% of
Nigeria’s government revenue.
Buhari has effected a similar clear-out of military top brass, reshuffling the entire top team. The president has taken a methodical approach to security reform, even in the face of an estimated 800 deaths at the hands of Boko Haram in the first 100 days of his presidency. He has realised that to defeat Boko Haram requires deeper regional coordination with the other three countries affected by the Islamist insurgency: Cameroon, Chad, Niger. He has visited each country since his inauguration and hosted the presidents of Chad, Niger and Benin, along with the Cameroonian defence minister in Abuja to finish putting together the Multinational Joint Task Force made up of the five countries’ forces that will fight Boko Haram.
It appears that Buhari’s approach to tackling corruption is much more root and branch than he suggested it would be on the campaign trail. Not only does the president seem more than happy to allow investigations into corrupt practices that took place before he entered office, but he has consistently placed anti-corruption over the smooth running of government or the economy.
In September, Emefiele sought to calm banks’ fears about liquidity shortages, as the interbank lending rate jumped 200% after Buhari ordered the consolidation of all ministry accounts into a single account at the CBN. Buhari instituted the policy to create greater oversight over ministry funds and prevent departments from running multiple bank accounts, making corruption easier to hide. This policy hit banks’ liquidity ratios.
Likewise, his non-appointment of ministers, while candidates’ corruption track records are thoroughly investigated, has hurt confidence and slowed government action. But, it has clipped the wings of ministers. In an interview with French television during September’s state visit, Buhari was dismissive about ministers and politicians, in general, saying that they make “noise” but don’t do the work. This disdain for politicians will be recognisable to those who lived through or have studied Buhari’s first period in power as a military ruler.
There is, of course, another reason Buhari could want to delay appointments and limit ministerial purviews – politics. Nigeria suffers from a politics of zoning, where competing forces try to get “their” candidate into a position. Not only does this breed politics that contends not on ideas but along factional, regional and ethno-linguistic lines, it also creates incentives for corruption. Payback is strongly implied. Not only must Buhari deal with these pressures, but he must also balance the competing factions within his party. The APC is a coalition of very different parties, which came together to defeat Jonathan and his People’s Democratic Party (PDP). As such, it contains many powerful factions and wannabe king – or at least prince – makers. By delaying and downplaying appointments, Buhari has consolidated his power in the party, at least for now.
Ngozi Okonjo-Iweala, finance minister from 2003–2006 and again 2011–2015, wrote a book about Nigeria called Reforming the Unreformable. It was meant to be about her and others’ successes in her first shot at the job and transforming Nigeria’s economy and governance. Clearly, not all of the success was permanent. Buhari has spent his first four minister-less months in office attempting a much deeper clean.
Because much of this process remains partly obscured from the public, it is hard to assess how successful his operation has been. To the optimistic, the first four months of Buharism 2.0 have removed some of the structures that enable looting. To the sceptical, he’s avoided internal political difficulties but at the cost of policy stagnation.
Either way, Buhari has clearly made some changes to the system. Has he been able to do enough and fast enough and will governance revert to type when ministers take up their positions? Perhaps the second, not first, hundred days of this presidency will be the most telling.
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