When incumbent Goodluck Jonathan conceded to his opponent Muhammadu Buhari after the March 2015 presidential elections, an unprecedented and unexpected outcome in Nigeria, national pride was seemingly restored in moments. The election outcome sent a message to other African states: incumbency is not omnipotent. And Africa’s biggest economy will remain its biggest democracy too, something some had doubted in the tense and polarized lead-up to election day. But the challenges ahead for the new president are as daunting as his inauguration is historic.
This would-be economic powerhouse and Africa’s biggest crude oil producer is running low on fuel. While Nigeria exported around 2.08 million barrels of oil a day in the first quarter of 2015, its three refineries operate at 20 per cent capacity at most. So Nigeria imports its petrol to run cars and diesel to power private generators for homes and businesses. National grid power generation is negligible relative to demand.
The traders that import refined products are paid by government in cash or crude oil via the byzantine Nigerian National Petroleum Corporation (NNPC). Most foreign suppliers had long stopped supplying on credit as they are owed $1.5 billion in arrears dating back to 2011. Local traders and wholesalers claim to be owed N200 billion in subsidies and are withholding supplies pending some form of settlement.
While some of the locally based wholesalers’ claims are legitimate, finance ministry officials argue that others have been dubiously inflated. But these wholesalers have the power to hold the government to ransom.
In the week preceding the inauguration, businesses closed early, vehicles stayed off the streets, flights were cancelled and mobile phone services were under threat. The country was grinding to a halt.
Urgent action is needed yet the reality is that President Buhari, swept to power on an anti-corruption platform as the opposition candidate for the broom-wielding All Progressives Congress (APC), will need to investigate exactly how much is owed and the conduct of the transactions if he is to make good not only of his promise on anti-corruption but also to promote efficiency in governance.
In a country that remains dependent on crude exports for fiscal revenue and product imports to function, the cabal-controlled opaque deals that keep the economy running are perhaps at the heart of the corruption that makes people’s lives unnecessarily harsh every day in Nigeria.
But given the parlous state of the economy after crude oil prices halved in six months in 2014, the depreciation of the national currency, the erosion of foreign reserves to under $30 billion, (perhaps four months of external payments), and the political and popular sensitivities around fuel importation and the fuel subsidy, the new government may not have chosen the fuel traders and how to reform the NNPC as the first challenge to tackle. But the traders have forced the issue.
A Full in-Tray
The Buhari government has challenges to deal with in their first 100 days that in many other countries would simply be overwhelming. In addition to the fuel shortage, there is an Islamist insurgency, a struggling economy, corruption-corroded institutions, dire development needs, complicated reforms to the power and petroleum sectors, and the question of how to gain the confidence of the 12.9 million Nigerians who did not vote for the president. The oil producing South South and South East states, where memories of Buhari’s former military regime are bitter and suspicions of the APC run deep, voted overwhelmingly for the People’s Democratic Party.
With ambitions including economic diversification, institutional reform and improving welfare to millions of Nigeria’s poorest, President Buhari and the APC will see their efforts stymied in 2015 by empty state coffers.
Yet it is not the availability of money but the management of it that may effect change in Nigeria. Years of high oil prices and strong GDP growth have not translated into the development, job creation and poverty reduction that they should have. Instead Nigeria is one of the fastest-growing markets for luxury aircraft and champagne, while it ranks 152 out of 187 countries in the Human Development Index.
Boko Haram is high on the president’s target list. Here too he is managing expectations, developed around the president’s long military career and experience in Borno State – the epicentre of the Boko Haram crisis. But of all the challenges it is against the violent Islamist insurgency that most tangible progress is likely to be seen in 2015. A restructuring of the senior officer corps, likely better cooperation with the region due to stronger leadership and greater morale in the armed forces, will help the new government build on gains already made.
A New Country
While Buhari may have a to-do list on anti-corruption, security, the economy and institution-building as long as he had as military ruler in the 1980s, after 16 years of democracy Nigeria is a different country and he hence must lead it differently.
Nigeria’s economic diversification is well under way; this activity is simply not formal or fully supported by government bureaucracy or services. It has growing and effective civil society organizations – which along with the electoral commission carry much of the credit for ensuring a credible election – and a free and lively press.
The power Buhari will now wield as an elected leader is that of popular pressure and democratic institutions − not the use of force. He will have to navigate the party politics of the still-nascent alliance that comprises the APC and transformed minor regional opposition parties into the new national political force. And while he will have to manage the competing interests and personal ambitions of those in his party, he will benefit from the experience and talent pool he has to choose from.
Crucially his vice president Yemi Osinbajo, one of the APC manifesto architects and a well-respected former attorney-general and Justice Commissioner of Lagos state, will be an important complement to a president with great ambitions for governance reform, but who will have to delegate and respect the rules of patronage politics in a time of austerity. The two are reported to have a good relationship. If this can be maintained over the next four years, and if the president can balance ambition, austerity and anticorruption with political realities, they may be able to achieve a great deal more than the economy, perception and Nigeria’s complex array of politics and thorny challenges may suggest.
SOURCE: Chatham House