This Bloomberg Editorial Suggests Buhari Can’t Lead Nigeria Out Of Recession

One of the top business news and analysis website in the world, Bloomberg issued a scathing editorial on Monday lamenting that Nigeria lacks a visionary leader that can take Nigeria out of recession.

This was by far some of the strongest written article by a foreign news editorial board about the poor handling of the economy by Buhari and his main lieutenant, Godwin Emefiele. The article accused the government of manipulating the flexible exchange rate, introducing controls, reluctance to sell assets etc. and more succinctly summarized Buhari leadership style as “rigid” and “has made the country’s economic problems harder to solve”.

The editorial is basically saying Buhari is not good enough to lead Nigeria out of this economic mess.

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See the full editorial below;

Nigeria’s Economy Needs Visionary Leadership

Africa and the world cannot afford a failing economy in the continent’s most populous nation. Yet that is exactly what Nigeria might be getting: Its economy is on track to shrink by 1.7 percent this year, the official unemployment rate has more than doubled over the last two years, and inflation is at an 11-year high.

One concrete step President Muhammadu Buhari could take to address the crisis would be to eliminate the country’s disastrous foreign exchange controls. Instead, Buhari has made no secret of his desire to defend Nigeria’s currency.

And the central bank has mostly gone along. Despite allowing the devaluation of the naira in June, it is continuing to manipulate the exchange rate — discouraging foreign investors, creating a crippling shortage of dollars for businesses that need to import, and feeding a currency black market. To keep down the street price of vanishing dollars, Buhari’s government has arrested informal money-changers. More capital controls are in the works.

Dismantling Nigeria’s foreign exchange controls will doubtless cause at least a short-term rise in inflation. Yet doing so will not only draw foreign investment and make the economy more productive and competitive, but also cut off a conduit for corruption. Buhari can cushion the blow for Nigeria’s poor through targeted cash payments — an approach Nigeria has used in electronically delivering subsidies to poor farmers. That same mechanism could also shield the poor from the regressive impact of an increase in Nigeria’s value-added tax — which is relatively low but a potentially valuable source of additional government revenue.

There are other ways to stimulate the economy, of course. But Nigeria’s Senate rejected Buhari’s three-year spending blueprint and an ambitious campaign to borrow $30 billion abroad because they lacked details. Meanwhile, his reluctance to sell off state-owned assets has undermined other efforts to raise revenue.

To be sure, Buhari faced ugly circumstances when he took office in May 2015. The plunge in oil prices had left the economy reeling and government coffers bare, and attacks by Boko Haram were ravaging the country. Yet while some progress has been made fighting both terrorism and corruption, Buhari’s rigid leadership style has made the country’s economic problems harder to solve.

Buhari’s election and pledges of good governance rightfully raised expectations across Africa. To fulfill those hopes, however, he will have to demonstrate more flexibility.

Nairametrics

Nairametrics

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

Comments 2

  1. Anodebenze says:

    Static and unlucky president,well president Buhari brought it to himself,a leader must have a moral courage to do the right for the nation.i think he is a lucky president,under Obasanjo the senate and the house of reps are full of egoistic bastard,they had chuba okadigbo,the so called mature ex-governor of imo,they do not love or hate obasanjo.they did what they have to do,even in the reps,the speaker of the house of rep from Kano,not a fan of Obasanjo.in the senate they keep impeaching their senate president and settle on Anyiam from ebonyi state. a compromise and moderate senate president.if the senate in a obasanjo administration are on this same level today,they would have impeached saraki and buhari.
    This criticism of buhari originated from Nigeria,by financial time and Bloomberg.the british financial times correspondent was residing in Nigeria for a couple of month called Margret Fink.she travelled all over nigeria and cameroun.she reported that Nigerian govt was paralysed by inactivity while the people of Nigeria were vibrate,and the causes of all these recession,staganation IS BEING AND CAUSED BY THE NIGERIAN GOVT,she read Nigerian newpaper,and came to her conclusion.
    the financial time section was captioned INVESTING IN NIGERIA.this report is a repeat of what she saw and being saying since this year,and the American newsonline Bloomberg picked it up, like joining the bandwagon of criticism of buhari,and this is not the first to happen this year

  2. William from Lagos says:

    Kindly provide link to the original article

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