With about 20 plus days to the much-awaited inauguration of Buhari and Osinbajo respectively as President and Vice-President of the Federal Republic of Nigeria, given the current realities of Nigeria’s economy, there is growing debate in various circles over what this might mean for business. Will the next four years be a time of real growth buoyed by change or will this be a time of stagnation or, God forbid, decay? What impact can the change agenda have on the fortunes of the private sector – can the Phoenix rise from the ashes; can Nigeria obtain a new life by arising from the ashes of the Goodluck Ebele Jonathan administration? The short cop out of an answer is, “it depends.”
According to World Economic Forum 2014-2015 Global Competitiveness Report, there are some problematic issues holding Nigeria back from more inclusive growth including: the need to deal decisively with corruption, insecurity and crime; the need to fix institutions urgently (such as its Criminal Justice System); the need to diversify government revenue sources and improve taxation; the need to improve access to finance and fix ailing infrastructure (such as power supply); the need to reform inefficient government bureaucracy and a poor work ethic, to name a few items. Fixing these issues would provide the environment for growth and yes, the APC manifesto addresses nigh on all of these issues, but are there indications that these are things a Buhari Presidency will in actual fact do? Buhari has mentioned in a number of media interviews that his priority will be security, economy, unemployment and corruption, however these statements are currently lacking in details. Will the incoming APC administration try to do too much too soon in response to the huge expectations and if so, would they run the risk of a certain level of policy inconsistency or even reversals?
Stagnation or decay could be the result if the incoming administration fails to take the hard decisions needed for change. The wrong signals could also be sent if the same old corrupt politicians are re-cycled into the Buhari administration, then businesses would fear that perhaps we are not in line for change after all. The 19-man transition committee was met with mixed reactions but it is perhaps better to hold off from making hasty conclusions till the shape of the starting line-up of Ministers is known. More important than perceptions is the fear in some business quarters that Buhari may end up “over-delegating”. Those who push this viewpoint cite the “fact” that his team members have always been given room to do the work – not a bad thing at all in and of itself, but they fear if political “hawks” find room in his government, it will ultimately lead to an erosion of his power and allow wrongdoing to be perpetrated right under his nose – you only need to see parallels with the Brazilian situation. They expect he would then move to deal with it but it will not be without a loss of credibility in the public eye. Some also fear that if the administration is not strategic in prioritising what to take on and fix, then it could take on issues that erode its momentum and distract it from the change we seek. Failure to deal with the fissures in Nigerian society would also eventually mean that the administration would rapidly erode the enormous goodwill that brought it to power.
So, what is the absolute minimum needed for growth and, therefore, the set of issues that the new administration must prioritise? If the antecedence of the APC is anything to go by, fixing the Criminal Justice System and improving Tax Administration are two things one would expect to be high on the agenda. If the antecedence of each member of the Buhari and Osinbajo duo is anything to go by, then dealing decisively with corruption, insecurity and crime would be issues one can also confidently see them addressing as a matter of priority. Buhari’s no nonsense style is also expected to positively affect the work ethic of public servants and lead to a willingness to work more efficiently in certain areas of government. If these outputs are achieved in reasonable time, we can expect international creditors and foreign investors to see a very attractive climate and government with which to do business and thus an improvement in access to finance by the private sector and greater investments in the quest to fix Nigeria’s ailing infrastructure. Perhaps, the more difficult issue, beyond via improvements in taxation, would be diversifying Nigeria’s sources of revenue.
In response to the question posed at the start, “will the next four years be a time of real growth buoyed by change or will this be a time of stagnation or, God forbid, decay? What impact can the change agenda have on the fortunes of the private sector – can the Phoenix rise from the ashes; can Nigeria obtain a new life by arising from the ashes of the Goodluck Ebele Jonathan administration?” It would appear that the longer answer is, “we are on track for growth right now, but each decision taken by the new administration could either take us closer to the dream or push us further away but our bet is that they will succeed and businesses should start preparing for growth in this time of economic adversity.”