Indignation ensued this week after UK Prime Minister David Cameron was overheard describing Nigeria and Afghanistan to the Queen as ‘possibly the two most corrupt countries in the world’. But not from Nigeria’s President Muhammadu Buhari. ‘I don’t want an apology,’ he was quoted by the BBC as saying at an anti-corruption summit in London on 11.5.16. ‘What would I do with an apology. I need something tangible.’
Whilst the President attends the London summit the main economic ministers are back in Abuja – slugging out with national fuel shortages, chronically unreliable electricity supply, and a deepening foreign exchange crisis.
The general perception is of economic stasis due to a combination of crashing oil prices, the legacy of corruption and mismanagement from the Goodluck Jonathan administration, and exchange rate policy. But also – significantly here – Buhari’s anti-corruption campaign.
As a prominent Lagos banker said, ‘The government has to choose. Does it want economic growth and to try to regain its popularity, or is it going to plough on with a crackdown which could last for years?’ Like many in finance and trading in Lagos, he argues that, in its anti-corruption drive, the government risks losing the confidence of business people: ‘Some will just shrug and close up shop until better times come if they can … Others are actively seeking to exploit the crisis. There is a danger that the government’s strategy proves counter-productive … Some are trying to block the anti-corruption campaign by making the economy ungovernable. It’s fuel shortages first, then you will see scarcity of other commodities … and see people react.’
Everyone acknowledges the reality of the economic slowdown, even if there is no consensus on a strategy to deal with it. The National Bureau of Statistics estimated Nigeria’s fourth quarter 2015 rate of GDP growth at 2.1% and then, on 8 April, the International Monetary Fund (IMF) released a report estimating 2015 growth of 2.7% and predicting that it would fall to 2.3% this year. Although the IMF added that 2017 should see growth recovering to over 3%, it qualified that assessment as dependent in part on a revival of the oil market.
Meanwhile, the IMF has been becoming more publicly insistent on exchange rate reform – essentially a managed devaluation. In return, the government has become more insistent on its nationalist position. In that sense, Buhari’s trip to Beijing served two purposes: to bring in as much as US$8 billion of new financing from China; and to counter pressure from Western governments, banks, and international financial institutions to rethink its strategy. That stance seems to have informed the government’s position on funding joint venture productions with international oil companies.
So far, Finance Minister Kemi Adeosun’s statements on whether the government will meet new commitments on its cash calls on joint ventures have been warning shots. But the idea that cash calls are pushed to the back of the queue of forex commitments as the government struggles to fund its budget deficit is making oil companies seriously uneasy.
Without doubt, political pressure is mounting on the government, pressure that is directly linked to the economic slowdown hitting businesses and the voluble middle classes. But are President Buhari and his team at Aso Rock listening?
Although Buhari has proved a far more effective ambassador for his country than many of his critics had predicted, one of his close friends described him to Nigeria Focus as ‘a natural introvert’ surrounded by a group people who are either like minded or ‘determined to control closely all access to the president.’ The three most powerful people in the presidency are Chief of Staff Abba Kyari, a former director of United Bank for Africa; Mamman Daura, Buhari’s nephew and life-long friend; and Secretary to the Federal Government Babachir David Lawal. Kyari and Daura are contemporaries of Buhari, 73, but Lawal is 61. They all share Buhari’s analysis that there will be a painful adjustment as the government restructures the economy from oil dependence. Equally, they see most of the current complaints coming from the elite or the middle class – the prime beneficiaries of 15 years of oil-fuelled high growth at the expense of most of Nigeria’s 180 million people.
This disjuncture between the Buhari government and the middle classes and super rich is becoming politically important. Buhari’s legitimacy in the wake of last year’s epic national election, his anti-corruption credentials, and his security professionalism against the Boko Haram insurgency are wearing thin. The election is now history, and the business class is convincing people that Buhari’s anti-corruption is biased and is slowing down the economy.
Of particular concern to the president may be the significant drop in the number of respondents expressing support for the anti-corruption drive, which stood at 44% in March, down from 45% in February and 76% in January. There was also an increase in respondents expressing concern that the rule of law is being disregarded in the anti-corruption campaign from 35.3% in February to 38.4% in the March poll. Those who believe the president is targeting his political opponents in the war on graft also increased to 35.1%, from 34.4% in February
Even with respect to security in the northeast, where there has been observable progress, the government risks squandering these gains. Successive statements claiming to have ‘technically defeated’ Boko Haram have failed to convince, especially when they are quickly followed by a new outrage such as a school girl suicide bomber blowing herself up in a crowded marketplace.
A case in point was the second anniversary of the kidnapping of the over 200 Chibok school girls. Instead of openly engaging with the families and campaigners on the commemoration, government officials seemed keener to inform people of successes elsewhere: claims that security forces have rescued over 4,000 people abducted by Boko Haram this year.
The Buhari government has had a terribly difficult first year and took far too long to get off the ground, making its appointments and setting its budgets and so forth. Its communications with Nigerians are still dire. It wants to modernise the economy and break down the traditional and corrupt patronage systems. That could win support if the economic disruption can be minimised.
But government also needs to reach out to Nigerians to explain its policies. What is lacking is the openness that was promised in the election campaign. Some of Buhari’s media performances have been good, but many observers believe the government doesn’t know or care how bad things are getting outside the Abuja bubble.
The situation is by no means irretrievable. While Buhari may be asking for something tangible from Britain and others, what he needs is some tangible success at home in the war on graft and in the economy, in the face of an opposition that is trying to weaken his hand by shutting down the economy.
It is the secrecy of countries such as the UK (and its territories), Switzerland and Panama, among others, that has facilitated the outflow of money from Nigeria. If Buhari can get help from these countries in the form of information about beneficial owners, or an ability to repatriate illicitly gained funds (as is already being carried out with the money kept by late former military ruler Sani Abacha in Switzerland), he may be able to both show that he is winning the war on corruption and employ the returned money to boost the economy by implementing an ambitious, but vital, budget for 2016.