The increasing vacuum which is now evident in President Muhammadu Buhari’s leadership style of ‘moving at his own pace’, has huge economic, political and security costs for the Nigerian nation.
Many Nigerians had expected this administration to hit the ground running immediately after the president was sworn-in on May 29, but six weeks after, Buhari has kept Nigerians and investors guessing over how he will go about the job, leading to some Western publications and the vociferous Nigerian social media space dubbing him as “Baba Go Slow” or “sluggish man”.
The cost effect of his administration on the Nigerian economy also reflects on declining investor confidence, as foreign investment inflows into the Nigerian market drop, with a negative spillover on foreign exchange (fx) rates and capital market valuations.
Currently, there is no clarity in policy direction of Buhari –ranging from lack of proper articulation of key policy goals to lack of proper funding of the economy and efficient transmission of the little funds available.
Also, because there are no ministers currently in this Buhari- led administration, payment of FG contractors has slowed or even halted. He has neither appointed a Chief of Staff nor Secretary to the Government of the Federation – both key appointments critical to the functioning of a government – he was supposed to make within 48 hours of taking over leadership powers of Africa’s largest economy .
The implication, according to analysts, is that with the absence of ministers, no one is reaching out to worried investors and development partners to provide a sense of direction and re-assurance.
Though, Buhari’s recent renewal of the contract for Canadian firm, Manitoba Hydro International and the appointment of service chiefs offer some hope.
“The slow-pace of the new Buhari administration, and in particular ,lack of clarity about its policy direction is exacting significant costs on the Nigerian economy”, said economic analysts at Lagos-based firm, RTC Advisory Services Limited.
Amid the seeming failure to deal with the wasteful fuel subsidy regime –although Buhari’s transition committee has clearly advised that the subsidy be removed, he appears not to be minding that the third-quarter (Q3) fuel import contracts have gone out, another cost Nigerians are bearing today.
Currently, the CBN is facing the challenge of a pressured FX market which is drying up –an implication that trade and commerce is slowing down significantly, with looming job losses.
There is worrying resurgence of insecurity in the North Eastern part of the Nigeria, another ugly scenario that is dampening investor expectation of the return of business and commerce in that region of Africa’s biggest economy by GDP size.
According to economic analysts at RTC Advisory Services Limited, “It is evident from both exchange rates and capital market performances that the economic costs of government statistic are not theoretical, but real and substantial”.
Although, Buhari has finally changed the services and security chiefs, those appointments were seen to have come so late in the day, but analysts saw it as a move to stave off criticism or questions from Washington – where he is visiting United States President, Barack Obama and key members of his administration to discus tactics to defeat the Boko Haram insurgency.
As at the last count, there are about 650 recorded deaths directly caused by Boko Haram activities mainly in the North Eastern part of the country over the last six weeks despite the President’s directive that the Military Command and Control Centre be moved to Maiduguri, the supposed base of the insurgents.
Economic analysts at RTC Advisory Services said, “Available macroeconomic data suggests Nigeria’s problems with oil prices and the consequences thereof, will not abate any time soon. He has not yet nominated a cabinet and in the last month, has run the country with civil servants. Feelers from the Presidency have explicitly suggested a cabinet may not be named till September 2015, four months after assuming office.
“It is a style that so far, has significant costs. Politically, it has fractured the party as various factions try to seize the initiative, resulting in the confusion in the National Assembly where the party’s nominees for both Senate Presidency and House of Representatives Speaker were defeated by party insurgents with support from opposition lawmakers. With regard to the economy, policy vacuum and inertia are affecting confidence as initial euphoria fades and economic indices, particularly foreign exchange rates and capital market valuations worsen”, the analysts added.
According to them, “The delay was initially assumed as designed to allow the transition committee conclude its work to enable the government start with a clear policy direction. Then it was assumed to be as a result of political infighting within the factions that constitute the ruling APC.
Some sources suggested it is because many nominees are failing integrity scrutiny by the Secret Services and Economic and Financial Crimes Commission (EFCC). Now it is appearing as just a matter of presidential style. It appears that President Buhari, unlike his past record, is not delegating and is unable to move with speed and decisiveness.“
CHRIS AKO
