A much deserved victory lap may be over for the incoming government led by Muhammadu Buhari, as citizens, private sector businesses, investors and indeed the world at large are asking tough questions on how the former military ruler plans to manage Africa’s largest economy and oil producer, starting May 29, 2015.
Former Ekiti State governor, Kayode Fayemi, who is director of policy and strategy for Buhari’s All Progressive Congress (APC), represented the president-elect at the monthly Lagos Business School (LBS) breakfast meeting held last week, where he gave private sector CEOs a glimpse into the agenda of the incoming government.
According to Fayemi, the over-arching theme of the Buhari government will focus on tackling security, corruption and unemployment, emphasising that that corruption has a very strong negative link to both security and unemployment situations in the country. Other high-points of the Buhari agenda as explained by Fayemi are presented below:
WEEK 1: Announce cabinet ministers Muhammadu Buhari will hit the ground running in his first week as president and commander-in-chief, with a seismic cabinet reshuffle from agriculture to youth development.
According to Kayode Fayemi, anyone with a whiff of corruption or other tainting will not be on the cabinet, as Buhari’s body language will reflect zero tolerance for corruption. According to wire reports, the president-elect recently made comments that his appointees would be required to declare their assets before and after their service to the nation.
*OCTOBER 2015: “Action!” But real government action may not begin until October, when Nigeria turns 55. Fayemi explains that the current 2015 bud- get is the work of the out- going Jonathan administration and there are indications that it may be passed in April. A supplementary budget, therefore, cannot be ruled out, as BusinessDay expert polls suggest.
More so with an APC majority hold in the new parliament – smooth sailing is most assured for the president-elect. Buhari will seek to align the electoral and fiscal calendars, later into his administration, in order to avoid this type of budget fix.
*OFFICE OF THE VP: “…For justice and economic management”. Vice President-elect Yemi Osinbajo already has his work cut out for him, going by his past incarnation as a commissioner for justice in Lagos State. Fayemi explains that Osinbajo will bring his credentials to bear in a major revamp of the judiciary to complement the anti-corruption drive and the rule of law.
Osinbajo will also anchor the economic committee at an unenviable period in the country’s growth trajectory.
*GOVERNMENT MACHINERY: “The Leaner … The Better”. The operational model for the government will be “largely in line with the Steve Oronsaye presidential committee report,” says Lagos-based Renaissance Capital interpreting Fayemi’s views in an emailed statement received by BusinessDay.
This will involve resolving overlapping and redundant government ministries, departments and agencies. For instance, key anti-corruption agencies may be collapsed into a bigger and more effective single-entity. The Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC), easily come to mind.
*CENTRAL BANK OF NIGERIA (CBN) – “…easing a banker’s burden”.
The new government’s diagnosis for the apex bank is – a CBN overburdened with developmental finance issues, at the expense of its core objectives. Fayemi says this will be changed. One way to effect change is to harmonise fiscal policies with CBN monetary policies to support the economy. *FUEL SUBSIDY: “… only a matter of time”.
The thorny issue of subsidies on petroleum products will be laid to rest by the Buhari government, along with industry-wide reforms “as a matter of priority” in order to attract new investments. Recall, that the current Jonathan administration was forced to take a populist choice to stay fuel subsidy removal back in 2011, opting for a partial drop in the pump price to N97.00 and more recently N87.00.
*POWER TRANSMISSION “…4000MW addition per year”.
Buhari will look to add-on 4,000MW of power every year and achieve a minimum target of 12,000MW by 2019. “Transmission will be deregulated, regionalised and privatised in order to break down centralised transmission,” says Fayemi, explaining that the new government will also address issues of gas supply to generating companies (GENCos). *SAVE N3 TRILLION FROM LEAKAGES N3 trillion in savings can come out of plugged leakages, according to detailed estimated and think-tank research, says Fayemi.
The amount compares as almost 70 percent of the current 2015 budget, suggesting that the government spending could easily double if leakages are plugged.
*FX MARKETS: “Free from fiat”. One pro Buhari election campaign slogan promised “one naira to one dollar” but Fayemi debunked the view that the incoming government will use fiat to fix the exchange rate – obviously the only way such a feat could be achieved. The government will allow market forces to prevail, including foreign exchange.
However, the government will keenly seek to protect the more economically vulnerable segments of the society.
*TAX: “Tight and steady”. Tax hikes are unlikely in the new administration but an aggressive tax collection drive will be required. The Federal Inland Revenue Service (FIRS) will be strengthened to leverage on the Lagos State model to achieve higher non-oil generated revenue.
Lagos State currently boasts of 75 percent budget financing from internally generated revenue (IGR), according to data from the National Bureau of Statistics (NBS).
*INFRASTRUCTURE FINANCING: “80:20 bud- get not acceptable”. The new government will develop a master plan to address the huge capital outlay needed to bridge the country’s infrastructure gap.
A situation where the recurrent budget is almost 80% and capital budget only 20% is not acceptable, says Fayemi.
