Both Buhari & Jonathan Propose Deficient Economic Policies

The leading candidate of the APC opposition party, General Muhammadu Buhari, unveiled his economic policies for Nigeria on February 2nd, should he prevail in the upcoming March 28 presidential election. We already know that the economic agenda of the incumbent Jonathan-led administration continues to fail miserably in export diversification, and perhaps more importantly in promoting state revenue diversification. These failures, after being in power for 5 years, leaves Nigeria facing an unprecedented economic crisis with the heavily oil-dependent state struggling to cope with the sharpest decline in crude oil prices, falling to less than 50 dollars from its previous high of over 100 dollars 6 months ago. What we did not know definitively until February 2nd, and later on February 26th when he spoke at Chatham House, was how a Buhari-led APC opposition would differ substantially to rectify the current predicament. From what was presented at the statehouse in the Lagos Island Marina yesterday, there was no major policy shift from the Nigerian opposition leader. In fact they agree on everything, from the privatization of the power sector, on infrastructure, the need to increase manufacturing, and invest in mining and agriculture in Nigeria. The blue print presented by the opposition standard-bearer had little if any differences from the incumbent.

The primary difference that Buhari and the opposition are campaigning on, is his stance and “record” on corruption that continues to plague Nigeria. They assert that because they are “less corrupt” than the ruling party that they are better suited to deliver on the same promises that the incumbent has made. In this Buhari is known as the only major former military head of state that did not enrich himself while he was in office. He made sweeping reforms to rid the state of corruption while in power and had succeeded in improving the countries imbalance of trade. Buhari was overthrown by one of his deputies, Ibrahim Babangida, who is known as the most corrupt leader in Nigeria's history. Just last month in January of 2015 Buhari proudly sat in Babangida's residence in front of reporters and accepted his endorsement for the upcoming presidential election in February 14, 2015. To historians, academics and observes alike, Buhari's record on corruption is mixed at best. While it is clear he did not enrich himself as many of his military colleagues, he overthrew a democratically elected government and replaced it with a military one. In two years he was overthrown by one of his fellow generals, who ruled for almost a decade in one of the most corrupt governments on the planet, who then annulled another election and handed power to another corrupt military regime. So even on corruption, where Buhari is viewed as strongest, several serious questions remain. If Buhari had not overthrown a democratic government in 1983, would Nigeria have experienced 20 years of oppressive and corrupt military dictatorships? Even further, since Buhari did not give up power willingly but rather was overthrown after just 2 years, would he have sought to enrich himself later-on during his tenure if he had continued to rule? Also given that Buhari is leading a united opposition party that has openly welcomed former members of the ruling party who defected, including serving governors and lawmakers, how much less corrupt is the opposition APC than the ruling PDP? Are we to assume that no corrupt members of the PDP defected to the APC given the mass defections that occurred? And if that were true was the PDP as corrupt as Buhari and the APC leaders assert? Or if not, is the opposition APC party as anti-corrupt as they purport to be? If so “what fellowship hath light with darkness?” If you watch the campaign trail, the closest governor to Buhari is former PDP strongman Rotimi Amaechi of Rivers State who defected to the opposition just a year ago but is now the Director General of his campaign, while the key APC opposition governors who have been members of the opposition all along, namely Adams Oshiomhole and Babatunde Fashola of Edo and Lagos States respectively are clearly outsiders in his “court”, particularly Oshiomhole who many believe should have been the VP nominee.

In the actual arena of policy, just like the incumbent, the opposition continues to ignore the primary importance of; 1) building diversified means of financing government beyond oil and, 2) diversifying exports by overhauling Nigeria's financial services to facilitate higher levels of FDI from wider variety of capital investors in Nigeria. While it is nice to say we will invest more in mining, agriculture, and manufacturing etc. the questions remains, where is this investment capital going to come from? With oil prices declining and the central bank struggling to maintain the benchmark valuation it set for the naira, the Nigerian currency, it is not clear where Buhari and the opposition plan on getting capital to make these investments. Even if they resolve that problem, it will take a substantial amount of time to get these industries to the level that they will be making any visible impact on the Nigerian economy in terms of jobs and growth. This is particularly true for mining and some of the manufacturing proposals. The neglected financial services sector in contrast would take very little time to establish because the infrastructure for the industry already exists in Nigeria. In addition, with a robust financial service sector, which includes a larger pool of domestic asset managers bringing in diversified capital investment from all parts of the world, the opposition would have an answer to the initial question of where they plan to raise the capital to make investments in Nigerian industry, mining, and agriculture.

Moving Forward if the opposition hopes to distinguish itself from the ruling party they are going to have to do more than present a sketchy history and demonstrate some concrete policy differences. Especially if the APC prevails in the upcoming presidential election, Nigerians may be disappointed to learn that the outcome of an APC led federal government in Nigeria will yield few tangible differences given that the party and its flag bearer is yet to present any concrete policy objectives that differ substantially from the incumbent. Among the core issues that Nigeria faces, is inept policy makers working within a culture that rewards and praises bureaucratic inefficiency and incompetence from the top-down. Economic policy, and the bureaucratic agencies and officials charged with development are at the heart of the matter. Despite the hopes and promises, without concrete divergent policy objectives to correct this, it is highly unlikely that the election of a directionless opposition is going to do anything better.

Kuranga and Associates Limited is an investment management advisory firm and an asset manager with a principle practice area of Africa. To learn more about Kuranga and Associates go to www.kaglobal.net. © Copyright 2014 David Kuranga. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

David O. Kuranga; Ph.D.
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Kuranga & Associates Limited
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