Nigeria’s general elections are scheduled for mid-February. As always, the campaigning is reaching fever pitch. While there are many posts to battle for, the big prize remains the Presidential seat. The heavyweight contest this time around is between the incumbent Muhammadu Buhari and PDP leader, Atiku Abubakar. With the help of Nigerian analysts, Raﬁq Raji assess their economic policies.
Elections for the Presidency and federal legislature are slated for mid-February; the gubernatorial elections in the country’s 36 states and other polls will follow in March. While there are more than 50 Presidential candidates including a few internationally recognised technocrats, all eyes are on the two leading rivals: the incumbent Muhammadu Buhari of the ruling All Progressives Congress (APC), seeking a second four-year term, and his main opponent, former Vice President Atiku Abubakar of the People’s Democratic Party (PDP).
Both candidates hail from northern Nigeria, but from different parts. Buhari is from the north-western part of the country while Abubakar is from the north-east. Whereas the northwestern geopolitical zone is quite peaceful, the north-east suffers from insecurity, with terrorists attacking key cities and towns now and then. Incidentally, the insecurity in that part of the country was one of the reasons why Buhari beat former President Goodluck Jonathan some four years ago. It also helped his chances that Jonathan was a Southerner – Northern voters did not have a difficult choice to make.
Things are not so straightforward this time around, even though Buhari still enjoys a cult following in the north. Inevitably, a significant portion of northern voters are likely to pitch their camp with Abubakar. Buhari is thus likely to secure most of the votes in western Nigeria and Abubakar the east. Understandably, most forecasts point to a likely close tally. To change the dynamics and perhaps win comfortably, each of the candidates must demonstrate the superiority of their ideas, and in this age of social media, the voting public is able to assess them easily very quickly.
Views from the ground
In view of this, the leading candidates have made a big show of their policy documents. Buhari calls his the ‘Next Level’ while Abubakar’s is ‘Let’s Get Nigeria Working Again’. Nigerians are quite used to these well-packaged plans now as there have been many in the past. But since the problems they were meant to solve, they cannot be blamed if they are somewhat sceptical about these new ones. Still, what is probably uppermost in their minds is prosperity – put simply, jobs. Both candidates promise as much.
In terms of economics, the Buhari administration did fulfil some of the policies in the Economic Recovery and Growth Plan (ERGP) but quite a lot has still to be achieved. In any case, renewed terrorist attacks in the northeast have yet again put security on the front- burner. Even so, it is widely believed that poverty is the root cause of insecurity in different parts of the country and that unless the root cause is addressed, insecurity will remain a constant factor. The religious-based insecurity has been aggravated by deadly clashes between herders and farmers in the middle belt of the country, caused largely by climate-change- related environmental factors.
The severe drying up of Lake Chad has led to drought-like conditions, forcing millions of herders to look for alternative sources of water and grazing and thus precipitating the clashes. The issues facing the country are complex. What do the two main candidates have to offer in terms of solutions? New African asked three leading analysts for their views.
Amaka Anku, Africa director for the Eurasia Group says: “I think what’s really at stake for Nigeria is revenue growth and infrastructure investments – so that’s the paradigm through which I’m analysing their policy documents. My main criticism is that both documents are extremely ambitious (unrealistic perhaps) in their spending plans, without much focus on generating revenue to implement those plans. Politically, I can understand why that is the case – talking about collecting or raising taxes isn’t exactly compelling for the general public. I was surprised that Buhari’s document is completely silent on the oil & gas sector – does this mean his administration will not push any reforms in this area? Quite strange to simply ignore such an important sector of the economy.”
“For Atiku, I’m concerned about the grand plans for infrastructure spending ($90bn a year) with zero discussion of revenue growth or even foundational work that needs to be done to formalise the economy and move Nigeria towards better tax collection – like the national ID scheme.”
Omotola Abimbola, fixed income and currency research specialist at Ecobank says: “We believe Nigeria could have its first Presidential election campaign fought on ideological grounds , with the two major parties campaigning on ideologically opposed sets of policies and programmes. At first glance, President Muhammadu Buhari’s Next Level plan appears to be a continuation of his administration’s existing policies and programmes, such as social investment schemes, welfare spending on the vulnerable, deficit financed infrastructure investment and public sector job creation. On the other hand, candidate Atiku promises reforms and policies to increase private sector participation in the economy, particularly privatisation of underperforming government assets in the oil & gas and transport sectors, liberalisation of the downstream sector of the petroleum industry, reduction in corporate tax rates, lower regulation, PPP funded infrastructure investments and promotion of investment understand friendly policies.
“In American political parlance, the PDP appears to be more conservative – smaller state, big business and low corporate taxes – while the APC’s plans bear close resemblance to the US Democratic Party’s agenda – big state and welfare spending to support the vulnerable. Ultimately, both candidates’ promises are ambitious vis-à-vis current fiscal realities, and their policy documents are conspicuously light on revenue- generating strategies to create more fiscal space. President Buhari wants to continue the current approach to creating jobs using government subventions and direct employment, a position at odds with increasing revenue pressures, already-high recurrent spending and a bloated CBN balance sheet.
“Candidate Atiku promised to create 3m jobs a year and double Nigeria’s GDP to $900bn in four years, which is a tall order with little consideration for age-long structural challenges limiting short- term growth potential. On the ERGP, we think the implementation is still standing on its first pillar of reforms – restoring macroeconomic stability. The implementation of the other four strategic areas: Economic Diversification and Growth Drivers; Competitiveness; Social Inclusion and Jobs; Governance and other enablers, will be further out due to administrative inertia in pushing through important structural reforms.
Malte Liewerscheidt, vicepresident at Teneo, says: “Atiku’s stated aim to double the size of the economy by 2025 would require annual GDP growth rates to jump to 12%. This is highly unrealistic as double-digit growth rates over longer periods are historically unprecedented. While the plan is almost guaranteed to fall short of target, the liberal reform measures suggested are still likely to inject desperately needed new momentum into the economy. Buhari’s re-election manifesto, on the other hand, essentially features more of the same. The state-centric approach to economic development has been preserved, while higher targets have been set. Yet given the weak economic performance, rising unemployment and a mounting debt pile over the past four years, there is nothing to suggest the old recipes would produce different results in a potential second Buhari term.”