Nigeria's Opposition Preys on President Buhari's Weakness: A Faltering Economy
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Ahead of Nigeria’s presidential elections, a faltering economy is giving the opposition hope.
By Neil Munshi
Opposition candidates seeking to unseat Nigeria’s president, Muhammadu Buhari, are attacking his economic record and treatment of foreign investors as election season intensifies in Africa’s most populous country. Four members of Buhari’s own party who have defected to the opposition to challenge him are pitching themselves as more business-minded candidates who can jump-start a sluggish economic recovery.
Their criticisms of Africa’s biggest oil-producing nation, which is set to hold elections in February, come as two clashes highlight Buhari’s vulnerability on economic policy, even as rising crude prices deliver a boost.
The administration has come under fire for a decision by the central bank and attorney general to impose $10 billion in penalties on South African mobile giant MTN. The president’s office has also lashed out at HSBC over a research note for clients suggesting that Buhari’s re-election would stunt economic growth.
His former allies are pouncing on discontent with the economy. The campaign slogan of Bukola Saraki, president of the Nigerian Senate, is “Let’s Grow Nigeria.” Aminu Tambuwal, governor of Sokoto state and a presidential hopeful, said, “The economy is not showing any real signs of improvement.” Sen. Rabiu Kwankwaso, another contender, said earlier this month that the Buhari administration had “destroyed” the economy.
If the opposition was to ask the average Nigerian, ‘Are you better off than you were four years ago?’ the answer would be no.
Chris Ngwodo, political analyst
Buhari was considered all but unbeatable as recently as a few months ago. But this week an important state election offered him a stark warning. His All Progressives Congress party found itself in a runoff to defend the governorship in Osun state, which it controls and which will be central to the president’s re-election prospects.
Lagos’ business elite hopes that a Buhari defeat would help revitalize Africa’s largest economy, which has stumbled out of a recession brought on by the oil crash, but made worse, critics argue, by the administration’s economic mismanagement.
The administration has defended its record, touting achievements that include a rise in foreign reserves; a current account surplus; significant power, road and rail infrastructure investment; and a drop in inflation. Its policies have helped Nigeria move up 24 positions on the World Bank’s Ease of Doing Business Index, from 169 in 2016 to 145 in 2017. Vice President Yemi Osinbajo is also widely admired in the business community.
Even critics concede Buhari was dealt a bad hand in a country where oil accounts for 56 percent of government revenue, entering office in 2015 as crude prices slumped.
“But if the opposition was to ask the average Nigerian, ‘Are you better off than you were four years ago?’ the answer would be no,” says political analyst Chris Ngwodo. “There have been huge job losses, and the country is barely inching out of recession.”
GDP growth slumped to an annualized 1.5 percent in the second quarter, causing economists to lower their forecasts for 2018 growth to 2.3 percent. The Nigerian stock exchange is among the worst performing in the world this year.
Buhari claimed his party’s presidential nomination in September. It is unclear yet whether the opposition can unite behind a candidate who can overcome voter apathy in the south and the president’s strength in the populous north. So far, multiple parties are holding separate primaries in October, each picking their nominee. But the president’s approval ratings are near record lows, touching 45 percent in the most recent survey by NOI Polls.
This month the president’s office let loose on HSBC, which in July released a research note that criticized the government’s convoluted exchange rate regime for causing a range of “inefficiencies” and said a second Buhari term “raises the risk of limited economic progress and further fiscal deterioration.”
The president’s office was not pleased. “What killed Nigeria’s economy in the past was the unbridled looting of state resources by leaders, the type which was actively supported by HSBC,” read an official statement, accusing the bank of facilitating money laundering by Nigerian politicians. An HSBC spokesperson said it had no comment on the matter. In a country known for corrupt politicians, Buhari is widely seen as clean, and has been praised for cracking down on public graft, even as some of his allies have been ensnared in scandal.
Adeyemi Dipeolu, economic special adviser to the president, wrote in an op-ed this week that the HSBC analysis lacks nuance. “While the economy has not yet reached desired growth levels, there are positive developments in macroeconomic conditions, the real sector, the business environment, social investments and infrastructure,” he wrote.
Former Vice President Atiku Abubakar, one of the first high-profile politicians to defect and challenge Buhari, said in a statement that the administration’s attack on HSBC was “comical and pathetic.” Abubakar told reporters last month that the Buhari administration’s battle with MTN, the country’s largest mobile carrier, was evidence of how the president had “actually driven out foreign investment by his policies.”
The MTN saga began on Aug. 29 when the central bank ordered the mobile company — which has over 50 million subscribers in Nigeria — to return $8.1 billion it allegedly illegally repatriated. In addition, the attorney general said the company owed $2 billion in back taxes. The news wiped one-third off the company’s market value. MTN denies all wrongdoing and has filed a lawsuit against the government.
The central bank has since struck a more conciliatory tone. “I am very optimistic we will resolve the matter and I believe that everybody will be happy. MTN will be happy, the banks will be happy. [The central bank] and government would be happy,” Godwin Emefiele, central bank governor, told reporters this week, following a statement last week stressing that Nigeria “will continue to welcome foreign investments and investors.”
But critics say the aggressive moves against some of Nigeria’s biggest foreign investors is emblematic of a Buhari mentality that, they argue, is stuck in the 1980s, when the president ruled Nigeria as head of a military government.
“It really speaks volumes [about] the mindset of the government,” says one Lagos-based executive.
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