Financial Information Company, Bloomberg, has blamed Nigeria’s economic woes on the “rigid leadership style” of the President Muhammadu Buhari-led administration.
Bloomberg further gave the All Progressives Congress-led government hard knocks for lacking visionary leadership qualities, adding that “Buhari’s election and pledges of good governance” had given hopes to the Nigerian populace and Africa at large, but that the president’s stiff and archaic economic policies “made the country’s problems harder to solve.”
This isn’t the first time Bloomberg is expressing serious doubts on the ability of President Buhari to turn around Africa’s largest economy and oil producer.
It had even warned that the history of failed economics was repeating itself in Nigeria following Buhari’s ascension to power in 2015.
It would be recalled that the financial software company declared earlier that South Africa had overtaken Nigeria as Africa’s biggest economy, citing the unfavourable economic policies of the Federal Government as being responsible.
In a separate report, Bloomberg wrote off President Buhari as lacking the desired know-how to fix the country’s woeful economic prospects.
THE WHISTLER further recalls an earlier warning by Bloomberg, indicating that the Central Bank of Nigeria (CBN) may be unable to save the Naira as its independence had been handed to President Buhari.
“Africa and the world cannot afford a failing economy in the continent’s most populous nation. Yet, that is exactly what Nigeria might be getting: Its economy is on track to shrink by 1.7 percent this year, the official unemployment rate has more than doubled over the last two years, and inflation is at an 11-year high,” said Bloomberg in a new report.
“One concrete step president Buhari could take to address the crisis would be to eliminate the country’s disastrous foreign exchange controls. Instead, Buhari has made no secret of his desire to defend Nigeria’s currency.
“And, the CBN has mostly gone along. Despite allowing the devaluation of the naira in June, it is continuing to manipulate the exchange rate-discouraging foreign investors, creating a crippling shortage of dollars for businesses that need to import, and feeding a currency black market. To keep down the street price of vanishing dollars, Buhari’s government has arrested informal money-changers. More capital controls are in the works.
“Dismantling Nigeria’s foreign exchange controls will, doubtless, cause at least, a short-term rise in inflation. Yet, doing so will not only draw foreign investment and make the economy more productive and competitive, but, also, cut off a conduit for corruption. Buhari can cushion the blow for Nigeria’s poor through targeted cash payments- an approach Nigeria has used in electronically delivering subsidies to poor farmers. That same mechanism could also shield the poor from the regressive impact of an increase in Nigeria’s value-added tax — which is relatively low but a potentially valuable source of additional government revenue.
“There are other ways to stimulate the economy, of course. But, Nigeria’s Senate rejected Buhari’s three-year spending blueprint and an ambitious campaign to borrow $30 billion abroad because they lacked details. Meanwhile, his reluctance to sell off state-owned assets has undermined other efforts to raise revenue.”
In a conciliatory tone, Bloomberg acknowledged that Buhari took over an almost-failing economy in May 2015, worsened by plunging global oil price but insisted the president must be flexible in his economic policies if he is to pull Nigeria out of the woods.
“To be sure, Buhari faced ugly circumstances when he took office in May 2015. The plunge in oil prices had left the economy reeling and government coffers bare, and attacks by Boko Haram were ravaging the country. Yet, while some progress has been made fighting both terrorism and corruption, Buhari’s rigid leadership style has made the country’s economic problems harder to solve.
“Buhari’s election and pledges of good governance rightfully raised expectations across Africa. To fulfill those hopes, however, he will have to demonstrate more flexibility,” it added.