NewsWest AfricaNigeria's Good luck or judgment?

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Posted on Monday, 22 April 2013 11:17

Nigeria's Good luck or judgment?

By Nicholas Norbrook in Lagos

Sweet smiles of a demographic time bomb: in 10 years these children will be part of the 80 million looking for jobs/Photo©AFOLABI SOTUNDE/REUTERSThrough a confluence of good fortune, his own initiative and a team of reform-minded ministers President Goodluck Jonathan is stacking up arguments for re-election in 2015. But his critics are vocal and have formed a new opposition coalition, while pretenders lurk in the ranks of his own party.

 

The cautious optimism that greeted President Goodluck Jonathan on taking office in 2010 has shifted. His opponents say he is mild mannered, incapable of shielding his reform team and in the grip of the diesel-importing cabal that has brought the electricity sector to its knees.

"I cannot wait for 2015. It is too much! Jonathan is going to hear from us, just wait!", says Yemi Adamolekun, executive director of the Enough is Enough activist coalition. She argues that the momentum and connections made during protests about the removal of the fuel subsidy in January 2012 can be carried through to the next elections.

Dimieari Von Kemedi, a Jonathan confidant, says the opposition and media underestimate the president's low-key style: "Yes, he does not make much noise, but he is the first real civilian president and feels that institutions should be given the space to grow."

Von Kemedi points to controversy around Securities and Exchange Commission director general Arunma Oteh: "The House of Representatives and Senate both wanted her head because she had the temerity to attack one of their own. Jonathan let them talk,but in the end she is still there."

Through a confluence of good fortune, his own initiative and a good deal of work from reform-minded officials, Jonathan is stacking up the arguments he hopes will win him re-election.

By taming inflation, reforming agriculture to provide jobs and pushing through electricity privatisation, his administration claims it is helping the population, not just the elite.

PRESSURE TO PERFORM

Communication technology minister Omobola Johnson says: "We're all under pressure. We've all signed performance contracts with the president, the first time it's been done. Every minister is presenting to cabinet how far they have gone."

Set against this are the thousands who have died due to the Boko Haram insurgency, the burying of a damning report by former anti-corruption tsar Nuhu Ribadu that points to $31bn stolen from the oil sector under Jonathan's presidency, the stench of Jonathan's pardon of his political godfather Diepreye Alamieyeseigha, and continued delay in the passing of the Petroleum Industry Bill.

there are signs that the 'joined-up government is starting to coalesce

"Since taking the reins in 2010, Jonathan has presided over record debt levels despite the benefits of high oil prices. Jonathan fails to acknowledge the opportunities he inherited but is quick to disclaim responsibility for challenges that have only gotten worse under him, like insecurity," oppositionist and former minister Nasir El-Rufai tells The Africa Report.

Meanwhile, the rich are getting richer: Eko Atlantic City, for example, is a classic elite project. Victoria Island, a part of Lagos already divorced from Nigeria's tough everyday realities, is receiving a 900ha new city.

"At least in some of these new property projects, money is now staying inside the Nigerian economy, instead of fleeing to foreign banks!", says Bismarck Rewane, managing director of asset managers Financial Derivatives Company.

There is some credence to the government's claims of helping Nigerians. First, inflation – the scourge of the poorest, according to Brazil's former President Luiz Inácio Lula da Silva – has been brought into single digits for the first time since 2008.

With inflation at 9 percent in January, there may be some easing in the central bank's monetary policy rate of 12 percent. The funding of government deficits has largely outpaced lending to the real economy. This is largely down to the heavy lifting done in the finance ministry and linked institutions.

"Previously, when the oil price was high, we would spend like crazy. When it dropped, we could barely pick ourselves off the floor. That's changed," says Bright Okogu, director general of the finance ministry's budget office and one of the government's reformers.

There are several legs to the macro-economic overhaul. The tax take was N5trn ($32bn) in 2012, the highest in the history of the Federal Inland Revenue Services (FIRS) and up from N454bn in 2002.

This has come from broadening the tax base. Throughout history, greater taxation leads to calls for greater representation, so FIRS may unwittingly have conjured up greater democratic dynamism.

The Excess Crude Account is back up to $9.2bn, while foreign exchange reserves hit $47bn in 2013. These had fallen and stagnated under both President Umaru Yar'Adua and Jonathan. A sovereign wealth fund (SWF) was launched in 2012, incensing Nigeria's governors.

Their anger suggests that the SWF may be a politically savvy way to insulate savings from their rapacious appetites.

A second argument from the Jonathan administration is that agricultural reforms are slowly starting to bring improvements. The government is acting with uncommon vigour, led by agriculture minister Akinwumi Adesina.

The sector now represents Nigeria's best hope to provide jobs for some of the 80 million Nigerians under the age of 19. "The equivalent of the population of Kenya is going to hit the job market over the next decade," says Kola Masha, managing director of Doreo Partners.

To continue reading, get a copy of the April, 2013 edition of The Africa Report, on sale at newsstands, via our print subscription or our digital edition.



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