Nigeria Politics


Nigeria: Buhari appoints new cabinet, now it's time to deliver

November 11, 2015

Nigeria ended five months of political stalemate on 11 November after President Muhammadu Buhari swore in 36 ministers to his cabinet. Buhari won the 28 March general elections, which led to Nigeria’s first-ever peaceful political transition. However, far from reaping the benefits of the “dividends of democracy”, the long delay in appointing the new cabinet has led the country into a political impasse and, consequently, to much-needed economic reforms being postponed. Moreover, the lack of initiative came amid a context of a tough economic and political environment. Low oil prices are eroding the government’s fiscal positon and adding pressure in the financial and exchange rate markets, while Boko Haram militants’ activity is continuing to destabilize the northeast of the country.

Buhari’s cabinet will be smaller than that of his predecessor Goodluck Jonathan, which had 42 members. According to Nigeria’s constitution, the cabinet has to include at least one member of each of the country’s 36 states. Buhari appointed Kemi Adeosun as the new Finance Minister who will have to deal with an economy that has been severely hit by a 40% decline in crude prices. One of Adeosun’s priorities, along with rekindling faltering growth, will be to narrow the government’s rampant fiscal deficit, which could include a substantial reduction of subsidies and infrastructure investment. Babatunde Fashola, Minister of Power, Works and Housing, will have the challenge to improve the country’s energy sector and put an end to perennial power outages. As expected, Buhari will take over the oil ministry himself, while Emmanuel Ibe Kachikwu will be head of the state oil firm Nigerian National Petroleum Corporation as junior oil minister.

Although the country now has a new cabinet, Buhari has a tough road ahead. Oil prices are expected to remain low for the foreseeable future, therefore dashing hopes of a prompt and strong improvement of the economy. In an attempt to bolster business confidence, the new cabinet should soon present a credible roadmap of future economic reforms and assess whether the current exchange rate is appropriate given the negative spillovers that maintaining the naira at present levels has on the economy.

Author: Ricard Torné, Lead Economist

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