398

Nigeria has endured another long wait for President Muhammadu Buhari to announce his new government. Re-elected in February, Buhari finally swore in members of his new cabinet on 21 August (AE 387/1). During the long interim, key officers of state have worked to steady the ship; Central Bank of Nigeria (CBN) governor Godwin Emefiele has won praise for his stewardship of an under-pressure economy, while vice-president Yemi Osinbajo continues to reassure investors.

Under pressure from multiple conflicts including the unending Boko Haram insurgency, deadly clashes between herders and farmers which have killed more than 4,000 people in the last three years, Niger Delta ferment and a significant upsurge in Gulf of Guinea piracy, Buhari has appointed a new defence minister, Major General Bashir Salihi Magashi, who retired from the army in 1999. There is also a new power minister, Sale Mamman from Taraba State, working on a crowded but too often unfulfilled energy agenda.

Boosting state finances – by raising hydrocarbons revenues, adding to agriculture and other diversification efforts and implementing fiscal reforms – is a recognised priority. CBN data show that, in May, government income was 51.9% below the budget target due to lower oil and non-oil inflows. Increasing the tax take is a politically sensitive priority for reappointed finance minister Zainab Ahmed as Nigeria seeks to improve one of the world’s lowest revenue collection rates (at around 7% of GDP). Meanwhile, Bloomberg reports that total debt reached $81.2bn at end-March ($25.2bn owed to international lenders), from about $65bn in 2015 when Buhari was first elected. With debt service now consuming more than half of actual revenues, the International Monetary Fund has calculated that debt could rise to almost 36% of GDP by 2024 and interest payments to 74.6% of revenue without major reforms.

Buhari has again kept the hydrocarbons portfolio for himself, but the appointment of Timipre Silva as junior petroleum minister has received a cautious welcome from industry. A former governor of Bayelsa State, Silva replaces Emmanuel Kachikwu, a former ExxonMobil executive who was seen as one among many elements delaying industry reform. A change of Senate president after the ambitious and combative Olubukola Abubakar Saraki lost his seat in February is also seen as a positive step. New president Ahmed Ibrahim Lawan, an All Progressives Congress politician from the north-eastern Yobe State, is closer to Buhari and could help to finally pass credible legislation.

Nigeria’s ambition to increase production and reserves is hampered by difficult operating conditions. Platts quoted the Lagos Chamber of Commerce and Industry’s oil producers trade group chairman Paul McGrath telling a 22 August event that “Nigeria ranks amongst the top ten countries with the highest cost of producing oil and gas equivalents per barrel. Security costs are escalating as peculiarities of the business environment require additional resources be deployed to secure our people and assets.”

And looming over everything are the expectations of a population of perhaps 190m. Calculating Nigerian demography is an inexact science when some citizens go unrecorded while other numbers are inflated by states anxious to maximise federal handouts. What is clear is that numbers are daunting: assuming 3.2%/yr population growth, the US Census Bureau has estimated there will be 402m Nigerians by 2050. From its ecommerce and tech start-ups to its hip-hop and Nollywood billionaires, younger generation Nigeria has a lot going for it. Buhari and his new government will have to move at unprecedented speed if they are not to sell that young population short in tackling a daunting list of challenges.