Buharinomics is the renewed hope for economic progress, new opportunities for the private sector, and better living conditions anticipated in Muhammadu Buhari’s Presidency.
Derived from the name of Buhari himself, who is known for sterling leadership attributes, the word captures the hope of change in government business, reduction in wasteful spending, and sincerity in leadership that translate meaningfully into the lives of citizens.
Previous administrations with unprecedented consumer instinct left widespread corruption, poverty, stunted economic growth, and an empty treasury despite huge government earnings.
Four prominent businessmen who were in South Africa for the World Economic Forum 2015 discussed the economic outlook for Nigeria at a breakfast hosted by RMB Nigeria.
Great opportunities
Christian Wessels, Deputy Group Managing Director of TGI Group, a leading Nigerian conglomerate, expressed confidence that democracy has been entrenched and that he sees great opportunities for providing appropriate goods and services to the 170 million population.
“There are numerous opportunities for private sector producers to cater for different price points, tastes and regional preferences. We hope the new government will act against smuggling which will help local producers,” Wessels told Business Journal.
“[Buhari] needs to increase government efficiency and diversify the economy away from its reliance on oil.”
Wessels believes the future creation of jobs rests on three sectors: agriculture, consumer, and financial services.
“We have enough land to create a strong agricultural sector, while the consumer market is currently underserviced and underpriced offering numerous opportunities for job creation.
“Financial services is also under-serviced with only 30 per cent to 35 per cent of Nigerians having bank accounts.”
Need to improve infrastructure
Nigeria Sovereign Investment Authority (NSIA) Chief Executive Officer (CEO), Uche Orji, stressed the need to improve infrastructure and consumer and financial services sectors.
“The government has limited financial resources so would be open to private sector participation particularly in infrastructure projects.
“Many Nigerian assets do not have a strong cash flow and would welcome private sector participation, such as a stock exchange listing, to get them going again, said Orji, whose NSIA which manages the Nigerian Sovereign Wealth Fund (NSWF).
He sees in the longer term, small and medium enterprises growing as the government improves power supply, strengthens the democratic system which will, in turn, strengthen institutions such as the Development Bank of Nigeria that will facilitate investment.
Diversifying the economy
One of the biggest challenges the new government faces is diversifying the economy from reliance on oil to support fiscal recurrent expenditure.
Africa Finance Corporation (AFC) CEO, Andrew Alli, noted that there has been a lot of talk about scrapping oil subsidy and what happens next will demonstrate what the government plans to do.
“I believe an immediate abolition with a six-month window would be the best thing to do,” said the boss of AFC which finances infrastructure projects across Africa.
His other suggestion for change is to float the naira against the dollar.
“The new government is not much different ideologically from the previous one, but the difference will come in how it executes things and what it prioritises.”
Alli is cagey about the longer term, saying the next 12 to 24 months raise some concerns.
“One of the keys to success for the Nigerian economy is the ability to create jobs particularly for the 70 per cent of the population who are under 30.
“Just to remain at an unemployment rate of around 6 per cent and under-employment of about 25 per cent, we need to create millions of jobs annually.
“Another factor to watch for the longer term is how to use technological innovation to leapfrog the infrastructure which we don’t already have.”
The financial services sector is also expected to experience improvement as the Central Bank of Nigeria (CBN) introduces international banking standards such as Basel 2 and 3.
Security, power supply, productivity
“We see an embracing of change in the sector,” said Michael Larbie, RMB Nigeria CEO and RMB Regional Head West Africa.
“Changes are also taking place to address potential increases in the industry’s non-performing loans (NPLs).
“With the strict adherence to 5 per cent NPL ratios, opportunities will arise in repackaging and selling off any troubled assets to willing buyers.”
Larbie believes economic diversification and improved power supply will increase productivity and prices. And “if we take care of security in the North of the country, it will open up other sectors within the economy such as mining.”
