From Foreign Press: Nigeria is making progress on economic reform and security

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On May 29, 2015, Muhammadu Buhari was sworn in as Nigeria’s president in a ceremony that Washington rightfully praised as the first democratic transfer of power in the nation’s history. He was elected on a platform to fulfill three core pledges: tackle rampant corruption at the state and local level, defeat the threat of Boko Haram and create an economy that shares prosperity more equitably and reduces Nigeria’s over-dependence on oil exports.

The president has taken the necessary steps to deliver on his election promises, and it is important for the United States to recognize his achievements. To date, Buhari’s anti-corruption successes include recovering up to $9.1 billion in stolen assets and prosecuting high-profile officials on corruption charges. On the security front, he launched a counterinsurgency that reduced Boko Haram’s threat as a conventional force and deployed the army to retake previously terrorist-controlled territories. Yet, in spite of these victories, much remains to be done if Nigeria is to rise again on the African continent.
In the fight against terrorism, a more structured engagement is needed from Washington to ensure Nigeria’s successful future. Under the previous administration in Nigeria, Washington provided limited assistance in the fight against Boko Haram, citing evidence of human rights abuses in the military. However, Buhari’s efforts to crack down on military corruption and abuse of power have led to increased contributions in the form of intelligence, surveillance, reconnaissance support and the pending sale of 12 Super Tucano attack warplanes. President Barack Obama’s administration is even considering sending a dozen US Special Operations advisers to the front line of the fight. This warming of military relations is highly encouraging and a sign of the US-Nigeria partnership potential.
As former US Ambassador to Nigeria John Campbell accurately identified, while Boko Haram is part of a global terror cell, its rise is as much about ideology as it is Nigeria’s years of political marginalization. US policies to support efforts to improve human rights and those displaced by fighting would be positive steps, but sustainable change demands economic engagement through foreign direct investment. The International Finance Corporation’s recent $73.5-million loan to support the development of a terminal to export fertilizers at Port Harcourt in the Niger Delta is an example of such positive investment and will be welcomed by the agricultural sector as Nigeria continues its economic diversification.

While Buhari’s administration has been criticized for its delayed implementation of economic policies, it is important to point out that the challenges facing Nigeria are compounded by the drop in the oil price, which has impacted oil-producing countries not just in Africa but across the world. Furthermore, rooting out endemic corruption is incredibly complex and takes years. The fact that Nigeria faces these problems should not divert Washington’s attention from the president’s aim to foster a sustainable political, economic and security landscape for the people of his country.

The announced budget plans to boost non-oil tax revenues by 20 percent in 2016, invest in infrastructure through greater capital expenditure and encourage entrepreneurship by lowering tax rates on small businesses illustrate the government’s ambition to diversify the economy and commitment to its citizens. Working with the Central Bank, it has shown a clear intent to build infrastructure to improve efficiency in the nation’s oil industry. The bank’s support of a $14-billion oil refinery project on the outskirts of Lagos is a prime example. Most recently, the decision to go beyond expectations and allow the market to set the exchange rate (thereby providing a lift to domestic producers while making imports more expensive) demonstrates that the bank is willing to alter long-standing policies as part of a broader economic strategy.

In a context of post-devaluation and the passage of a budget with economic diversification as its core aim, there is every reason to argue that the right blueprint is in place. Of course, this alone is not sufficient. The issues facing Nigeria are multifaceted and it will require not only time, but a collaborative effort with Washington and the wider international community to address these problems.

While not perfect, the Buhari administration does not just have a mandate from the people to reform the country after they voted to change the status quo. Its policy to diversify and restructure the market – if achieved – will redirect Africa’s largest economy on to a prosperous path. So often a socioeconomic and security trendsetter on the continent, Nigeria needs Washington’s support. Rest assured, the benefits will reverberate far beyond the State House in Abuja.

 

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