Buhari is tinkering around the edges: Nigeria needs radical reforms

Barely three weeks after President Muhammadu Buhari took office, I wrote a column titled: “What Buhari must know about the politics of reform”. Based on insights from theories and empirical evidence of policy reforms, I drew the president’s attention to four hypotheses he should take cognisance of in taking forward his reform agenda. The hypotheses tell us the political conditions under which reforms can or can’t be achieved. Buhari is now nearly one year in office, so what do we know about his reform efforts and his approach to policy reform? Well,the president has not internalised the lessons of the hypotheses. So far, President Buhari has not shown the traits of a radical reformer. Yet, as I argue here, unless the president is bullish on reforms, he may miss the opportunity to transform this country. Let me start the intervention with a brief recap of the four hypotheses.

The first is the crisis hypothesis. It’s attributed to the American economist and sociologist Mancur Olson, who argued that a major crisis usually jolts a country out of its state of sclerosis, and triggers fundamental reforms. Indeed, many transformational changes have emerged from the ashes of a crisis. The second is the mandate hypothesis. Simply put, this hypothesis says that when a government has won a mandate for change in an election, the scope for reform is significant. Now, Nigeria faces crises of monumental proportions, and Buhari won a popular mandate for change. Both the crisis and mandate hypotheses thus favour the president and should embolden him to introduce radical reforms.

But the third and fourth hypotheses – honeymoon and weak opposition –are double-edged swords. Every new government enjoys a honeymoon during which the public gives it the benefit of the doubt and blames any sacrifice and difficulties on its predecessors. During a new government’s honeymoon, political and institutional opposition, including from the media, is usually weak and even supportive. However, a honeymoon never lasts, and once it ends, opposition will emerge and, often, ferociously, making the introduction of major reforms a lot more difficult. A wise government would, therefore, take advantage of the favourable political conditions presented by a crisis, a mandate, a honeymoon and a weak opposition to set out a bold and comprehensive reform agenda and build consensus for it. The only way a government can remain popular after a honeymoon has ended, and overcome opposition, is through the demonstration effect of its achievements.

Now, President Buhari has enjoyed a long honeymoon, during which he has blamed, ad infinitum, his predecessor and everyone else for the challenges his government faces. For instance, alluding to the Jonathan government, Buhari asked rhetorically, when addressing Nigerians in the UK during his recent visit, “Why is it that it’s when they have spent all the money, when they have made the country insecure that I returned?” The president blames the world economy too. He wondered why oil, which used to sell for over $140 per barrel, would drop to $30 “during my time as the president.” And, recently, he has been blaming the civil service and the judiciary for allegedly undermining his government. “The judiciary”, he said, “is my main headache on the fight against corruption”. Then, the entire federal civil service was branded as a “Budget Mafia.” According to the presidency, “These people run a cartel. They cut across all levels in the civil service, not only the top shots alone.” The picture one gets here is of a perfect storm, caused by the coalescing of adverse forces.

But here is the rub: if there is a perfect storm, if the nation is facing serious headwinds, as it certainly does on many fronts, you will not know from the actions of this government. Despite the crises, the mandate, and the honeymoon, the president is not in a hurry to reform. Both in style and in substance, Buhari’s government is largely in a business-as-usual mode.

Take the style. It took Buhari the first six months of his presidency to appoint his ministers, and when he eventually did, only a handful of them – just about five in my view – would make it into any competent and reformist government. The ministers were sworn in on 11 November last year, and the budget was presented on 22 December. In other words, the ministers had just over a month to input into a budget they are expected to implement. In the UK, the budget process takes over six months, with the active involvement of ministers and consultation with key stakeholders. President Buhari said that civil servants are the technocrats, while ministers are “noise makers,” but we now hear that the civil servants are, in fact, a bunch of saboteurs, who run cartels and “embarrassed” the president by heavily inflating the 2016 budget for personal gains. Indeed, the budget is so error-laden that the National Assembly and Nigerians are having a field day unpicking it. The shambolic 2016 budget has seriously undermined the competence of this government. If the government can’t get the budget right, how can it be trusted on its implementation? It’s certainly not enough to blame or sack civil servants, as the presidency has threatened; the whole governance process is flawed and needs a total overhaul!

But even beyond style or process, what about the substance of governance? Well, at best, the president is firing from two cylinders – security and anti-corruption – instead of several. And some critical stones are being left unturned. The economy is in a state of cataclysm. The civil service, as just discussed, is acutely inefficient and corrupt. And the country’s political structure is breeding violent nationalisms and irredentism everywhere. But what is the Buhari government’s direction of travel on these key national priorities, on the economy, on public sector reform, on political reform etc.? This is the time for a reformist president. The Telegraph newspaper in London recently described President Buhari as a “headmasterly figure” in the context of his war on corruption and indiscipline. Of course, given the level of corruption and indiscipline in this country, Nigeria probably needs a headmaster! But it also needs a transformational leader, with a vision of the future, who can radically transform the country.

We thought Buhari was that leader, and he can still be. But, so far, in the grand scheme of things, the president hasn’t proved to be a reformist. Despite belonging to a “progressive” party, the president is, in fact, very conservative. He is conservative on economic policy, still holding today most of the views he held over 30 years ago, even though the world has moved on significantly since then. He is conservative on political reform. He doesn’t believe Nigeria needs political reform or restructuring. But progressives are agents of change. For instance, most of the major political transformations in the UK, including the devolution of power, happened under a Labour government.

President Buhari said that the collapse of the Soviet Union converted him into a democrat. But the president should learn the right lessons from that collapse. The Soviet Union didn’t collapse because it lost its military power. No, even its successor, Russia, is still the most powerful military power in the world after the US. Rather, the Soviet Union collapsed because its command-and-control economic policy failed catastrophically and its centralised political structure was unsustainable! It’s also worth pointing out that fighting corruption and insecurity without comprehensive economic and political reforms is like dealing with the symptoms of a problem and ignoring its causes. And the truth, let’s face it, is that Nigeria’s current economic and political structures breed corruption and insecurity.

Take the economic structure. It’s been empirically proven that an over-sized state, a state that crowds out the private sector, is not only inefficient, it also breeds corruption. This is why a key measure proposed for curbing corruption is through the downsizing of the state and privatisation. A market-based economy, where market actors operate freely under a framework of rules and a competitive environment, is more productive than one in which government picks winners and losers. The vexed debate over whether or not to devalue the naira comes down to one simple question: should the government interfere with the market mechanism and determine who gets foreign exchange and who doesn’t or should it allow the forces of demand and supply to determine who gets what? The value of any currency needs to find a level at which there is a balance between those who want to buy it and those who want to sell it; if you like, it should be determined by market forces!

Of course, there is nothing wrong with a country wanting to defend its currency, but how? One of the major issues in the global economy now is whether China and Saudi Arabia would devalue their currencies. Both currencies are pegged to the dollar and are under pressure from the soaring dollar and, in the case of Saudi Arabia, from falling oil prices. China and Saudi Arabia have been using their massive reserves to protect their currencies. Saudi Arabia is also preserving the value of its currency through fiscal consolidation, with, as one Western newspaper recently put it, “the largest programme of government austerity in decades.”

Now, the point is this: if a country can’t defend its currency by raising interest rates to attract foreign money, by dipping into its reserves and through fiscal consolidation, all of which are painful, then it has no choice but to let the value of the currency drop. Russia and Kazakhstan, oil-dependent economies, have both recently abandoned their exchange rate pegs. Nigeria is drawing the ire of the international markets because it’s using a crude means to defend the naira by restricting access to foreign exchange and banning of imports. It’s effectively picking winners and losers in the competition for foreign exchange.

All of these are, of course, symptoms of a wider problem: the absence of a reform-minded government. This government has no economic plan, no political reform agenda, and no public sector reform plan. Basically, it has no strategic direction! President Buhari should lay out a comprehensive reform agenda. Time is running out!

Olu Fasan