Buhari’s inaugural speech: The business perspective

ON May 29th, Muhammadu Buhari was sworn in as the President of the Republic of Nigeria in a historic ceremony at Eagle Square in Abuja.

The Business Year (TBY) attended the ceremony in order to cover the event for its annual economic publication on the Nigerian economy, The Business Year: Nigeria 2016.

Due to the unique position that Buhari occupies as one of the first Nigerian heads of state to come to power in a peaceful transition after winning a nearly unmarred election, there is pressure for him to take immediate action to realize his campaign goals. The content and rhetoric of his acceptance speech may give an indication of his intentions as head of state.

For business, those intentions are crucial. Over the course of nearly 50 interviews that have been conducted this year by TBY in Nigeria, executives across all sectors of the economy have indicated that they are waiting for key policy moves to be announced before making investment or business decisions.

This apprehension has been exacerbated by the fall in oil prices, the devaluation of the Naira, and the ongoing fuel crises, all of which have raised profound questions about the financial state of the Republic.

The President’s speech was delicately balanced. It expressed frustration at the country’s ills without pointing anyone out; it focused closely on the future and listed policy goals in order of importance. It also featured a distinct first act as president and a pledge to strengthen the central government, and was more substantive and direct than many past acceptance speeches in Nigeria.

Buhari listed his priorities clearly early on, claiming that, “insecurity, pervasive corruption, the hitherto unending and seemingly impossible fuel and power shortages are the immediate concerns.” The Nigerian economy is deeply affected by all of those issues. According to our interviewees, it is not a lack of resources or opportunity that has restricted foreign investment in Nigeria, but insecurity, corruption, and a lack of electricity. For those interrelated issues, the president proposed solutions.

On stability, his now famous “I belong to everybody and I belong to nobody” quote assured a global audience that his intentions would not be compromised by influence. Later he said, “the past is prologue” and promised not to disrupt the peace in order to settle “old scores.” For business and investment, stability is essential, and Buhari’s continual pledges for national unity are a positive sign.

In what can be read as a concrete intention to promote unity, Buhari also explicitly supported a stronger federal government. “Relations between Abuja and the States have to be clarified…” and “the federal government… will ensure that the gross corruption at the local level is checked.” Federalization was a crucial political step in the evolution of first world democracies. For investors, powerful and corrupt states effectively double the difficulty of doing business in the country, as regulations and webs of patronage are duplicated.

To a remarkable degree, President Buhari turned attention toward the institutions he had just taken control of. He promised to “rebuild and reform the public service,” claimed that Boko Haram was made powerful by “extrajudicial murder at the hands of police,” and explained that the insurgency had risen to power due to “official bungling, negligence, complacency or collusion.” These are strong statements that align with issues commonly sited by investors and businesses.

The public sector actively inhibits business in Nigeria, while the Boko Haram insurgency erupted in an area of scant economic opportunity and brutal repression by government forces. Amnesty International published a report early this month that focused on human rights abuses by the military and highlighted similar issues. Amnesty published a similar report on the Nigerian Police last year that alleged widespread torture and extrajudicial killings. For anyone living and working in Nigeria, unreliable authorities are a major liability, and their presence increases insurance premiums, private security costs, and the overall cost of doing business.

In order to combat Boko Haram, Buhari made one of his first policy moves by relocating the Nigerian military’s command center to Madugari from Abuja. Just after this, he promised to “overhaul the rules of engagement to avoid human rights violations in operations” and to implement “legal mechanisms” to ensure that abusers within the military are punished. If implemented, these would represent distinct steps towards an era of stability.

Just after addressing Boko Haram, the President made a commitment to continue the amnesty programs currently in place in the restive Niger Delta. Considering that the vast majority of the government’s budget and most of the country’s FDI inflows come from the oil industry, stability in the region is key to every other initiative. If the government cannot fund it programs, no progress can be made.

Finally, the President addressed electricity. He called the sector “a national shame”, and deplored that nearly $20bn in investment since 1999 had produced next to no results. He promised that his government was “examining” the best way to bring electricity to Nigerians, but did not comment specifically on the policies of his predecessor. In several interviews in the power sector, investors have claimed that privatization has greatly improved infrastructure, and they all hoped for stability in policy.

If the commitments of this speech can be realized even in part, Nigeria will be a much more attractive destination for investment at the end of President Buhari’s term.

• Mr Loomis is the Country Editor, The Business Year.