As the current administration sets to wind down its first term in the next three weeks, this report compares the economic performance between the last four years of the Jonathan’s administration (2011-2015), and the first four years of the Buhari’s government (2015-2019) across important economic and business metrics.
Economy Growth: The average GDP growth last four years (2011-2015) of the Jonathan’s administration is 4.8% and this compares to 0.5% average GDP growth during the first four years (2015-2019) of the Buhari’s Administration. The GDP per capita in Nigeria recorded $2,412 in 2018 compared to $2,563 in 2014. It is noted that the current level of 2% growth falls below the current annual population growth rate of 3% and this is a cause for concern due to its wider implications on poverty conditions in the country.

Unemployment: The first four years of the Buhari’s tenure was marked by steady rise of unemployment rate from 8% in 2015 to 23.1% in the third quarter of 2018. This compares to a single digit unemployment rate recorded throughout the last administration. Notably, the number of the unemployed grew from 6 million in Q1-2015 to over 23 million in Q4-2018. With a population of over 90 million people living in extreme poverty, and unemployment rate currently at 23.8% and many employers in both private and public sectors finding it difficult to pay workers’ salaries as at when due, there are causes for concern that unemployment rate will likely exceed 30% in 2020.

Inflation Rate: Year on year inflation rate hovered between 8-13% during years 2011-2015 compared to 8-18.3% it recorded during years 2015-2019. Expectedly, the newly approved monthly minimum wage from N18,000 to N30,000, foreign exchange fluctuations and slower food production due to wide spread security challenge will continue to exert pressure on the price levels.

Foreign Exchange Rate: The years between 2011 and 2015 witnessed relative exchange rate band of N150-165/$. This is compared to the rate of N198-370/$ (across different Fx markets) recorded from 2016 to date. Relative calm has since returned to the forex market largely due to the increased receipts from crude oil sale with average local production levels at about 1.8 million barrels per day and higher oil price in the international market. However, the multiplicity of FX rates in the country with about 15 different rates currently operational and the continued ability of Central Bank of Nigeria (CBN) to defend the local currency remain a source of concern for stakeholders.

Foreign Direct Investment: The total value of Foreign Direct Investment (FDI) between 2011-2014 is 26.3 billion compared to a total of $13.2 billion achieved between 2015 and 2018. It is noted that Nigeria have since lost its position as the top recipient of FDI to other smaller African countries.

Manufacturing Capacity Utilization: The average manufacturing capacity utilization between years 2011-2014 was 58% compared to 54.3% it averaged in years 2015-2018. The inherent challenge of electricity supply to factories remain significant and it is observed that power supply to factories from distribution companies dropped from daily average of 13 hours in 2015 to 7 hours in 2018.

Ease of Doing Business
Nigeria is currently ranked 146 among 190 economies in the World Bank ease of doing business report. This is compared to the 170th position it was ranked in 2014-2015. The improved ranking reflects the effort by the present administration through the Presidential Ease of Doing Business Council (PEBEC) and series of Presidential Executive Orders targeted at improving the business environment. However, it is believed that the Nigerian Government still have enormous task ahead to foster an environment where entrepreneurs, small and medium enterprises can thrive.

Debt Profile
Figures from the Debt Management Office (DMO) show that Jonathan’s administration grew the country’s total debt stock between 2011 and 2015 by over 100% from N5.6 trillion to N12.1 trillion. In the same trend, the present administration also increased the debt level to N24.3 trillion ($79.4 billion) as at December 30, 2018. This represents approximately 100% rise over years 2015-2018. It is essential to note that debt service to revenue ratio which currently stand at over 40% is too high because of its adverse implication on the country’s ability to deliver infrastructure investments and ability repay the principal.

Incidence of Corruption
Nigeria scored 27 points out of 100 on the 2018 Corruption Perceptions Index reported by Transparency International. Corruption Index in Nigeria averaged 25.5 Points from 2011 to 2015 and reached an all time high of 28 Points in 2016. According to the report, Nigeria is currently the 144 least corrupt nation out of 175 countries in the world. It is observed that anti-corruption effort of the current administration is yet to yield desired output and impact on the economy.

In Conclusion, Buhari’s influence on the overall economy seem to have been limited largely by factors such as relatively lower oil prices, currency devaluation and absence of prominent reform in key sectors. Notably, the president declined to sign 30 private sector/industry reform related Bills passed by the National Assembly between mid-2015 and May 2019. Moreover, there is evidence that policies of expanded tax revenue, sustenance of fuel subsidy, “social cash transfers” and war against corruption are yet to push most economic metrics in a more favorable direction. Thus, we look forward to what is on offer for the economy in the “Next Level” administration beginning from May 29, 2019.

Sources of Data for this report: National Bureau of Statistics (NBS) GDP, inflation and Employment Reports; World Bank Ease of Doing Business Reports; National Debt Management Office; Transparency International and Central Bank of Nigeria (CBN).

Sources of Data for this report: National Bureau of Statistics (NBS) GDP, inflation and Employment Reports; World Bank Ease of Doing Business Reports; National Debt Management Office; Transparency International and Central Bank of Nigeria (CBN).

Dr. Vincent Nwani is an Economist/ Business & Investment Consultant. For feedback:  08033827944, email: [email protected]