Nigeria has a new president, but will he stay, and would that make a difference?

Nigeria got a new president on May 29, 2023. Or did it? Because with questions about his candidature, academic qualifications, the election results, the integrity of the electoral process, and pretty much every other aspect of February’s presidential election, many people are questioning the apparent rush to make Alhaji Bola Ahmed Tinubu of the All Progressive Congress Party, President of Nigeria.

The good news is that another peaceful transition from one democratic government to the next represents a major achievement in Nigeria. On the downside, ignoring the questions about its legitimacy or otherwise, the new government is saddled with the huge task of steering Nigeria back to economic and financial prominence.

New political instability

Nigeria's socio-economic challenges are daunting, ranging from insecurity and poor infrastructure to poverty and more. And while Nigerians had hoped for improvements under previous administrations, nothing they faced compares with the enormous task awaiting the incoming administration.

Even before it can get to work, the question remains whether the new government is actually the new one. First, litigation has been launched in the Supreme Court. Second, legislation directing that electoral petitions should be resolved within three months has been politicized, leading to the swearing-in of a new president despite the criticism from, among others, the official opposition and the former vice president, and these challenges seem to be widely supported. In fact, many people believe there is a good chance that the court will reject the election results, possibly nullifying the elections, and question the haste to inaugurate a new president with so many issues hanging over the entire election process.

Ongoing self-inflicted wounds

Meanwhile, Nigeria's most immediate and important challenges continue to build, with positives hard to find. One is the entertainment industry, which continues to blossom despite the unfriendly environment. Another is the widely celebrated opening of the Dangote Refinery, which, though a private sector initiative of a successful Nigerian businessman, is viewed by many as one of the most needed injections to stimulate the Nigerian economy. Other sectors, however, have suffered a dip in one form or another.

Many believe that most of the challenges facing Nigeria are self-inflicted and can be overcome. That said. The list of immediate challenges facing the incoming administration is formidable, including the economy, debt, security, and corruption.

The economic challenge

It’s no secret that the Nigerian economy needs more than an overhaul. On May 24, in response to an inflation rate of 24%, the Central Bank of Nigeria increased the interest rate to 18.5%. This has been called a death knell for small businesses, given the break it puts on the micro and macro-economic activities needed to stimulate a dying economy.

The debt challenge

Nigeria, a mono-economy with an over-dependence on oil and the proceeds from oil exports, is reported to have an internal debt profile in excess of NGN77 billion. The concern is that most of the country’s income is used for debt servicing, with barely any reserve applied for infrastructure development. Sadly, there is an ever-growing penchant to continue sourcing loans from international monetary organizations and foreign governments. Oil revenues have also diminished under the impact of theft.

The security challenge

Insecurity also remains a bane as people continue to live in fear regardless of their economic and social status. Abductions have become an evil trade in the country. This includes the kidnapping of over 276 Chibok girls in 2014, 98 of whom are still being held by Boko Haram, despite various ransoms having been paid. There has also been a slew of other kidnappings.

The corruption challenge

Arguably, the epidemic of corruption is the biggest problem in Nigeria, widely affecting the political and ruling class, with no cure in sight.

Business prospects

Nigerian businesses have barely survived in recent years, with many reporting huge losses due to inflation, poor infrastructure, insecurity, or theft. For businesses with an international profile, the lack of foreign exchange (forex) has plagued their operations, leading to increasing defaults in the face of the Central Bank of Nigeria’s continued struggle and failure to meet the needs of cross-border traders.

At the same time, the emergence of a black market has done no good other than to present an avenue for the Nigerian currency to depreciate in parallel markets. This drains the purchasing power of traders and business people and their ability to settle their debts and payment obligations in foreign currencies.

Written by:?Tayo Gaji

*This article is informative and is not to be used as legal, economic, or commercial advice.

Source: Tribune, Federal Public of Nigeria Official Gazette, Al Jazeera, PM News, BBC News I, Bloomberg, Guardian, Trading Economics, NairaMetrics, BBC News II, Premium Times, Amnesty, FXC Intel