Nigerians and the global business community should expect no change of policies from a re-elected President Muhammadu Buhari, analysts at two leading investment bank and asset management firms said in their independent projections.
The analysts, however, voted for a faster pace of policy implementation.
The outlook for the economy over the next four years would be positive but modest as President Buhari’s victory signals policy stability, said research analysts at United Capital, an investment banking and asset management firm.
Buhari, 76, was last Wednesday announced winner of the February 23, 2019 presidential election by the Independent National Electoral Commission (INEC).
Nigeria’s incumbent president and candidate of the All Progressives Congress (APC), Buhari defeated his main challenger, former Vice President Atiku Abubakar of the People’s Democratic Party (PDP), with 56 percent to 41 percent of total valid votes cast.
Atiku has, however, rejected the result, describing the election as a “sham” and debasement of democracy and vowing to challenge the result in court.
“The Buhari administration will continue to invest in infrastructure, sustain its welfare scheme, reinforce the drive to substitute imports with local production, and retain its intervention programmes across the agric, power and the SMEs space by building on its Economic Recovery and Growth Plan (ERGP),” United Capital analysts said.
“As such, we expect the budget to remain large, broadly financed by borrowings. However, the role of the private sector may be limited by the absence of far-reaching liberal policies. This may keep investment low and output growth soft,” they said.
Analysts at Lagos-based FBNQuest said in a February 28 note to clients that they expect “more of the same policies, although hopefully at a faster pace of implementation”.
Buhari was sworn into office in May 2015 after defeating then President Goodluck Jonathan to emerge president of Africa’s most populous country.
While Buhari spent about six months to form a cabinet to kick-start his government, it took him one year later to craft brilliant policy ideas that formed part of the government’s Economic and Recovery Growth Plan.
The aftermath of this delay was an acute dollar shortage, spiralling inflation and a devaluation of the naira that stemmed from a 2014 crash in global oil prices and agitations in the Niger Delta region that pushed the country into its first recession in 27 years – a crisis most analysts say Africa’s largest economy could have averted if it had effectively implemented the right policies instead of the delay.
“The leopard is not expected to change its spots. A Buhari administration tends to over-centralise decision-making and has a policy stance that is caricatured as ‘pro-poor’. It is not anti-business, rather at times wary of it,” FBNQuest analysts wrote.
The country exited recession in the second quarter of 2017 after expanding 0.72 percent, thanks to a pick-up in oil prices and the calmness seen in the Niger Delta region.
“Unlike in 2015, President Buhari should be able to move fairly quickly to forming a new government since most likely candidates for posts have been vetted,” the analysts said.
Apart from a delay in constituting a cabinet to pilot affairs, there was also a seven-month delay in the signing of the 2018 budget due to a standoff between the Bukola Saraki-led legislature and the executive. The budget currently holds the record of being Nigeria’s most delayed ever.
However, with Saraki losing his senatorial seat, the analysts “expect signs that the new administration is able to translate its healthy majorities in both houses of the National Assembly into a positive working relationship with the legislature”.
“If it is, we can look forward to smoother passage of the annual budgets and perhaps some progress on the petroleum industry bill. If it is not, we return to the institutional logjam of the first term,” they said.
Despite the delay, Buhari made some remarkable stride in revitalising the dilapidated infrastructure that has enveloped Nigeria’s landscape over time.
This “being his second and final term in office, Buhari has an opportunity to create a bit of legacy”, FBNQuest analysts said.
“This suggests a further acceleration of the FGN’s capital releases for infrastructure, and of its social interventions (such as TraderMoni, the N-power programme, the conditional cash transfers and the school feeding project,” the analysts said.
“We met a large number of foreign portfolio investors earlier in the year, and the majority anticipated Buhari’s re-election. Any post-election rally on the NSE is, therefore, likely to be based upon relief that the process is over and that the FGN can revert to pursuing its policy agenda,” they said.
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