NIGERIA’s new president, Goodluck Jonathan, has had to perform a tough balancing act over the past fortnight. While fielding state visits from the UK Prime Minister David Cameron and German Chancellor Angela Merkel, both with large business delegations seeking investment opportunities, he has had to face off a national public service strike and deal with the growing security threat posed by radical Islamist group Boko Haram in the north of the country. The strike, over issues related to the country’s newly introduced minimum wage obligations, was averted at the eleventh hour but the uncertainty it created still disrupted the nation. The cost to the country of implementing the wage agreement will be considerable but is necessary to deal with security problems linked to growing poverty and the widening gap between rich and the poor. Boko Haram is a product of the marginalisation experienced by many Nigerians.
Among the country’s wealthiest people are the national politicians and legislators who earn more than triple that of their counterparts in western governments but who have so far failed to develop Nigeria from their privileged positions. More than a quarter of the national budget is spent on legislators’ salaries, with a further chunk of money set aside to run 36 state and 774 local governments.
Jonathan, despite the strong mandate he received in this year’s election, is not a seasoned politician and many Nigerians believe he does not have the political spine and strong constituency to deal with the challenges ahead.
Many Nigerians are sceptical that he will be the leader that gets the country to turn the corner. Used to years of state abuse and neglect, they are inclined to believe the fundamental issues undermining the country’s progress are not changing even as the leadership does.
But viewing the situation from the outside, there seem to be many reasons for optimism. While Jonathan appears to be more reserved than most who have gone before him, the signs are that he is restructuring and reforming the country through strategic interventions rather than just loud promises.
While the new cabinet has been criticised for having too few reformers as Jonathan tries to balance ethnic and geographical interests and reward those who got him into power, he has lured former finance minister Ngozi Okonjo Iweala from the World Bank back to the job she held under former president Olusegun Obasanjo. She has a formidable reputation as a tough reformer, a quality which made her unpopular in the Obasanjo government and led to her subsequent retreat to the World Bank.
She has already pledged to trim government spending and is likely to come up against some powerful vested interests in doing so, which will be a challenge for Jonathan, who has declared himself in charge of the economic reform programme.
He has also appointed an experienced entrepreneur into the key, but ailing, power ministry to turn around the sector that has been the biggest brake on economic development.
The Nigerian press announces new measures to reform the economy every day. A plan to register informal sector companies to bring them into the tax net is under way, as is a move to enforce compliance with international accounting standards by January next year, while an audit of all ministries and government agencies has been ordered.
The Nigerian Stock Exchange is also on a new path with new management and an energetic leader, Oscar Onyema, who relinquished a top job on the American stock exchange to take up the challenge of putting the Nigerian stock exchange on a new footing. He has bold plans to raise market capitalisation and find fresh listings from new sources. Encouraging secondary listings of South African companies is on his radar.
Foreign policy has been linked to a new thrust to attract foreign direct investment and take advantage of interest in the country following the successful election.
Every government starts off well and Nigerians have a right to be sceptical at this stage. Decades of entrenched dysfunction need to be tackled. But international investors are positioning themselves for the takeoff of an economic giant operating well below its potential. SA should be watching this space with interest.