In March 2015, President Muhammadu Buhari, a 72-year-old former military ruler, won a historic election in Africa’s most populous nation and number one oil producer. Six months later, he finally announced his new cabinet (11 November), ending a period of political uncertainty and speculation. Buhari is pursuing bold anti-corruption and cost-cutting measures, as promised during his campaign. Indeed, the number of ministers has been trimmed from around 42 to 25, lessening overlap and conflicting responsibilities. State agencies underpinning patronage systems have also been shaken up under the new management.

Impact on country risk

The level of experience in the new cabinet is mixed, but by appointing some of the most qualified technocrat-politicians, President Buhari has nonetheless managed to appease the fear of a fallback into autocratic tendencies. Nevertheless, he is likely to keep a strong grip on government, not least by retaining the post of oil minister. The “war” on corruption has already gathered pace over the last few months with a number of prosecutions and investigations in a bid to finally tackle the biggest barrier to investing in Nigeria. Nevertheless, the culture of patronage politics and clientelist networks is deeply entrenched and will take time to eradicate. In addition, it remains to be seen whether the new government can meet sky-high expectations with regard to security issues (Boko Haram) and economic diversification to tackle the huge losses since the oil price collapse. The sharp fall in export revenues and subsequent pressure on the local currency (naira) prompted the introduction of several protectionist measures to artificially stabilise the naira and foster domestic industrial development. The new finance minister seems unlikely to deviate from this unorthodox policy choice despite the distorting impact of foreign-exchange controls. On the other hand, an upsurge in public spending in infrastructure, agriculture and mining will be the new government’s strategy to counter economic slowdown. With sufficient borrowing space left, higher public debt liabilities should not cause insolvency in the years to come.

Analyst: Louise Van Cauwenbergh, l.vancauwenbergh@credendogroup.com