Two days ago, Nigeria’s President, Goodluck Jonathan, made his case for re-election, but the judgement of the content of his speech – through a business lens – will leave foreign and local investors ambivalent towards the continuation of his presidency.
The Nigerian president titled his Declaration speech “Why I Deserve Another Term;” here are five reasons it will give investors mixed feelings about supporting him.
Security
With heightened terror in north-eastern Nigeria preceding Jonathan’s declaration for second term, everyone waited for his plans to return the country to peace and security. If anything, the president’s statement on security left much to be desired, not least for foreign and local investors whose key business attraction is socio-politically stable society.
He may have begun his speech with a one-minute silence, but his attention to the security challenges plaguing the country outlast a minute or a paragraph. With Nigerians still in mourning, after a bomb blast in Yobe State killed close to 50 students a day earlier, Jonathan would have best soothed the nation’s grief if he had highlighted detailed concrete measures his government is taking to completely curb this menace. Instead, he fell back to the usual line of; “We are equipping the armed forces and deploying Special Forces to engage the terrorist and end this senseless war. We must protect our country. We must save our people…”
In total, Jonathan spent 304 words talking about Nigeria’s security challenge in a lengthy speech of 5039 words. Ironically, only once did he mentioned the schoolgirls from Chibok whose kidnap over 200 days ago coupled sparked a worldwide #BringBackOurGirls campaign.
Not only did Jonathan’s bland and brief words on security betray the expectation of ordinary Nigerians, it depicted his government as nonchalant and bereft of incisive ideas to bring peace and stability to the north. The notion of a security inept government is extremely harmful to the nation’s business climate, and Jonathan’s speech gave just that impression.
Corruption
Jonathan also gave little or no attention to critical investment hurdles like corruption, bureaucratic bottlenecks and the kickbacks for contracts that pervade government institutions. As in the case of security, the president merely brushed through his government’s fight against corruption.
Again, given that his government’s fight against corruption has not been prolific, Jonathan’s words did not signify any rise in momentum to curb corruption by public officials.
He also came off as disinterested in fixing the many system-related bottlenecks to the ease of doing business. Nigeria is continually rated low in investment friendliness and ease of doing business, majorly contributed to by the sluggish operation of government institutions and expectation of kickbacks by public service workers. Jonathan did not say anything about what was in process or would be done differently; the idea of a continuation of these bottlenecks is frightening, particularly to foreign investors who often take the words of pessimistic foreign ratings agencies to heart.
Jonathan’s decision avoid tabling how his government will manage the current oil price crisis was also very shocking. Oil revenue is not only Nigeria’s main source of revenue, the country’s foreign exchange is dependent on it, as are most of the fast growing sectors of Nigeria’s economy.
Without oil revenue above Nigeria’s budget benchmark, sustaining the country’s economic growth becomes a tougher task; Jonathan did not give investors any idea on how he plans to keep the economy attractive should this crisis persist. Falling oil prices also bring along a potential for social unrest with job cuts and reduction of government funding the often-used contingency plans. Speculation of the troubles the oil price drop will cause Nigeria is already affecting the economy, yet Jonathan failed to use his Declaration speech the palliate investors’ fears.
Despite these worries, economic statistics play in President Jonathan’s favour and should encourage most investors to overlook a flat speech and sink more capital into one of the world’s most profitable markets.
Nigeria’s Economic Growth
Economics could prove to be Jonathan’s good luck charm; little wonder he rushed through his flaws, like in security, to get here. The under-scrutiny president did a good job of directing the spotlight on himself to Nigeria’s economic growth under his government. Even if he had not spent over 4000 words rehashing his government’s economic performance, it is an established fact that Nigeria’s economy has grown and opened more under his presidency. His government’s landmark rebasing of the country’s GDP has boosted the investment attractiveness of Nigeria, the country is now the top destination for Foreign Direct Investment in Africa.
Jonathan also made key gains in inspiring public private partnerships. His liberalization of Power has, despite a few hiccups, given Nigerians a future to look towards to. The possibility of steady power supply. Key reforms in institutions like Nigeria Exports Import Bank (NEXIM) and policy implementations like the National Automotive Policy amongst others have aided the growth of local industries.
Good Numbers
A lot of good figures also stack up for Goodluck Jonathan. Under his presidency, Nigeria became Africa’s largest economy and has maintained an average economic growth rate of 6 percent. Several sectors like agriculture, ICT, commerce, financial services are rapidly growing, and better still, most of them are driven by the private sector.
Nigeria has one of the fastest growing middle class in the world, albeit many will scorn at the overwhelming majority that remain poor, as well as the gulf of space between them and the few rich. The country’s capital market received $4.7 billion of the FDI inflow in 2013, a 56 percent contribution to the total market participation, making it the second fastest growing bourse on the continent with 33 percent.
Thus, despite the worries that the lapses of Jonathan’s presidency will continue, both foreign and local investors could prefer to keep him thanks to the many business attractions that his governance has enabled.
