Nigeria’s outgoing President Muhammadu Buhari said his successor will inherit a far more resilient economy thanks to investments in infrastructure and policies that have bolstered local production.
Under his watch, the government has recovered hundreds of millions of dollars in stolen state funds, built new transport links and beaten back militant group Boko Haram, Buhari said in written responses to Bloomberg News questions. With Russia’s war on Ukraine disrupting global supply chains, the government’s support for its farmers and manufacturers has been vindicated, he said.
“We leave Nigeria in a far better place than we found it,” said Buhari, 80, who is due to step down after February elections.
The former army general’s glowing self-assessment contrasts starkly with that of critics, who point to a struggling economy, spiralling state debt and rampant unemployment. Gross domestic product has contracted in two of the past seven years and is now about 10% smaller in dollar terms than when he took office in 2015, International Monetary Fund data show.
While Buhari said the military has recovered all territory previously held by Boko Haram, the International Crisis Group warned in a March report that a splinter organization known as the Islamic State West Africa Province has expanded its presence in rural areas of the northeastern Borno state and intensified attacks on the army. Violence has also spread in other parts of the country, with armed groups frequently carrying out mass abductions and killings.
Buhari defended Godwin Emefiele, the central bank governor, who sparked a furor last month when he asked a federal court to rule that he be allowed to run for president while keeping his current position. Emefiele’s brief foray into party politics — which Buhari effectively ended with a presidential order — deepened existing concerns about his independence and amplified calls for his removal.
“Because the governor follows a model outside of the economic orthodoxy, he is labeled political. But the orthodoxy has proved wrong time and again,” Buhari said. “The governor is following an alternative economic model that put people at the heart of policy. Nigerians should be free to choose its development model and how to construct our economy so it functions for Nigerians.”
The country has multiple exchange rates, subsidizes fuel and taps the Central Bank of Nigeria to help finance its budget deficit. The bank has also been a mainstay of the government’s efforts to boost local production, providing loans to farmers and restricting access to foreign exchange for importers of dozens of products ranging from milk to cement. The authorities have sought to limit the quantity of rice and other goods that enter the country.
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Annual production of both milled rice and corn — key staples — has risen more than 50% since 2015, US Department of Agriculture data show. While it estimated in a report in April that Nigeria still ships in 2.2 million tons a year to meet rising demand among its more than 200 million people, Buhari said rice imports “have fallen to near zero.”
The government’s interventions in the farming industry haven’t eased price pressures as the conflict in Ukraine disrupts shipments and international markets. Food costs in Nigeria rose more than 30% in the year to April and have continued to escalate since then.
“We can only imagine what food inflation would be today had we not initiated organised programs,” Buhari said. “We are making progress.”
After declining to endorse a preferred successor as candidates vied for the ruling All Progressives Congress party’s presidential nomination, Buhari backed the eventual winner, Bola Tinubu. The former governor of Lagos state’s main challenger will be Atiku Abubakar, a former vice president, who will represent the main opposition Peoples Democratic Party. Besides rising living costs, ballooning debt-service payments and insecurity are among the key election issues.
Nigeria’s total public debt has more than tripled to 41.6 trillion naira (about $100 billion) since Buhari took office and servicing it consumes almost all of government revenue.
A “narrow focus on debt misses the point,” Buhari said. Borrowing is used to address “Nigeria’s longstanding infrastructure deficit by constructing a foundation for sustainable growth” and spreading opportunities around the country, a lack of which have contributed to insecurity in the past, he said.
- Generating more tax revenue is “challenging”, he said, and the government must find ways to draw the roughly 80% of the population who work in the informal economy into the net. Nigeria’s 6% tax-to-GDP ratio is among the world’s lowest.
- “International trade remains rigged against food security in Africa. The European Union’s policies in particular are all rhetoric of open trade, yet their Common
- Agricultural Policy subsidy programs and export of those subsidized goods create dependence, undermine Africa’s self-sufficiency, and cause food poverty and starvation.”
- The government set plans in motion last year to remove gasoline subsidies that cost billions of dollars annually, but those have become untenable as crude prices have risen, he said. Significant local refining capacity that will come online this year and next should help limit shocks stemming from price increases and changes in the exchange rate.