Nigeria should tick all the boxes for investors: size; resources; opportunity. But years of underachievement have hampered growth. Can the new administration reverse the trend?
New Nigerian governments generally promise big changes – but are slow to actually implement them. Since coming to power at the end of May, the government of President Bola Tinubu has been quicker to put new policies into practice. Fuel subsidies have been removed, some restrictions on access to foreign currency lifted and plans to boost the tax-take drawn up. The new government should also benefit from some well-timed major infrastructure projects. There is a long way to go, but Abuja has at the very least made a fast start.
The mountain of challenges facing Tinubu when he came to power included a weak naira, a lack of foreign currency, high levels of inflation, continued power supply problems, low oil production, and security difficulties in the Niger Delta and in the north. The new head of state is banking on energising the economy as the foundation of its strategy, aiming to create a more investment-friendly economic environment so that it is investment rather than borrowing that drives job creation.
“The federal government is not in a position to borrow at this time”, said finance minister Olawale Edun at the end of August. At his inauguration on 29 May Tinubu promised to tackle investor complaints over double taxation and anti-investment regulation. On 14 June the Central Bank of Nigeria (CBN) ended the ban on accessing foreign exchange on the official market – and the naira immediately fell 36% against the dollar on that market.