President Muhammadu Buhari, the ascetic former military ruler elected on a wave of optimism last year, promised to fix the comatose economy, aside corruption and insecurity challenges.

But down to six quarters in the life of the administration, stakeholders are saying time may be running out on the president to fix the economy which has rather slumped into recession.

An administration typically has 16 quarters, seven of which have now gone, with little economic activity in Nigeria’s context.

“We have had ten months of limited policy activity, this was in the period between May 2015 to Feb 2016, with only liberalisation of exchange rate,” says Bismarck Rewane, chief executive officer of Lagos-based Financial Derivatives Company, (FDC) in the current Lagos Business School Breakfast meeting note released at the week end.

Analysts believe that only six quarters are left for the present administration to deliver on campaign promises, ranging from reducing poverty and curbing unemployment.

The last three quarters, they argue, will be for electioneering, when, “not much can be done,” according to Rewane.

“No political leader has control over time or how history will judge him or her,” says another analyst, who craved anonymity.

Rewane describes the attitude of the present government towards reforms as first beginning with resistance- between May 2015 and June 2016; reluctance- between June to Dec. 2016, and he is unsure of the tilt the administration will take going forward.

“The leadership ideology is unitary instead of federalist,” Rewane says. “And 40 percent of policy makers are rigid.”

Analysts say the kind of traction garnered in the remaining six quarters is particularly crucial to steer the economy clear of a deep depression, which is characterised by full year GDP contraction of between 4-7 percent.

“Your calculations that we are down to six quarters are spot on,” says Tajudeen Ibrahim, head of research at Lagos-based investment firm, Chapel Hill Denham, by phone. “I agree with some of the government policies so far, but the major thing that must be factored in as we progress is acceleration of policies and regular communication of their strategies and plans to the public,” Ibrahim says.

Olawale Olusi of Investment Research at Lagos-based Afrinvest West Africa, says “ It is pertinent to note that the challenges confronting the Nigerian economy are largely structural in nature and by implication will require holistic reforms which are broadly long term.

“We think what the Buhari administration should be more focused on what should be policy frameworks to guide the economy into to an era of sustainable growth through appropriate policy reforms and investment in critical infrastructure,” Olusi added.

A myriad of delayed policies ranging from allowing the naira weaken against the dollar amid thinning petrodollars; to the removal of petroleum subsidy, dragged the economy further down and has made the most of the challenge brought on by low oil prices.

“The options are few, while choices are hard, with the actions daunting,” Rewane says,” further suggesting “immediate action on monetary, fiscal and structural measures.”

On monetary policies, Rewane suggested reduction of interest rates to unlock funds tied to debt servicing; expansion of credit supply from banks by reducing cash reserve ratio (CRR) currently at 25 percent and incentivisation of lending to the real sector.

He also urged the administration to explore sale and repurchase agreement on selected assets, seek funds from multilaterals, export credit agencies and launch of concessionary programmes as fiscal policy options.

The structural policies, according to him, should include “Pro-growth initiatives such as core infrastructure, power and transport networks, and implementation of planned social safety programmes to address impoverished community as well as control security issues.”

The Buhari administration sparked an optimistic outburst in Africa’s most populous country when it came into power last year.

However, since then, Nigeria has slipped into an economic recession, relinquished top positions of Gross Domestic Product (GDP) size and crude production to South Africa and Angola respectively.

All sorts of record lows have emerged, from headline inflation to the naira’s value and unemployment.

The latest record came last week Thursday, when the value of shares traded on the Nigerian Stock Exchange (NSE) touched a five year low of $139 million, presenting the Kenyan Stock Exchange (with $152 million) an opportunity to beat shares traded on the NSE by $13 million dollars.

Other African countries have also been hit by plunging commodity prices, whether it’s metals or agricultural produce such as coffee and cocoa.

Despite oil prices collapse, Nigeria wasn’t even on the list of African countries anticipated to slide into a recession.

The International Monetary Fund (IMF) had forecast GDP growth in excess of 2 percent in Nigeria, but the multilateral body has gone on to revise its outlook thrice, before settling for a 1.7 percent contraction for the full year.

Weak investor confidence and policy uncertainty are the major drivers of the benign outlook.

These two are joined by militancy in the Niger-delta which has driven production to almost half of a budget predication for 2.2 million barrels a day, and has put a lid to government revenue.

“I’m not sure Nigeria can achieve remarkable success in driving economic growth if the private sector is left out. Interest rates are typically low in a country where there is economic recession to aid the companies’ cost of borrowing,” said Ibrahim.

“Nigeria must address the dollar supply side and cut rates if it would revert to growth,” Ibrahim added.

Nigeria’s economy contracted by 0.36 percent and 2.1 in the first and second quarters of 2016 respectively.

•Sourced from Business Day (Nigeria). Photo shows President Buhari.

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