Buhari’s Rigid Leadership Style Is Making Nigeria’s Economic Problems Harder To Solve- Bloomberg

In an article titled “Nigeria’s Economy needs Visionary Leadership”, International business website, Bloomberg, said President Buhari’s rigid leadership style is making Nigeria’s economic problems harder to solve. Read the article which was published today below.

Africa and the world cannot afford a failing economy in the continent’s most populous nation. Yet that is exactly what Nigeria might be getting: Its economy is on track to shrink by1.7 percent this year, the official unemployment rate has more than doubled over the last two years, and inflation is at an 11-year high.

One concrete step President Muhammadu Buhari could take to address the crisis would be to eliminate the country’s disastrous foreign exchange controls. Instead, Buhari has made no secret of his desire to defend Nigeria’s currency.

And the central bank has mostly gone along. Despite allowingthe devaluation of the naira in June, it is continuing to manipulate the exchange rate — discouraging foreign investors, creating a crippling shortage of dollars for businesses that need to import, and feeding a currency black market. To keep down the street price of vanishing dollars, Buhari’s government hasarrested informal money-changers. More capital controls are in the works.

Dismantling Nigeria’s foreign exchange controls will doubtless cause at least a short-term rise in inflation. Yet doing so will not only draw foreign investment and make the economy more productive and competitive, but also cut off a conduit for corruption. Buhari can cushion the blow for Nigeria’s poor through targeted cash payments — an approach Nigeria has used in electronically delivering subsidies to poor farmers. That same mechanism could also shield the poor from the regressive impact of an increase in Nigeria’s value-added tax — which is relatively low but a potentially valuable source of additional government revenue.