Buhari’s approval rating falls on failure to tackle sliding economy

As the fortunes of Nigeria, the largest economy in the African sub-region, continues to nose-dive on account of dwindling revenue from oil and conflicting fiscal and monetary policy measures, President Muhammadu Buhari’s approval ratings have slipped for the first time in months, according to a Governance Advancement Initiative for Nigeria, (GAIN) poll.

The monthly poll, tracking the performance of governments at all levels in Nigeria, and providing feedback from the public to their elected officials, said the report showed more Nigerians for the first time since last December, scored Buhari low on jobs, economy, and power.

BusinessDay findings showed that power output has reduced considerably, with majority of Nigerians experiencing darkness for the last three weeks, while government  continues to issue unending explanations on the much awaited welfare scheme for the poorest and most vulnerable, the conditional cash transfer (CCT).

Bismarck Rewane, chief executive, Financial Derivatives Company, (FDC) in the current Lagos Business School Breakfast meeting note, admitted that naira volatility undermined the economic stability for last month, with the likely attendant rise in inflation rate.

“The naira has oscillated like a swinging pendulum in February. After going as low as N405/$, it has recovered to N320/$ this week. Investors, traders and manufactures are jittery as to if and when an official currency adjustment is likely to happen. At the official window, the CBN is publishing a list of beneficiaries of IFEM, but the market remains wary.

“The inflationary impact of a weaker naira has taken its toll on the economy. We expect a sharp increase in inflation with a best case scenario of 9.8% or worst case of 10.2 percent.”

The poll’s report is contrary to the earlier months polls’ which saw majority of respondents blaming former president Goodluck Jonathan for the country’s current economic woes that are impoverishing Nigerians more severely day by day.

However, the trend shifted significantly last month, as the nation’s economic crisis bit harder, in what the poll coordinators said suggested the president’s “honey moon” might have ended.

“The survey was administered using electronic media between February 22nd and 29th, 2016. A total of 757 complete responses were received. The survey results have a 4% margin of error at a 95% confidence level,” said Malcolm Fabiyi, one of the poll’s coordinators, who previously served as a visiting professor at the Lagos Business School.

The result specifically showed that Buhari’s approval rating dropped from 63.4 percent in January to 32.8 percent and more Nigerians held the president responsible for the struggling economy for the first time.

The president scored low on jobs, economy, power, and rule of law. A huge 79 per cent of respondents rated government’s handling of recurring clashes between herdsmen and farmers as poor.

The poll also found that the Nigerian Senate maintained the lowest approval rating of all governmental institutions. The army was the highest rated national institution.

Respondents also rated Ibeh Kachikwu, the minister of state for petroleum, as Nigeria’s best minister so far.

Taking last month in retrospect, Rewane said that “the naira took the brunt of a St. Valentines day massacre, losing as much as N80 (23.7%) against the U.S.$ in 7 days. After a choreographed sequence of steps by the anti-devaluation lobby, including a circus styled devaluation debate.

“The market punished the naira and the CBN, shredding it to N405/$, forcing the CBN to make an explicit announcement on the eligibility of school fees and medical bills in the IFEM. President Buhari has since insisted that school fees should not be eligible.”

Bolade Agbola, executive director, cashcraft asset management limited, who also admitted that Buhari may have lost on the economic front, said recently that “We lost the opportunity to gradually depreciate the naira in line with our dwindling oil earnings and systematically align the economy with the prevailing foreign exchange earnings  reality.

“With the parallel market at almost N400 to the dollar we, will need a combination of capital controls and a sharp devaluation,  to achieve some equilibrium in the foreign exchange market.

“We are in between the devil and the deep blue sea. Cost of goods is bound to rise whether we devalue or not , as no importer, no matter  how patriotic or it’s source of foreign exchange, will not price his goods at the prevailing parallel market rate, which is the most foresee-able replacement cost. That is why inflation has to be on a steep rise and labour agitation for wage increase  soon is inevitable.

“The most viable solution to this economic logjam  is to allow price to distribute the bulk of the pains of our dwindling oil fortunes .It is the rich that consumes the bulk of our foreign exchange, either through consumption of luxury goods, medical treatment, holiday abroad or payment of children’s school fees abroad. Right pricing of dollar purchase will hurt all but the rich more.Both the rich and poor will have to pay more for fuel and contend with reduction of real wage rate and escalation in inflationary trend.”

John Omachonu