It took South African President Cyril Ramaphosa only 96 hours to constitute his ministerial cabinet after he was sworn in for his first full term on May 25, 2019. Ramaphosa was first elected unopposed as President of South Africa by the National Assembly on February 15, 2018 after President Jacob Zuma’s resignation. He was again elected by the National Assembly on May 22, 2019 for his first full term following the ANC’s victory in the 2019 South African general election.
This is, however, not the case for Africa’s biggest economy as nine days after President Muhammadu Buhari’s inauguration, Nigerians and the business community are still waiting for the ministerial list to be sent to the Senate for screening and approval. President Buhari was sworn in on May 29 for a second four-year term after defeating the candidate of the main opposition People’s Democratic Party (PDP), Atiku Abubakar, to emerge victorious in the February 23 presidential election. Even though expectations are subdued following Buhari’s less-than-spectacular performance in his first term, many had believed that the 76-year old president would break from the past by quickly constituting his ministerial team this time around. This, however, has yet to happen, with dire consequences for the economy.
“A delay in the formation of a cabinet would leave investors scratching their heads as they won’t have a clear-cut idea on the policy direction of the fiscal authority for the economy,” said Gbolahan Ologunro, equity research analyst at Lagos-based CSL Stockbrokers. “Growth in Nigeria is still very much in its fragile state, thus the country would need more of the private sector to help drive growth above the 3 percent population growth rate and curb down on its high unemployment rate that is currently above 23 percent,” Ologunro told BusinessDay on the phone. Recall that after he was sworn into office in 2015, it took President Buhari over six months to constitute a cabinet to drive the policies in the Economic Recovery and Growth Plan (ERGP) of government. That delay, among other factors, conspired to drag the country into a lengthy recession that crippled the oil-dependent nation. Ologunro explained that actions like the formation of ministerial cabinet send signals to the market, either positively or negatively depending on how the market perceives it. In South Africa, for instance, the rand reacted positively immediately after 66-year old Ramaphosa named his ministerial cabinet, gaining some 0.5 percent against the dollar after an initial loss of 1 percent prior to the announcement. Like Nigeria, the South African economy witnessed a turbulent time owing to alleged bad governance and mismanagement under Jacob Zuma. But markets rallied strongly the day after Ramaphosa assumed the Presidency in 2018, with stocks rising and the rand reaching its firmest since early 2015. Government bonds also increased in strength.
Nigeria is still very much in a fragile state after it managed to limp 2.2 percent in the third quarter of 2018 after three quarters of negative growth (recession), thanks to growth recorded in the country’s agricultural, manufacturing and transportation sector. For Ramaphosa, the timely constitution of cabinet would fast-track the process through which his administration aims to revitalise the economy while exercising the greatest care in the use of public funds. Aside from the prompt appointment of ministers, the South African president cut down on his ministerial appointees from 36 to 28 in order to cushion the effect of a ballooning cost on the government. “The cut in the cabinet is a significant move of downscaling our state. Many people believed our government was bloated and this was agreed right across the board. All South Africans are acutely aware of the great economic difficulties our country has been experiencing,” Ramaphosa said while delivering a speech at the swearing-in ceremony.
His cabinet is also devoid of gender bias as it comprises 14 men and 14 women. Analysts say President Buhari can learn from this as Nigerians await his ministerial list. Even though Nigeria is battling with a huge cost burden, the country’s leadership is not showing any signs of planning to cut down on the size of its cabinet or its ambiguous and duplicated ministries, departments and agencies (MDAs). Rather, it is even planning on adding more. In a statement made in 2017, President Buhari claimed he had been working with a “trimmed cabinet to avoid waste” but that he would soon shift ground in response to his party’s demand. The country currently has 35 ministers, with 13 of them being ministers of state. Buhari is the substantive minister of petroleum. With a ministerial list of 35 members, Africa’s biggest oil producer plans to spend as much as N4 trillion on recurrent expenditure and N2.03 trillion servicing its debt in 2019. An expansion of the cabinet system could mean higher cost burden on the cash-strapped economy, according to analysts who spoke to BusinessDay.
MICHAEL ANI
