Nigeria—Economic prospects remain dim despite a Buhari win

President Muhammed Buhari has secured a second term after winning 56% of the vote in February elections. But lifting Africa’s largest economy out of malaise will require a concerted effort. Granted President Buhari’s first term coincided with a sharp correction in oil prices and disruptive insurgency from terrorist group Boko Haram in the North. But a lack of meaningful economic reform has contributed to shrinking average incomes—with GDP growth unable to keep pace with the expanding population. Nigeria now has the largest number of people living in extreme poverty after it surpassed India last year, while unemployment remains above 20%. The government’s balance sheet has deteriorated with debt doubling over the last five years, while the once healthy current account surplus has shrunk. Corruption also appears to be getting worse relative to other countries (Table). These performance metrics suggest the economic outlook will remain challenging. Markets seem to agree, with risk premiums on Nigerian debt little changed after the election.

Fig 6 Nigeria Under Buhari