President Buhari presented his budget for 2016 to Nigeria and analysts continue to have high expectations regarding the breakdown of this plan. In the meantime, the budget, which will seemingly address all of Nigeria’s problems, is based on an oil benchmark price of $38, making it somewhat of a fool’s errand.
However, oil prices and Boko Haram are just two of many big issues Nigeria will be facing this year. Here are some of the critical issues that need to be addressed in 2016:
1. Petroleum pricing
Nigeria’s 2016 budget has an oil benchmark of $38 on which it would be executed. That number is set to be lowered now that analysts have predicted that oil prices will still go lower in 2016. The global fall in the price of oil has affected the Nigerian economy in a very big way. For an economy where 70 percent of its revenue is gotten from oil, this problem is not likely to ease soon. Nigeria’s borrowing could increase, while the naira is set to further weaken this year. Nigerians look on to see how President Buhari’s finance team solves the problem.
2. Power supply
Nigeria’s epileptic power supply is a big issue that has affected and stalled the growth of many other sectors in the Nigerian economy. Already, the new Minister for Power, Works and Housing, Babatunde Fashola, has made plans concerning how to revive it. It however remains to be seen if he can achieve his goals before the end of his tenure.
3. Boko Haram insurgency and IDP relocation
President Buhari promised to end the Boko Haram insurgency by December 2015, a promise he communicated to the top brass of the army. However, it is now January, 2016 and bombings perpetrated by the terrorist group have not stopped. Ventures Africa spoke to Dr. Joseph Bolarinwa, an expert in Defense Studies and a Research Fellow at the Nigerian Institute of International Affairs, Lagos, Nigeria. He provided a candid view of the insurgency so far. “They are inside the forest now or scattered. Though they have bombings here and there, it’s a testament to their failing strength. Then the international community is assisting Nigeria in the war. The British army is currently training the Nigerian army on how to tackle an insurgency. So, between June 2016 and December 2016, we should be expecting an end to the problem and then people can return home.”
The new administration’s resolve to end corruption in Nigeria has given the people a slither of hope. Already, the country’s foremost agency in the fight against corruption, the EFCC, has been picking up high profile names implicated in a fraud case in the last administration. Many Nigerians hope that these people stand trial and the guilty ones be convicted, a process that has eluded the EFCC for some time.
5. Foreign exchange and Nigeria’s currency
Nigeria’s currency, right now, is free-falling as global oil prices reduce and its foreign reserves become depleted. The Central Bank of Nigeria has been unable to halt the foreign exchange rate and its easing and the ban placed on forex shows its helplessness. The Naira will continue to rise, but the extent to its rising can only be determined by the CBN.