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Buharinomics: What You Can Expect from President Muhamadu Buhari come 29th May, 2015 By

Eke, Chukwuemeka Ifegwu Lecturer & Consultant Economics of Telecommunication, Health and Entrepreneurship ekeemeka@gmail.com; cell:          +234-803-788-9103 +234-809-262-7087 Fixed line:    +234 Department of Economics Faculty of Social Sciences University of Abuja PMB 117 Abuja, Nigeria.

Now that we have a President-Elect in the person of Gen Muhamadu Buhari, and judging from the Nigerian Stock Exchange’s market capitalization, there is wide spread acceptance as the market vital statistics rallied to a 25% surge. Obviously, the market applauds the 28th March, 2015 results. Therefore as the market begins to rally positively, expectations will soar because everything will revolve around the policies and consequences that come along with the winner. One of those consequences will be referred to as "Buharinomics". In this month’s edition I'm going to look at "Buharinomics," or President Buhari’s economics policies as they unfold after the swearing in ceremony come 29th May.

President Buhari Has an Edge Even still at the moment, President - Elect Buhari appears to have a ground swell of good will. Apart from his modest lifestyle, the entire country’s economic infrastructure and pundits appear to be skewed definitively toward the social reforms. Yes, his first sting at the office as a young military officer, portrayed him as a dictator, but going by the recent result, he is deemed a very good candidate for fixing Nigeria. Moreover, turnout for the presidential elections was high. Whatever the national assembly numbers may be, the president's first task will be to fix the massive fiscal leaks that empower the culture of corruption and impunity in Nigeria. If for instance, he embarks upon tax efficiency and socially streamlined spending, "Buharinomics" comes into effect. This challenge will also be hoisted on the national assembly in the months ahead when the 8th session becomes effective. It's also likely that the 8th national assembly will be asked to take pay cuts. President Buhari may make several attempts to raise taxes on the rich, and will an APC majority in the national assembly allow him to succeed? It is also likely that Buhari will close some of the major tax loopholes – for oil and gas, home mortgage interest, state and local taxes. On universal healthcare coverage, Buhari may reform the industry through the regulatory approaches to reflect his own priorities more closely. If the national assembly scales down the reform then he will probably extend it up the income scale, so that middle-income people can take advantage of the program. Spiraling healthcare costs will be controlled by price restrictions on to National Healthcare Insurance Scheme providers. It is highly probable that in four years of the Buhari Presidency, more people will likely be covered by health insurance, but healthcare quality will decline as increasing numbers of providers refuse to accept patients from the expanded NHIS.

Buharinomics and the Nigerian Economy From the Nigerian economy's point of view, the most worrying feature of President Buhari victory is the tight rein it will give to the various sectorial and industrial regulators. With a full set of reformed regulators in place, and President Buhari’s tight regulatory schemes will have a full four years to be implemented. Other possible outcomes include a militarization of the Niger Delta region, ,   that will force increased use of uneconomic technologies, further detailed restrictions on the industry that would prevent players from expanding, and tightly-directed bank lending rules restricting availability of capital. The precise nature of regulatory restrictions in 2015-19 is yet unknown as I write, but their general direction and seriousness is certain under the Buhari presidency. There is some evidence that the entire decline in Nigeria’s productivity growth after 1963 is due to political instability, fiscal leakages, tax loopholes and inefficiency, and corruption. Enthusiastic regulators given full rein could well hamper Nigeria’s competitiveness for decades to come. On the monetary front, President Buhari’s administration will mean Nigeria’ Central Bank and his "soft money" acolytes will be given full rein. For concerns in the productive sector, interest rates will remain unchanged until late 2015, while inflation may get out of control. For investors in Nigeria’s stock market, stocks will be good. Overall, the Nigerian economy will be in a very different place in January 2019 than it was in 2014, with the Nigerian state representing a much larger share in output and exercising considerable control over the rest. Moreover, Nigerians need change, they fought for it and got it