If you wanted to pick a bad time to be Nigeria’s president, you could hardly pick a worse year than 2023. On May 29th, Bola Tinubu, former governor of Lagos State, will be sworn in as President and Commander-in-Chief of Nigeria’s Armed Forces, the crowning achievement of a long political career. The kingmaker has become king. But what he will receive from Muhammadu Buhari is less a crown than a grenade, with the pin pulled out. Tinubu will step into a renovated Aso Villa and a domestic poly-crisis: Nigeria is in the middle of an economic crisis, a security crisis and a human capital crisis, all of which feed off one another in a vicious cycle, compounded by an increasingly volatile global environment. Untying these successive Gordian knots will need significant courage and capacity. There are other issues too. In the presidential election, Tinubu’s APC only won in 12 of 36 states with 36% of the overall vote. His dealings are coming under increasing scrutiny. Both of the major opposition parties are challenging his election victory. This is not a popular president-elect, or party, for that matter. After eight years of the APC, most Nigerians think the country is moving in the wrong direction.   Despite these challenges, Nigeria is the largest economy in Africa by population and GDP and is a country of huge potential in terms of human and natural resources. This potential is captured in the waves made by its young people both inside and outside the country. The challenge for the incoming administration is to restore confidence in the country, which will simultaneously help its popularity. However, because Tinubu is from the same party as Buhari, the window to do that is short to non-existent. There will be no honeymoon. A lot will have to be done in a very short time. The high watermark for doing a lot in a short time is Franklin D. Roosevelt. Prior to his inauguration as America’s president in January 1932, the first 100 days of an administration were not marked with any fanfare. But those were not ordinary times for the United States. Roosevelt took office during the Great Depression, which had begun in 1929. He set about making rapid changes to the social and economic fabric of the country to cope with it. The result was constant engagement with the US Congress which yielded 76 new laws in only 100 days. The term stuck after FDR mentioned it in one of his numerous fireside chats. Since then, the first 100 days became regarded as the period when a new administration set out its stall and took advantage of its goodwill and momentum to make—and begin to make—significant changes. Early momentum through getting quick wins can galvanise support and make further gains easier. Tinubu can follow in the footsteps of FDR (not Yar’Adua) and give himself the best possible chance of defusing this grenade by flying out of the blocks. To do so, he will have to answer five broad questions: The composition of his cabinet, how subsidies will be approached, the administration’s attitude to debt, how insecurity will be addressed and his availability to Nigerians. Since the first step to saving a sinking ship is to have a good crew, the first question is:

The (kitchen) cabinet question

The important signs to look for here are the ratio of technocrats to politicians in the cabinet, the positions each group occupies, and the antecedents of the Chief of Staff. If the Chief of Staff pick is a good one and the technocrats are given influential positions, those will be good signs. A cabinet’s quality—anchored by the Chief of Staff—determines the quality of advice the president will receive. It will signal the administration’s leaning and commitment to genuine reforms. The kitchen cabinet refers to those unofficial advisers who have the president’s ear behind the scenes. The composition of both camps and the motivations of various players is vital, especially as presidential power will be wielded by one means or the other, especially in an instance of a president’s incapacitation. The Obasanjo administration—especially in its second term—empowered the technocrats, as did the Jonathan administration, albeit to a lesser extent. To be successful, the incoming administration will need to give greater weight to the technocrats. Pressure to stuff the cabinet with former governors with poor records in their states will need to be resisted. Critical ministries and positions like Finance, Education, Health, Petroleum, the National Security Adviser, Digital Economy, Trade and Investment and a few others will need to be helmed by those whose track record will command respect both inside and outside the administration. In summary, more Okonjo-Iwealas, and fewer Adebayo Shittus. There is also the challenge of balancing what part of the country gets what. Cabinet appointees have to come from all parts of the country to foster a sense of unity and inclusion. This is impacted by positions outside the cabinet outside the president’s control. For example, the zoning arrangement for legislative positions within the APC has brought a lot of murmurings, with one of the aspirants saying that all three arms of government—executive, legislative and judicial branches—should not be led by Southerners. The problem with that argument is that the Supreme Court is based purely on seniority, and the current Senate President is from the North-East. Said aspirant is from the North-West. Having another Northerner as Senate President would also mean that the top four positions—President, Vice-President, Senate President and Speaker—would be occupied by Muslims, causing even greater annoyance to Christians. Even the best technocrats will be frustrated in the absence of the necessary political cover for key reforms. That’s where the Chief of Staff comes in. The role is vitally important in any administration, standing at the juncture of the president’s interests, the national interest and the interests of those around the administration. The ideal Chief of Staff is an excellent dealmaker who has the total trust of the president, with a proven capacity to weave disparate interests into something approaching cohesion using carrots and sticks. The outgoing cabinet has had its fair share of ruinous personality clashes. Avoiding them altogether and resolving these quickly where they occur will be central to success. Once in place, the new cabinet will have to confront the reality of subsidies and the state of Nigeria’s public finances more broadly.

The subsidies question

The outgoing administration—against all sound advice—has managed to keep the petrol subsidy going despite its ruinous costs. According to NEITI, ₦13.5 trillion was spent on fuel subsidies between 2005 and 2015, with ₦4.9 trillion (36% of that figure) spent between 2015 and 2021. Several deadlines to end the subsidy have been walked back, cynically waiting for the new administration to make the hard decision to end it. The decision can no longer be put off. The incoming administration has pledged to be market-oriented, and removing petrol subsidies will be a strong signal. Nigeria has some of the world’s lowest petrol prices, which means that on top of the drain on the public purse, the subsidy regime has fuelled the smuggling of petrol across the borders to neighbouring countries, artificially inflating domestic consumption figures. There is also the question of how to end the subsidy—all at once or gradually—and whether or not palliatives replace it. This is also important as petrol will likely cost at least ₦500 per litre once subsidies are removed.  It is important to remember that the sudden removal of the subsidy on January 1, 2012, triggered the #OccupyNigeria protests, forcing the Jonathan administration to walk back the increase partially. Another strong signal will be ending the currency subsidy. However ruinous the fuel subsidy cost is, the currency subsidy cost is perhaps more so. The current CBN rate is significantly lower than the parallel market rate, making it a subsidy. This opens up opportunities for arbitrage and round-tripping of foreign currency. Businesses also face the tough choice of competing for scarce forex from the CBN at the subsidised rate, or entering the parallel market and getting it at much higher rates. Indeed, the World Bank estimates the cost of these multiple windows at $144 billion between 2017 and 2021. Last Wednesday, Tinubu left Nigeria yet again for Europe, only two weeks after returning. The press release indicated that, inter alia, he would meet with investors in Europe. This is undoubtedly to increase foreign direct investment (FDI), which has hit record low levels in the last few months. The current foreign exchange regime, with its capital controls and multiple windows—none reflecting market realities—is not conducive to FDI rebounds. A positive sign here will be a big and sustained increase in FDI into the country.