Nigeria’s new president vows to deliver economic reboot as he inherits ‘a broken country’

New Nigerian President Bola Ahmed Tinubu faces the tough task of injecting stability into a society and economy in crisis — and reigniting hope in a young population that feels its voice has been ignored for decades.

The 71-year-old was sworn in on Monday as the 16th president of Africa’s most populous nation, and its fifth since the end of three decades of military rule in 1999. He succeeds Muhammadu Buhari, also of the All Progressives Congress (APC) party, who departs with a widely criticized economic record.

Meanwhile, judges are considering a legal petition from opposition leaders, Atiku Abubakar of the Peoples Democratic Party (PDP) and Peter Obi of the Labour Party, alleging fraud and challenging the result of February’s presidential election.

Tinubu inherits an economy saddled with record debt and inflation at an almost two-decade high of more than 22%, along with shortages of foreign exchange reserves and fuel, a severely weakened naira currency, an ailing power supply and declining oil production.

Economic turmoil

As former governor of Lagos state between 1999 and 2007, Tinubu was credited with modernizing Nigeria’s commercial hub and vastly expanding the regional economy.

Touting his record, he vowed at his swearing-in ceremony on Monday to expand the Nigerian economy by at least 6% per year, unify the the foreign exchange rate and scrap costly fuel subsidies, along with tackling widespread insecurity.

“I have a message for our investors, local and foreign: our government shall review all their complaints about multiple taxation and various anti-investment inhibitions,” Tinubu told the audience in Abuja’s Eagle Square, while also promising a “thorough house cleaning” of monetary policy.

His predecessor Buhari deployed a series of protectionist economic policies and spooked international investors. While he claimed in a farewell speech on Sunday that many of the “tough decisions” had boosted the country’s economic resilience, the hard data showed unemployment and poverty expanding.

Nigeria’s National Bureau of Statistics now estimates that 63% of the population, around 133 million people, are now classed as multidimensionally poor, a 10 percentage point increase from before Buhari’s tenure began in 2015. Unemployment sits at 33.3%, amounting to more than 23 million people, having risen steadily over the last eight years.

Samson Itodo, executive director of Nigeria-based civic advocacy organization YIAGA Africa, told CNBC that he expects the country to move past the process of legal challenges with minimal disruption, but that Tinubu’s administration faces multiple obstacles in its first 60 days.

“He is inheriting a broken economy, he is inheriting a broken country, very polarized around religious and ethnic lines, and so there’s a lot of expectation that being the Tinubu that he is, he is going to take on this responsibility, but I do believe Nigeria will pull out of this because of our resilient character,” Itodo said Monday.

Though popular, the decades-old subsidy for petroleum products has been a millstone around the neck of government finances, and several governments have promised but failed to eradicate it since its implementation in the 1970s.

Itodo said the first couple of months of Tinubu’s tenure would be key in restoring economic credibility with an electorate that has endured two recessions in the last eight years, both through delivering on bold campaign promises and appointing “competent people” with the necessary experience.

A country divided

Nigeria has one of the world’s fastest-growing populations — currently near 220 million and forecast to double by 2050. It also has one of the world’s youngest average populations, with 42% of citizens under the age of 15 and a median age of just over 18, the U.N. estimates.

Ahead of February’s election, the Labour Party’s Peter Obi mobilized popular discontent over widespread youth unemployment, lack of opportunity and police brutality to engage vast swathes of young voters who wanted a break from the country’s traditional two big parties, the APC and PDP.

Tinubu won just 37% of the national vote, while only a quarter of Nigeria’s 93 million registered voters managed to cast a ballot in a polling process beset by technical problems. For many disenfranchised Nigerians, he will have a tough task in proving his mettle on both economic and social issues.

Mucahid Durmaz, senior West Africa analyst at risk intelligence firm Verisk Maplecroft, said Tinubu’s presidency will be seen by many disillusioned voters as strengthening the “dominance of the entrenched political elite.”

“Tinubu’s electoral victory has further ingrained the perception among ordinary Nigerians that the political stage is a playground for wealthy old guards who place patronage at the heart of politics,” Durmaz said.

“The extensive clientelist networks and powerful regional brokers behind his victory will likely be rewarded with state positions at national and federal level.”

A key question for the first 100 days in office, Durmaz suggested, will be whether the new leader has the “will and the ability” to reach out to alienated urban youth and minorities.

“Tinubu will need to promote an inclusive national identity in a deeply fractious society and eradicate the grievances felt by the majority of Nigerians on issues such as insecurity, police brutality and inequality,” Durmaz said.

Tinubu vowed to address widespread violence — including killings and kidnappings in the northwest, clashes between cattle herders and farmers in the country’s “Middle Belt” and a combination of separatist and gang-based attacks in the southeast — through sweeping reforms of Nigeria’s security services.

“Nigeria’s over-stretched state security apparatus has a history of grave human rights violations and requires wide structural reforms, comprehensive training programs and modern equipment,” Durmaz said.

“Any improvement in the military must be followed by economic development plans in violence-affected areas to stem the main drivers of insecurity, namely poverty, youth unemployment and the lack of state presence.”