After nearly six months of waiting and jittery investors second guessing the competence of Nigeria’s new President Muhammadu Buhari for not putting in place a cabinet soon after he was inaugurated in May, Africa’s largest economy has a got 36 ministers.
Though the cabinet team Buhari announced on Wednesday was as expected, and leaner than the 42 ministers his predecessor Goodluck Jonathan had, it was not short of surprises for the markets.
Buhari named former investment banker, Kemi Adeosun, 48, to the key position of finance minister at a time the Nigerian economy has been hammered by falling oil prices and has left the west African nation struggling to meet some of its recurrent obligations.
Adeosun, A UK-trained accountant who served as a commissioner of finance in the south western state of Ogun where she helped to raise taxes and improve the state finances, was an unexpected choice for the finance ministry.
According to the Financial Times, many local business pundits were speculating that Buhari will settle on Okey Enelemah, a former Goldman Sachs banker who’s now the founder and chief executive of a Lagos-based private equity firm — African Capital Alliance, as the next finance minister.
Enelamah was named minister for industry, trade and investment.
Adeosun’s support for the central bank’s foreign-exchange restrictions and dismal of a currency devaluation to solve the country’s currency owes does not sit well with many investors.
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“Adeosun’s seeming endorsement of current FX policy choices during her senate testimony will disappoint investors who had been hoping for more rapid liberalization of Nigeria’s FX market,” Razia Khan, chief Africa economist at Standard Chartered Bank, told Bloomberg.
But not everybody is skeptical of Adeosuns appointment.
Bismarck Rewane, head of Lagos-based consultancy firm Financial Derivatives Co., told Bloomberg that Adeosun’s appointment was an “excellent choice”.
“Ogun state was in shambles, she put the state finances in strong position,” Rewane said. “She did a remarkable thing taking the state revenue from a negative position to a positive level.”
During her four year stint as the commissioner of finance in Ogun’s government, U.K.-born Adeosun was an investment banker with Lagos-based Chapel Hill Denham Ltd. and an accountant at auditing and consultancy firm PricewaterhouseCoopers LLP.
While her work in strengthening the state of finances in Ogun State is good credential for the finance minister position, some feel that it is not enough for her to lead the country’s in raising financial debt from the international markets if the need arise.
Nigeria, which has come under immense pressure from IMF to devalue its currency, is expected to increase its spending next year despite a fall in revenue from oil export due to lower international prices.
“The early indications out of the (Nigerian) administration suggest that the 2016 budget may grow to about $35 billion, from $22 billion last year,” Phillippe de Pontet, an analyst at Eurasia Group predicts.
This means more borrowing from both domestic and international market.
Malte Liewerscheidt, senior Africa analyst at Verisk Maplecroft, told Forbes that “Adeosun’s appointment to head the most important ministry during a time of economic crisis will stir some controversy. She is relatively inexperienced, especially compared to her immediate predecessor Ngozi Okonjo-Iweala, a political heavyweight.”