Buhari secures China deals but currency woes linger

President Muhammadu Buhari last week assembled one of the biggest ministerial delegations of his presidency and boarded a plane to China.

Welcomed by President Xi Jinping with a 21-gun salute, Buhari embarked on a five-day tour that saw him return to Nigeria smiling after securing a $6 billion (5.3 billion euro) loan and a currency swap deal.

Buhari has been to more than 20 countries since taking office in May last year, when he embarked on a mission to secure funds for an expansionary budget to kick-start the flagging economy.

His frequent trips abroad and more than 200 hours in the air have earned him a nickname — “Waka Waka Buhari”, Nigerian pidgin for “always away”.

Chinese financing may have secured a temporary economic salve for a country hit hard by the global fall in oil prices since mid-2014. But analysts say they would have instead favoured a deal with the International Monetary Fund (IMF) that could have seen a controversial currency peg abandoned and the foreign exchange market liberalised.

“Depending on how much Nigeria can raise from panda bonds — yuan-dominated debt — and other multilateral organisations, the need for an IMF bailout may decline,” Cobus de Hart, economist at NKC African Economics in South Africa, told AFP. “That said, we would have preferred the IMF’s involvement.”

In January, IMF managing director Christine Lagarde visited Nigeria and maintained neither she nor her team had come “to negotiate a loan”. Since then, however, she has urged Africa’s largest economy to abandon its strict currency controls and to seek “help from the international institutions”.

Reflecting international pessimism, earlier this month the Washington-based organisation downgraded its forecast for Nigeria from 4.1 percent real growth in 2016 to 2.3 percent.

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