Project – Executive governance on macroeconomic performance in Nigeria:2015-2023

CHAPTER ONE

INTRODUCTION

• Background to the Study

The relationship between executive governance and macroeconomic performance is a central focus of economic literature, particularly in developing countries like Nigeria. In the context of Nigeria, the role of the executive branch, particularly the president and federal government, is pivotal in shaping the country’s economic policies and institutional frameworks. Between 2015 and 2023, Nigeria’s macroeconomic landscape was shaped by multiple factors including leadership decisions, fiscal policy, external shocks, and global economic trends. A key aspect in understanding the country’s economic performance during this period is the government’s handling of fiscal discipline, infrastructure development, and management of the oil sector, which plays a major role in Nigeria’s economic health (Obadan, 2016).

During the tenure of President Muhammadu Buhari (2015-2023), the government emphasized anti-corruption measures and fiscal reforms as central to economic stability. Buhari’s administration undertook significant steps to address Nigeria’s budgetary deficits, which had been exacerbated by falling global oil prices and internal mismanagement of resources. According to Akinyemi and Ogunleye (2019), the government introduced policies aimed at improving revenue generation through diversification, such as the implementation of the Economic Recovery and Growth Plan (ERGP). However, despite these efforts, Nigeria’s reliance on oil exports meant that global oil price fluctuations continued to undermine the broader economic performance, a reality that reflects the vulnerabilities of the Nigerian economy to external factors.

In addition to fiscal management, the government’s governance structure during this period impacted Nigeria’s economic performance in terms of public sector efficiency and institutional reform. According to Okuneye (2020), governance reforms under Buhari’s administration led to improved transparency in financial reporting and better management of government spending, but the results were mixed. The Public Procurement Act, the introduction of the Treasury Single Account (TSA), and improvements in the anti-graft agencies were some notable attempts to increase accountability. However, critics argue that corruption still remained pervasive in the political elite and public service, which constrained the full potential of these governance initiatives to stimulate economic growth (Ogunleye & Oghogho, 2021).

Furthermore, external economic conditions, such as the COVID-19 pandemic and the global supply chain disruptions, greatly influenced Nigeria’s macroeconomic performance between 2015 and 2023. The pandemic led to an economic contraction, with Nigeria’s GDP shrinking by 1.8% in 2020, marking its worst performance in decades (National Bureau of Statistics, 2020). The government’s response to the economic downturn included fiscal stimulus packages and loans from international financial institutions. However, as noted by Osei-Assibey and Oladimeji (2022), the economic recovery was slow and uneven, with inflation rates skyrocketing due to supply-side constraints, foreign exchange volatility, and rising food prices.

Another key aspect of executive governance is the management of monetary policy through the Central Bank of Nigeria (CBN). During the review period, the CBN played a central role in managing inflation, stabilizing the exchange rate, and responding to economic shocks. However, critics have pointed to the divergence in monetary policy, particularly the CBN’s frequent adjustments to interest rates and the adoption of multiple exchange rate regimes, which added to the unpredictability of the macroeconomic environment (Oni & Ayedun, 2021). Despite these interventions, inflation remained persistently high, and the naira depreciated against major currencies, signaling deeper structural weaknesses within the Nigerian economy.

In conclusion, executive governance in Nigeria from 2015 to 2023 had a significant but mixed impact on the country’s macroeconomic performance. While the government’s fiscal and anti-corruption reforms were steps in the right direction, Nigeria’s heavy dependence on oil exports and external shocks, coupled with challenges in governance and institutional capacity, limited the extent of these efforts in achieving sustainable economic growth. The interplay between domestic policies and global economic conditions underscores the need for more comprehensive structural reforms in Nigeria’s governance framework to ensure long-term macroeconomic stability (Uzochukwu & Nwachukwu, 2023).

1.2. Statement of the Problem

The effectiveness of executive governance plays a crucial role in determining the trajectory of a country’s macroeconomic performance. In Nigeria, between 2015 and 2023, the nation’s economic landscape was marked by a series of challenges and policy interventions aimed at stabilizing the economy. Despite these efforts, Nigeria’s macroeconomic performance has remained largely inconsistent, characterized by persistent inflation, unemployment, slow growth, and external vulnerabilities. The core issue at hand is the extent to which executive governance, including fiscal and monetary policies, governance reforms, and the management of state resources, has been able to address the underlying structural problems that continue to hamper Nigeria’s economic stability and growth. This research seeks to explore how executive governance has influenced Nigeria’s macroeconomic performance during this period and identify the key policy gaps.

A critical challenge in Nigeria’s macroeconomic performance during 2015-2023 was the country’s over-reliance on oil exports. Despite the government’s efforts under the Buhari administration to diversify the economy, the country’s vulnerability to oil price fluctuations and global commodity shocks remained a major constraint. Executive governance, particularly fiscal and monetary policy, struggled to mitigate the negative impact of global oil price volatility. The fall in oil prices in 2014 and the subsequent COVID-19 pandemic exacerbated the economic downturn, leading to a contraction of Nigeria’s GDP in 2020 and increasing fiscal deficits. Although the administration introduced policies like the Economic Recovery and Growth Plan (ERGP) and promoted agricultural diversification, these measures were insufficient to offset the continued economic volatility tied to oil dependence.

Another significant challenge in the governance of the Nigerian economy during this period was the issue of corruption and inefficiency within public institutions. Despite efforts to fight corruption, including the establishment of anti-graft agencies and public financial management reforms, the effectiveness of these policies has been questioned. Critics argue that executive governance under Buhari, although committed to anti-corruption measures, faced significant institutional and political resistance that undermined its impact. Corruption, mismanagement of public funds, and bureaucratic inefficiencies continued to drain the national economy, affecting infrastructure development, public service delivery, and investor confidence. The question arises: to what extent did executive governance in Nigeria, despite its anti-corruption agenda, succeed in creating an environment conducive to sustainable economic development?

Additionally, the macroeconomic policies under the Buhari administration, particularly in relation to exchange rate management and inflation control, have been sources of significant concern. The Central Bank of Nigeria (CBN) was tasked with stabilizing the currency, controlling inflation, and managing the money supply. However, the execution of these policies, including the imposition of multiple exchange rates and persistent inflationary pressures, led to uncertainties within the economy. The naira depreciated significantly against major currencies, leading to a rise in the cost of living and contributing to inflation. High inflation, particularly in food prices, exacerbated poverty and inequality, presenting a critical issue for executive governance. Thus, the question remains: how effective were the executive’s monetary policies in stabilizing the economy, and to what extent did they contribute to the inflationary spiral that Nigeria experienced?

The COVID-19 pandemic presented an additional external shock that further tested the limits of executive governance in Nigeria. The pandemic led to a sharp economic contraction, which highlighted the fragile state of the Nigerian economy and the vulnerability of its governance structures to global disruptions. While the government introduced emergency fiscal and monetary measures, such as stimulus packages and credit facilities, these interventions were insufficient to fully mitigate the economic impacts of the pandemic. The public health crisis was compounded by a decline in global oil demand, which reduced Nigeria’s foreign exchange earnings and weakened the country’s fiscal position. Given these compounded challenges, it is pertinent to examine how executive governance responded to the dual crisis of health and economic instability and assess whether the policy responses were adequate to foster recovery.

Finally, despite various initiatives and reforms, the structural issues in Nigeria’s economy—such as inadequate infrastructure, poor public service delivery, and an underdeveloped industrial sector—persisted. Executive governance during the 2015-2023 period failed to implement substantial structural reforms that could have addressed these deep-rooted challenges. The government’s focus on short-term stabilization measures and political expediency often took precedence over long-term, transformative economic policies. The lack of a coherent, integrated approach to governance reform and economic transformation has resulted in continued stagnation in key sectors such as manufacturing, agriculture, and infrastructure. Therefore, it is crucial to investigate how the executive’s policy choices influenced these structural weaknesses and the long-term economic trajectory of Nigeria.

This study aims to provide a comprehensive analysis of how executive governance during the period 2015-2023 has shaped Nigeria’s macroeconomic performance. It will explore the direct and indirect effects of government policies on the key economic indicators such as GDP growth, inflation, unemployment, exchange rates, and fiscal health. Through this examination, the study seeks to identify the gaps in policy implementation, institutional weaknesses, and the broader challenges that executive governance faced in navigating Nigeria’s complex economic environment. Ultimately, the research will contribute to understanding the role of executive governance in shaping macroeconomic outcomes and offer recommendations for improving governance strategies to foster more robust and sustainable economic development in Nigeria.

1.3. Aim and Objectives of the Study

The aim of the study is to examine Executive governance on macroeconomic performance in Nigeria:2015-2023. The specific objectives are:

1. To analyze the impact of executive governance decisions on Nigeria’s macroeconomic indicators such as GDP growth, inflation rate, and unemployment rate.
2. To assess the effectiveness of government policies and programs in promoting economic stability and growth.
3. To identify key challenges faced by the Nigerian government in managing the country’s macroeconomic performance.
4. To evaluate the role of political leadership in shaping economic policies and their outcomes in Nigeria.

1.5. Research Questions

The research questions are buttressed below:

1. How do executive governance decisions impact Nigeria’s macroeconomic indicators such as GDP growth, inflation rate, and unemployment rate?
2. How effective are government policies and programs in promoting economic stability and growth?
3. What are the key challenges faced by the Nigerian government in managing the country’s macroeconomic performance?
4. How does political leadership shape economic policies and their outcomes in Nigeria?

1,6. Research Hypothesis

The hypothetical statement of the study is buttressed below:

Ho: Political leadership cannot shape economic policies and their outcomes in Nigeria

H1: Political leadership can shape economic policies and their outcomes in Nigeria

1.7. Scope of the Study

The study examines Executive governance on macroeconomic performance in Nigeria:2015-2023

1.8. Operational Definition of Terms

1. Executive Governance: Executive governance refers to the process and structure by which the executive branch of government (such as the president, prime minister, or cabinet) administers and enforces laws, policies, and decisions. It involves decision-making, policy implementation, and the coordination of state affairs to ensure effective governance. It encompasses both the roles of elected officials and appointed bureaucrats responsible for managing the day-to-day operations of the government.
2. Macroeconomic Performance: Macroeconomic performance refers to the overall health and functioning of a country’s economy, measured through key indicators such as Gross Domestic Product (GDP), unemployment rates, inflation, national income, and trade balances. It assesses how well an economy is performing at the national or global level, looking at factors like growth, stability, and resilience. Macroeconomic performance is often used to determine the effectiveness of a nation’s fiscal and monetary policies.
3. Leadership: Leadership is the ability to guide, influence, and inspire individuals or groups toward achieving common goals. It involves setting a vision, making strategic decisions, motivating and empowering others, and maintaining accountability. Leadership can take various forms, including political, organizational, or community leadership, and it is typically characterized by qualities such as integrity, communication skills, adaptability, and decisiveness.

Project – Executive governance on macroeconomic performance in Nigeria:2015-2023