Noboa popular with investors and voters but challenges remain

Ecuador’s new president, Daniel Noboa, has got off to a quick start, yet the real challenges lie ahead...

Daniel Noboa has proved the doubters wrong. He inherited a country with: institutions corrupted by organised crime; an unprecedented wave of homicides; a bitter and polarized political culture; a fiscal deficit; high unemployment; poor public education and health systems. Meanwhile the troubled presidency of predecessor, Guillermo Lasso, had shown the inability of well-meaning but politically-weak, centre-right governments to govern Ecuador.

Of course, all of those challenges remain today. Yet six months into his shortened presidency – he will only serve 18 months – Noboa has been surprisingly active in taking on those challenges. He has increased taxes, enforced a security crackdown, struck a deal with the IMF and managed to forge consent among most Ecuadorians on these key issues.

It’s a dynamic presidency, which is a market contrast to the lacklustre style of the two previous of Lasso and Lenin Moreno administrations. Noboa would no doubt hate this comparison, but he’s the most active Ecuadorian president since Rafael Correa left office in 2017.


A security crisis early on in Noboa’s presidency, seemed to prove the scepticism correct. On January 10, gunmen stormed an Ecuadorian television station live on air, as part of a co-ordinated series of attacks. Yet Noboa responded by cracking down on organised crime and rounding up hundreds of suspects. His tough response won support from across the political divide and saw his approval ratings reach almost 80%.

Confident he had the support of the people, Noboa launched a referendum to gain the power for new economic and security measures. He won support in all of the security questions, which include the ability to extradite drug lords to the US – something that proved key in combatting Colombia’s narco criminals.

Confident he had the support of the people, Noboa launched a referendum to gain the power for new economic and security measures

He then used that popularity to tackle another serious challenge – Ecuador’s fiscal deficit. Years of government largesse under Rafael Correo, made Ecuador the Latin American country with the highest state spending per capita in Latin America. That was fine when the price of oil, Ecuador’s main export was high, but when they fell in 2014, the country was left with a brutal fiscal deficit. Lasso’s best achievement was solid work of reducing that deficit, yet his government failed to explain to voters why that mattered.

Fast-forward to 2024, and Noboa managed to persuade the Assemblea, where his party does not have a majority, to increase VAT to 15% from 12%. He then built on that to convince the IMF to give Ecuador a $4billion loan on favourable interest rates. None of this will fix Ecuador’s economic problems overnight but it’s an impressive start for six months.

What next

Noboa’s team recognise this is a long-term project. Many of them feel they will need at least ten years to ‘fix’ the country. In that sense Noboa is already on campaign, as his current term only lasts until May 2025.

The risk for Noboa is that voters don’t have the patience for him to implement his long-term vision. Along the way there is time for plenty of missteps. Most of the international community, were appalled by Ecuador’s decision to invade the Mexican Embassy to remove former Ecuadorian VP Jorge Glass. The incident demonstrated the potential dangers of being a man of action – though it played well domestically.

Less popular were the rolling blackouts caused by hydroelectric power shortages. Theories abound of sabotage but the fundamental cause is that Ecuador – a country rich in diverse forms of energy – has failed to build a diversified electricity matrix. That’s not Noboa’s fault but voters could blame him if he doesn’t fix it.

The best way for Noboa to fight crime, repair state finances and win voter support would be to create more formal employment. That would mean unlocking Ecuador’s vast potential in tourism, agribusiness, energy and mining. There are billions of dollars-worth of investment projects in Ecuador that are stymied by bureaucracy and opposition from vested interests. But the rejection of the two economic measures in the referendum – allowing international arbitration for investors and liberalising the labour market – demonstrate that there are limits to the Noboa consensus.

Previous presidents haven’t been able to push though the projects that could unlock Ecuador’s vast natural wealth – it remains to be seen if Noboa can.