- Nigeria goes to the polls on February 16 in what could be an inconclusive election
- Nigerian economy risks “lost decade” if it does not diversify away from oil
- Next president will have to tackle unsustainable debt; plans of either candidate unclear
Stockholm (Ekonamik) – Nigeria, the largest economy in Africa and the 20th largest in the world, will go to the polls February 16 to elect a new president and members of the National Assembly for the next four-year term. Governors and members of state Houses of Assembly are up for election two weeks later on March 2.
The general election is the largest democratic event in African history, with 84 million of Nigeria’s population of 198 million registered to vote in the 6th general election since the Nigerian military handed power back to civilians in 1999.
At the presidential level, the election will be between Nigeria’s president Muhammadu Buhari and challenger Atiku Abubakar, a successful businessman with a network of patronage extending across the entire country and the biggest employer in his home state of Adamawa.
Mr Abubakar is the more market-friendly candidate, campaigning on a slogan of “Let’s get Nigerians working again” and promising to privatise failing state-owned companies. Unemployment has risen to 23.1% from 8.2% in 2015, and Nigeria has the world’s highest number of people living in extreme hardship, according to the Brookings Institution.
Abubakar is, though, short on details, and critics worry that privatisation would lead to corruption and enrichment of his personal entourage. Buhari, for his part, is running on pledges made in 2015 but which he has largely failed to uphold. His three central tropes of cleaning up corruption, enhancing security and improving the economy have all suffered setbacks during his administration.
On security, early victories against the terrorist group Boko Haram appear imperilled after an attack last month forced an exodus of 30,000 to neighbouring Cameroon, while ongoing clashes between farmers and cattle-herders continue to yield casualties. On corruption, Transparency International gives the country a failing grade.
The Nigerian economy expanded 1.9% in 2018 and is set to grow by 2% in 2019, according to the IMF, but falling oil prices during Bouhari’s term have hurt the economy given its dependence on oil, with crude providing 70% of government revenue and 90% of foreign-currency earnings. The country is set to produce still more in 2019 via its offshore Egina field, which at peak production will have the capacity to pump the equivalent of 10% of Nigeria’s production.
Critics charge Bouhari’s government has not done enough to diversify sources of government spending, with the Brookings Institution warning that Nigeria risks a “lost decade” of flat economic growth if it does not diversify its economy further. The next president will face the critical task of diversifying the economy to bolster revenue to unlock private credit and improve corporate performance.
Rising debt levels alongside tighter financing conditions have lifted Nigerian bond yields, with authorities attempting to shift away from domestic government borrowing by issuing close to $10 billion in Eurobonds over the past two years, which, alongside other African countries, are performing near the top of Emerging Market sovereigns in the Eurobond market.
But the consequences of heavy external debt could prove disastrous because of the volatile nature of the naira, where the value of Nigeria’s external debt could double if the currency tumbles in the foreign exchange market. Central Bank of Nigeria governor Godwin Emefiele last month called on the government to hit the breaks on loan acquisition as the debt burden spirals out of control.
The election will be close. President Bouhari can depend on support in the north of the country where he has made inroads in the struggle with Boko Haram; Mr Abubakar’s People’s Democratic Party is expected to do well in most of the southeast of the country. The outcome will depend on turnout and the swing vote, which will mainly be in the southwest of the country.
It will also depend on the extent of vote rigging in the process of sending results from 120,000 polling units to counting stations. An inconclusive result could trigger a runoff. Nigeria’s constitution requires a second round of voting to occur within a week of the first – a challenge considering the complexity of organising elections in the country and the potential for severe uncertainty in Africa’s biggest market.
UPDATE (February 16): The election was postponed just 5 hours before polling stations were scheduled to open Saturday, and will now be held February 23. The opposition derided the independent electoral commission’s claim that the move was due to “unreadiness” to hold the poll, claiming it was instead a ploy from the government to stop people from voting. Meanwhile, markets were roiled and investor confidence in the country was jolted.
Image: Voting in Kubwa, Nigeria, April 16 2011, by Jeremy Weate. Source: Wikimedia Commons