Nigeria: More Questions Than Answers As Election Day Nears - Emerging Market Views

Nigeria: More Questions Than Answers As Election Day Nears

Nigerians head to the polls on February 16 to choose their next president, wrapping up a two-horse race between incumbent Muhammadu Buhari, representing the All Progressives Congress (APC) party, and Atiku Abubakar, a former vice president with the People’s Democratic Party (PDP). The contest remains too close to call, typified by two less-than-perfect candidates with numerous vulnerabilities that have impeded their ability to build broad-based support.

While the former has been forced to answer questions about his health, defend his handling of the economy and maintains a tenuous hold on a fractious coalition, his challenger is viewed with suspicion and is unable to shake corruption allegations stemming from his previous stint in government.

Elections will be held again on March 2 to determine which party controls the National Assembly (the House of Representatives and the Senate) – key to implementing the president’s agenda. Until recently, there had been no instances of divided rule in the history of Nigeria’s civilian governments, until a burst of high profile defections last year by APC politicians – fueled by self-interest or disenchantment with Buhari’s leadership – saw the ruling party lose control of the Senate and its majority in the House significantly reduced.

The upheaval within the APC is not surprising given the party was only formed six years ago to challenge then-President Goodluck Jonathan and the ruling PDP in the 2015 elections. Formed in February 2013, APC was birthed from an alliance of Nigeria’s three biggest opposition parties – the Action Congress of Nigeria (ACN), the Congress for Progressive Change (CPC), the All Nigeria Peoples Party (ANPP), and a subgroup of the All Progressives Grand Alliance (APGA).

With the successful realization of its ‘raison d’etre’ in 2015, the lack of a common cause to rally behind in peacetime has made it harder for the APC leadership to appease coalition members and keep them in line.

To compound matters, Nigeria’s economic performance in the first two years of Buhari’s tenure – recession in 2016 (economic activity contracted by 1.6 percent) and anemic 0.8 percent growth in 2017 – coupled with an increase in youth unemployment has negatively affected the current government’s standing. His administration has also spent significantly on infrastructure projects to ramp up the pace of the country’s development, but with mixed results. Other issues remain unaddressed, such as the sub-standard education and health systems, the lack of reliable sources of industrial inputs such as electricity, the need to upgrade the oil sector, and the fragile health of its banking industry.

There are also ongoing frustrations with his handling of the country’s security situation, including the clashes between herdsmen and farmers in central Nigeria last year which claimed thousands of lives. Add in the fact that the 76-year old Buhari has spent a noticeable chunk of his term abroad for medical treatment, meaning doubts about his ability to handle the rigors of another four years in charge continue to bubble.

Many believe the defections have handed the advantage to the PDP leading up to the elections, but their flagbearer has been unable to shed accusations about how he built his vast business empire and build on the momentum.

Abubakar has been dogged by accusations of corruption for many years, charges which he consistently denies, but his detractors believe the majority of his support is from prominent politicians and businessmen who have been financially damaged by Buhari’s anti-corruption crusade.

His opportunism in throwing his support behind the APC when it was first formed ahead of the 2015 elections, before switching allegiances back to the PDP to become its nominee has done little to enhance his reputation.

Atiku Abubakar. PHOTO: @AtikuOrg

Abubakar favors free market economic principles in which the economic rebound is fueled by a revitalized private sector, and he has vowed to pursue major reforms such as selling most of the state oil company, Nigerian National Petroleum Corp (NNPC), and allowing the Naira to float freely. However, some view his proposal to sell stakes in NNPC as an example of the real risk of a surge in crony capitalism should Abubakar become president, where any efforts at privatization are geared towards further enriching himself and his inner circle.

It remains to be seen how much of his platform is simply election-year bluster, and if Abubakar truly possesses the political bravery to eliminate subsidies on items such fuel, power generation and end its fixed currency policy. Nigeria’s rigid exchange rate regime is tied to the economy’s dependence on imported goods – there are two official exchange rates, one at which it sells U.S. dollars to local companies to purchase foreign products, and the other for foreign investors in Nigerian bonds and equities.

Abubakar’s campaign should receive a boost from the recent decision by the U.S. State Department to lift a travel ban against him in connection to corruption cases. Being able to now visit the U.S. removes one of the biggest questions about his potential presidency – how he could govern effectively and promote Nigeria’s interests if he remained barred from the world’s largest economy.