• Monday, February 26, 2024
businessday logo

BusinessDay

Nigeria in 2014

businessday-icon

The biggest risks Nigeria will face in 2014 are related to one, politics (the presidential elections due early 2015 and the planned national conference); two, vulnerabilities to a softening oil market; and three, related to or contingent on the first two risks, the management of foreign reserves and exchange rates.

The most important will be political risk. Nigeria has somehow stumbled once again into a broad two-party system, as it did earlier in 1963-64, 1983 and 1993. In each of the earlier episodes, the country went into general elections with two broad electoral alliances “fighting” (literarily and figuratively!) for power, and each time the process ended in chaos and confusion. In 1964, the Action Group (AG) and National Council of Nigerian Citizens (NCNC) formed the United Progressives Grand Alliance (UPGA) to do battle with the Northern Peoples Congress (NPC) and its alliance partner under the Nigerian National Alliance (NNA), the Nigerian National Democratic Party (NNDP). The elections were a fiasco and by January 1966, the military had taken over power! In 1983, the so-called Progressive Parties Alliance (PPA) formed by opposition parties (UPN, NPP, PRP and GNPP) had floundered and the ruling NPN felt sufficiently confident to proclaim for itself a “landslide” victory. On the last day of that year, barely three months later, General MuhammaduBuhari was in power as military dictator! (Buhari by the way, still seeks for the third time, to be a candidate in the 2015 elections, thirty two years later!!! The military ruler who organized the next presidential elections in 1993, Ibrahim Babangida had earlier decreed a two-party system, the National Republican Congress (NRC) and Social Democratic Party (SDP), but when his multi-billionaire friend, M. K. O Abiola appeared set to win, he annulled the entire exercise under pressure from military and regional hardliners, plunging the nation into a five year crises under Nigeria’s worst military dictator, Sanni Abacha!

Nigeria on the face of it would appear to have put its days of coups, counter-coups and military rule behind it having stayed under civil governance since 1999, but some form of “civilianized” but chaotic power struggle has replaced military plotting, and ex-General Obasanjo’s recent open letter to President Jonathan was a uncomfortable reminder of Nigeria’s previous pre-coup signaling and propaganda. The last elections in 2011 were fought essentially on regional basis, with leading Northern politicians seeking a regional consensus against Jonathan who had inherited power as the luckybeneficiary of the death of his erstwhile boss, UmaruYar’adua, a Fulani Muslim from Katsina in Northern Nigeria. Jonathan’s victory was followed by serious violence in which young, electoral officers were targeted and many killed. “Boko Haram”, an Islamic terrorist group based in the North East has dogged Jonathan’s tenure. The opposition merger grouping, All Progressives Congress (APC) has emerged essentially as a Northern stratagem to prevent a Jonathan second term, with allies in the West and South, and several Northern governors have left the ruling party for the APC. Clearly the 2015 elections would be fought almost explicitly on ethnic, religious and regional lines. In Nigeria’s volatile mix of diversity and sectarian fault lines, that cannot be a good thing!

And then there is the National Conference! Many Nigerians, this writer inclusive, believe the country’s problems are structural and cannot be cured by mere elections, but require a fundamental diagnosis and renegotiation. President Jonathan for both strategic and tactical reasons has come to the same conclusion and plans to hold a national “dialogue” in 2014, the centennial anniversary of Britain’s forced amalgamation of the North and South. There could be intricate scenario possibilities around the combination of volatile elections and fundamental national re-examination!

Against this complex political background, the social context is dismal-poverty afflicts over 60% of Nigerians, in effect over 100 million people! 24% of the employable population is unemployed, and for 15-24 year olds, the percentage is close to 40%! Corruption is endemic, and oil theft and piracy are now in the mix. An Islamist insurgency ravages the North-East; and violent crimes, particularly armed robbery and kidnapping are common especially in the Southern states, outside Lagos.  This is clearly not an ideal background for contentious elections in a sectarian context! If the two other risks I mentioned manifest in 2014-a dip in oil earnings, continued divestment by oil majors, currency devaluation, fall in foreign reserves, inflation, etc, then the situation could become dire.

There are several positives of course-GDP growth around 6-7%, power privatization, agricultural reforms, a growing middle class which according to AfDB now represents 23% of the population, some booming sectors-telecommunications, retail, e-commerce, hotels, real estate and construction; a rising capital markets and improving prospects for long term bond financing; etc, but given the gravity of the social crises, their impact is limited at least in the short term.

The problem with Nigerian politics is whenever the contest is close, the battle becomes a zero-sum game or in local parlance, a “do-or-die” war that ends in “lose-lose” outcomes for all sides! On the other hand, Nigeria’s power elite have a well-earned reputation for crisis management and stepping back from the brink. Since the war is usually not over principles or ideology, but over privileges and political bounty, no matter how intense, there is usually scope for negotiation, pay-offs and compromise. I suspect that our reputation for retreating from the edge of the precipice may be sorely tested in 2014!

By: Opeyemi Agbaje