Nigerians go to the polls for crucial elections on Saturday but their country of near two hundred million faces a lost decade with growth stagnating unless the in coming leader is able to fix an economy that vies with South Africa’s to be the continent’s largest and weans it off dependence on oil.
The winner of the Feb. 16 presidential election will face the task of diversifying the economy of Africa’s top oil producer, easing stubbornly high inflation and improving the living conditions of a rapidly growing, young population struggling to find jobs.
Without reforms to reduce its oil addiction, Nigeria risks “a lost decade” of flat economic growth, according to a January report by the Brookings Institution.
“Whoever becomes president has to make sure that these non-oil sectors of the economy that are performing well also become globally competitive so that they make up a bigger share of the export basket,” said Phumelele Mbiyo, an economist with Standard Bank Group Ltd.
President Muhammadu Buhari, 76, a former military ruler running for a second four-year term in this week’s vote, has struggled to jump-start the economy and far from lifting growth to the annual 10 percent he promised before the previous election, gross domestic product contracted in 2016.
His main rival, the former Vice President Atiku Abubakar, a successful businessman who has been accused of corruption is trying to capitalize on Buhari’s weak record.
Falling oil prices and output triggered the first economic contraction in 25 years in 2016. Africa’s top oil producer is heavily reliant on crude, with the fuel accounting for 90 percent of foreign-currency earnings and two-thirds of government income.
A spike in food prices and pre-election spending have stoked inflation. That caused the central bank to raise its benchmark rate to a record and keep it there despite earlier calls from government to help boost economic growth by loosening policy.
Although Nigeria’s public-debt levels are among the lowest worldwide at about 21 percent of gross domestic product, according to the CIA World Factbook, weak tax collection could compromise its ability to repay future obligations.
Rising debt levels along with tighter financing conditions have lifted Nigerian bond yields, crowding out credit to private businesses as banks have bought government debt instead of giving out loans, the International Monetary Fund said in March.
Authorities have tried to shift away from domestic government borrowing by issuing almost $10 billion in Eurobonds in the last two years.
However, the government needs to diversify its economy to bolster revenue in order to unlock private credit and improve corporate performance, the IMF said.
A slow recovery with little job creation has hindered poverty-reduction efforts in Nigeria, which has the world’s highest number of people living in extreme hardship, according to a separate June report by the Brookings Institution.
Jobless growth has “heightened risks of social unrest or discontent” in Nigeria, the African Development Bank said in its 2018 outlook for the continent. The country has a population of almost 200 million people.
“Unemployment will remain an issue even when the economy begins to boom, simply because of the rapid rate of population growth,” which exceeds GDP expansion, said Michael Famoroti, an economist with Lagos-based consultancy, Stears Business.
Nigeria, which the IMF expects to be the world’s third most-populous country by 2050, needs “faster growth to improve per-capita incomes and significantly reduce high unemployment and poverty,” the lender said.
In a bid to attract foreign investment, Abubakar pledged to scrap a system of multiple exchange rates introduced under Buhari, a setup which the IMF said creates distortions in the economy. But central bank Governor Godwin Emefiele, whom Abubakar says he would replace, believes a naira free float would cause capital flight.
THE GENERAL: MUHAMMADU BUHARI
Muhammadu Buhari, 76, made history in 2015 as the first person to democratically oust an incumbent president in Nigeria. Now, as candidate for the All Progressives Congress (APC), he is seeking a second term. It is his fifth run at the presidency.
A reputation as a staunch opponent of corruption was key to Buhari’s victory at the last election.
A Muslim, born on Dec. 17, 1942 in the northwestern town of Daura in Katsina state, Buhari spent his career in the army. Installed as military dictator after a coup in December 1983, his approach was typified by policies that included having people whipped if they refused to queue at bus stops.
He was overthrown less than two years later in another coup, after the military figures who installed him became displeased with his methods.
But Buhari’s anti-corruption cachet has remained strong among his supporters and helped him run successfully in 2015 against Goodluck Jonathan of the People’s Democratic Party (PDP). The party had been in power since Nigeria returned to democracy in 1999.
Buhari rode a wave of anti-corruption sentiment, coupled with promises to revive the stuttering economy and defeat the Boko Haram Islamist insurgency.
Despite a lack of corruption convictions, Nigeria’s first recession in 25 years and a resurgence of Islamist attacks, those policies are little changed for the 2019 race.
He earned the nickname ‘Baba Go Slow’ during his first term when critics said he governed at a glacial pace, particularly when low oil prices caused a currency crisis. The moniker first entered popular usage to describe Buhari when he took six months to appoint a cabinet.
Some, including his wife, have said access to Buhari is tightly controlled by close advisers, known in Nigeria as “the cabal”, and that they are really directing policy.
Buhari was absent for five months in 2017, being treated in Britain for an unspecified ailment. Despite that illness, he announced in early 2018 that he would seek re-election, raising concerns about whether he could serve another four years. Buhari has said he has the energy to do so.
To his admirers, Buhari is frugal, moral and prizes loyalty above other qualities in his allies – a foil to the alleged excesses of the PDP. To his critics, he is an ailing relic with little head for policy and no concern for the rule of law.
THE TYCOON: ATIKU ABUBAKAR
Atiku Abubakar is the 72-year-old candidate for the PDP, the party that inherited power from the military in 1999 and governed for the next 16 years. For the first eight of those years, Atiku was vice president to Nigeria’s new democratic leader and former military head of state, Olusegun Obasanjo.
Atiku, like Buhari, is also a northern Muslim, born in Adamawa state. During the later years of military rule, he became a senior customs official, and later a businessman with ventures in port oil and gas logistics as well as a private university.
He sought the APC presidential ticket for the 2015 elections but lost to Buhari and threw his support behind him, funding his campaign and even lending him a private jet.
Atiku switched sides again in 2017, and last year emerged as the PDP’s candidate. He has promised to “make Nigeria work again”, lifting it out of the economic doldrums with business-friendly policies that he says will create jobs.
He has for years been dogged by corruption accusations, which he denies and for which he has never been charged to court. But Atiku had been barred from entering the United States, and Washington only granted him a temporary reprieve from the ban, Reuters reported last week.
To his supporters, Atiku who is seen as pro business, is an accomplished businessman with the economic credentials needed to boost growth, create jobs and attract foreign investors back to Nigeria as it struggles to recover from the first recession in a generation. His pledge to get Nigeria working again, is resonating with the people and his campaign now seems to have the momentum.
