Politics and two big risks facing Nigeria in 2019
Three major events are set to shape policy and overall momentum of growth in Africa’s largest economy in 2019, according to a Businessday survey. Businessday polled the outlook of leading local investment houses that included United Capital, Cardinal Stone Partners, Financial Derivatives Company and the research arm of FSDH Merchant Bank.
Expectedly, next month’s general elections topped the list of risks facing the economy this year.
Some 73 candidates are vying for a chance to lead the country for the next four years, although it could be a fierce battle between two dominant candidates – incumbent President Muhammadu Buhari of the All Progressives Congress (APC) and former Vice President Atiku Abubakar of the main opposition People’s Democratic Party (PDP).
Buhari, 75, says he will continue to fight corruption and expand his socialist intervention programmes if re-elected.
Atiku, 72, says he will focus on key economic reforms, from ending a system of multiple exchange rates to selling part of opaque state oil company, NNPC, in a bid to revive an economy still reeling from the 2014 crash in crude prices.
The investment houses polled by Businessday all agree that this year’s election will be tightly contested between Buhari and Atiku, as they said arguments for a Buhari victory are not as strong as that of 2015 when the former military dictator edged out then incumbent President Goodluck Jonathan in an unprecedented turn of events. The North-west of the country handed President Buhari the victory in the 2015 elections, with a total of 7.2 million votes, 46 percent of his total votes.
In addition, Buhari has won all seven North-western states in the last two presidential elections (2011 and 2015) by comfortable margins.
“While we think President Buhari is likely to maintain his strong position in key states in the North West, especially Kaduna, Kano and Katsina, the 2015 margin may reduce considerably, say, to between 65 to 70 percent, amid recent defections by political heavyweights in the region, especially in Kano, Sokoto and Zamfara,” a team of United Capital analysts said.
“Again, President Buhari’s perceived push back of Boko Haram, alongside his long history with the North East region, may support his chances. However, this will be deflated by the fact that Atiku is from this zone,” the analysts said.
Cardinal Stone also expects the margin of a Buhari victory in the region to reduce on vote splitting across religious and ethnic lines, as both candidates, Buhari and Atiku, are Muslim and Fulani.
In their view, the high profile defections witnessed in 2018 from the ruling APC to the major oppos- ing party (PDP) would also have an impact, albeit moderate, on the APC’S expected margin of victory in the region, considering recent events in states such as Sokoto, Kano and Zamfara, in particular.
“Success in the 2019 presidential elections hinges on the ability of the two main parties involved to consolidate votes in their respective strongholds,” a team of analysts at the Lagos-based Cardinal Stone said.
“We have seen that a victory is likely for the PDP, if they are able to gain ground in the North. This victory is possible even if APC retains victory in the same regions as in 2015. Conversely, the APC will need to consolidate its votes in the South West, while retaining its firm grip in the North in order to secure a second term for President Muhammadu Buhari,” they added.
Whatever the outcome, this year’s election is sure to take a toll on the economy of Africa’s most populous nation, in need of urgent reforms to grow sustainably and create sufficient jobs for its teeming people.
A possible change of guard at the office of the Central Bank governor is the second biggest risk facing Nigeria.
The five-year tenure of current CBN governor, Godwin Emefiele, comes to an end this June.
Although the CBN governor is eligible for reappointment for another five-year term, no CBN governor has returned for a second term since 1999.