Pol­i­tics and two big risks fac­ing Nige­ria in 2019

Business Day (Nigeria) - - NEWS - LOLADE AKINMURELE & OLUFIKAYO OWOEYE •Con­tin­ueson­lin­eat www.busi­ness­day.ng

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.

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