Nigerian elections are just ten days away, and things are getting tense.
The country has a couple of things going on that make its political
situation tenuous,
even without an election. This year they're all
coming together to create a particularly explosive election cycle.
Religion
The country is populated largely but Muslims in the north and
Christians in the south, so there's occasionally religious conflict. The
election, pretty tightly contested between the Christian incumbent,
Goodluck Jonathan, of the People's Democratic Party, and the former
dictator of the country Muhammadu Buhari. Buhari, who ruled the country
back in the 1980s, is Muslim and represents the All Progressives
Congress.
The election in 2011, which Goodluck Jonathan won by a pretty hefty
margin, led to violence in the Muslim north. This race is much closer.
RBC Capital Markets sent out a note outlining the stakes of the election on Wednesday. This is a key detail:
"Holding the
presidency is particularly important because it often entails the
redistribution of government patronage and contracts to the incumbent’s
home region. Given
that the North lacks natural resources and suffers from some of the
highest rates of poverty, the economic costs of being locked out of
power are substantial."
Terrorism bookends the country
The terrorist organization Boko Haram is wreaking havoc in the north
of the country, laying siege to the largely rural and sparsely populated
region. Nigeria just doesn't have, or won't commit, the resources to
fight Boko Haram properly. From Emad Mostaque's op-ed in the Wall Street Journal in late January:
Boko Haram’s initial strategy was to try
to undermine and gain control of the Kanuri ethnic regions of northeast
Nigeria while looking to polarize society by attacking states along the
Christian-Muslim divide known as the Middle Belt region. The Nigerian
government response to this push has been slow, with only 25,000 poorly
equipped troops deployed against Boko Haram in the country’s northeast.
Nigeria’s whole defense budget for 2014 was only a third of the $5.8
billion security budget, small for a country with a GDP of more than
$500 billion and facing an insurgency.
The worry is that Boko Haram, which now more or less rules a part of
the north, will keep people from going to the polls. If enough people
are kept away, that could swing the election in favor of Jonathan.
Meanwhile, the ceasefire with the southern rebel group, Movement for
the Emancipation of the Niger Delta (MEND), ends this year. There's a
fear from MEND "that if Jonathan is defeated, the large annual cash payments that accompanied the 2009 amnesty agreement will cease," according to RBC. So if Buhari
wins, there could be bloodshed in the south that the military, with its
focus on Boko Haram, is ill-equip to defend against.
Oil
If these two things weren't bad enough, the collapsing price of oil
puts the country in a tough situation economically. The pinch has caused
the Nigerian currency, the naira, to crash. Thanks to a devaluation in
December and central bank intervention since then, the naira stayed sort
of stable throughout the month of January, but it's still seeing a lot
of volatility.
But even with a stable currency, Nigeria is a big oil exporter, and it relies heavily on high prices to balance its budget.
Worse, Nigerian leaders often steal oil. This includes candidates trying to bolster their campaign coffers. RBC writes, "not only does crude theft spike around elections, but additionally, more production is shut-in because of the infrastructure damage that accompanies both the theft itself and the increase in generalized election-related violence around production facilities."
RBC thinks that because the price of oil is so low, crude theft could be much worse than in previous election cycles.
On top of that, an audit of the country's oil revenues is expected
this week, and it probably won't look good for Jonathan, the incumbent.
According to the FT, "PwC,
the international accountancy firm, was commissioned to carry out the
audit last March after Lamido Sanusi, then governor of the Central Bank,
publicly questioned discrepancies of more than $1bn per month between
oil sales and income."
The budget
shortfalls in the 18 months between January 2012 and July 2013 alone
were about $20 billion, according to Sanusi (who was promptly fired
after making those allegations).
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