The presidential elections in Nigeria, Africa’s most populous country and largest economy, are having repercussions far beyond its borders.
While the results announced by the Independent National Election Commission are being disputed by the two largest opposition parties, heads of state around the world congratulate Bola Ahmed Tinubu, candidate of the incumbent All Progressive’s Congress, and the transition process has effectively begun.
To judge the election, IC intelligence convened a panel consisting of: Ryan Cummings, Director of Analysis at Signal Risk; Charlie Robertson, Global Chief Economist at Renaissance Capital; Dr. Alex Vines, head of the Africa program at Chatham House; and Lagun Akinloye, Global Operations and Governance Manager at HE Toyin Saraki Global Office and Philanthropy.
Here are some conclusions from the session, which was moderated by Dr. Desné Masie, Chief Strategist at IC Intelligence.
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The Independent National Electoral Commission (INEC) has made poor planning
Before the election, INEC, Nigeria’s election management body, was getting more money than ever before (estimates had quoted $662 million, but Dr. Vines said the presidency likely spent $2 billion in total on the election).
The capital injection into INEC during this election allowed it to roll out a new electronic system designed to improve verification and overall efficiency of the process. On the day, however, INEC struggled with fundamental logistical issues.
Dr. Alex Vines reported that many polling stations were unable to start the process at the advertised time of 8 a.m. because voting materials were not available. This meant that many polling places had to stay open well past the official closing date and counting continued well into the night, opening the door to intrigue and allegations of intrigue.
Despite these issues, Dr. Vines said the process was largely open, with the census and declaration being conducted in full view of officers and voters. Many people complained that they could not vote.
Election challenges have little chance of success
The opposition parties claim that INEC announced votes without using the election management software which could have been verified by all parties and that these results may not reflect what may have been declared at the polling stations. Candidates from the Popular Democratic Party and Labor Party say they are collecting evidence for a petition to the Supreme Court.
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However, as Ryan Cummings pointed out, the provisions of the Nigerian Constitution and the Act establishing INEC set a very high bar for annulment. It is unlikely that the Supreme Court, which has rejected all previous petitions of this nature, would conclude that the irregularities were sufficient to fatally jeopardize the margin of 1.8 million amassed by the declared winner.
Low attendance destroyed Obi’s hopes
Labor Party candidate Peter Obi looked poised to disrupt the duopoly that has dominated Nigeria since its return to democracy in 1999.
With some projections, including those from Stears, who predict the winner with a high turnout. He ran an exciting campaign that woke up young and educated voters who are weary and disappointed by Nigeria’s perpetual inability to live up to its potential.
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Mr. Obi and his campaign would have been further aided by the enthusiasm with which the registration process was embraced by voters. An unprecedented 87.2 million voters purchased personal voter cards, but according to Dr. Vines, only 24.9 million people actually exercised their right to vote in the February 25 elections.
The big question is why this election caused so much excitement, why was the turnout so low? Uncertainty can be a source, but disillusionment is more likely.
Ryan Cummings said this could be due to fears around security and challenges in getting currency during a central bank exercise. Charlie Robertson claimed that if voter turnout had reached 50 percent, Mr. Obi might have received the second-highest number of votes, but still would not have won.
Baba Tinubu faces a terrifying mailbox
Nigeria faces a daunting future, especially on the economic side. According to Robertson, the good days of the early 2000s are far behind us.
In its first two decades, Nigeria benefited from the IMF’s Heavily Indebted Poor Countries (HIPC) program and debt relief, access to international capital markets, cheap interest rates, and a China willing to borrow (because of its high savings rates). Today’s circumstances are very different, and almost the opposite.
On the campaign trail, Mr. Tinubu promised to hit the ground running. That dedication will be severely tested by the economic and social challenges he faces on day one. Nigeria’s security challenges are among the many promises that his predecessor and fellow party member, outgoing President Buhari, has failed to keep. Lagun Akinloye said the rising cost of living, high unemployment, poor social services and the overhang of two recessions since 2015 have combined to paint a picture of hopelessness, especially among the youth.
Charlie Robertson said that while hugely unpopular in the country, Nigeria’s best bet may be to approach the International Monetary Fund. A president with as low a majority as Tinubu taking office may not have the leeway to make such a move, especially since he has already committed to a (phased) withdrawal of fuel subsidies.
Dr. Masie explained that Moody’s recent downgrade of Nigeria’s sovereign debt will further limit borrowing in the capital markets and that the debt situation will remain dire as a large portion of the debt service is currently interest payments. Should oil prices remain uneconomic, economic conditions will remain on the heavy side despite growth prospects of 3% of GDP.
Difficult decisions cannot be postponed much longer
Many observers expect Tinubu to take a more muscular approach to economic management than its predecessor.
Like his main contenders, he had promised a more business-friendly and less protectionist government. Mr Akinloye noted that his tenure as governor of Lagos showed that he has an eye for talent and may be able to assemble a capable cabinet to pursue his agenda.
He will need all the help he can get. Nigeria’s overvalued currency has led to a shortage of hard currency in the market. Despite its reputation as an oil-producing giant, Charlie Robertson points out that its production in this densely populated country is only five cents per person per day.
In the face of economic constraints, the new president will have to act quickly to make some tough decisions and introduce fiscal discipline before things get much worse and less manageable without even more painful disruptions.
However, with no certainty of a majority in the lower house of parliament or among partisan governors, the president-elect will have to do his job for him. However, he will have no problem replacing Central Bank of Nigeria Governor Godwin Emefiele, which all major candidates have indicated they intend to do.
The forex will have to move closer to the parallel rate, which is close to $700. This will have undesirable consequences (inflation), but it is necessary to help deal with FX shortages and provide comfort to investors who are reluctant to invest with such a large discrepancy between rates.
The only way is up
Despite the challenges of the elections, there is still hope for the development of Nigerian democracy. Consistent elections in one of Africa’s most important countries are an indicator of stability in the region.
Even the challenges in the system being deployed by INEC could provide lessons for its neighbors about what they should or shouldn’t do as they tighten their own electoral system, as argued by Mr Cummings.
Mr Obi’s performance, while not as spectacular as expected, is nonetheless robust and is an unprecedented shock to the system and an indication that Nigerian voters are ready to try something new, according to Mr Akinloye. This view was shared by Mr Robertson, who predicted that a third party could win in a few election cycles.
What is needed now, he said, is stronger economic policy making to address the forex shortfalls and challenges in the business environment to get the Nigerian economy back to growth.
Dr. Desne Masie
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