Nigeria: Nigeria to hold first three-way general elections since 1999 on 25 February
- Nigerians will be called to the polls on 25 February for presidential and legislative elections.
- Among the three candidates with winning chances, one represents the incumbent party and two represent the opposition.
- Whoever wins the election will have to implement painful reforms to lift the economy out of the doldrums.
The election: The three main candidates are former Lagos Governor Bola Tinubu from the ruling All Progressives Congress (APC) party, former vice president Atiku Abubakar from the Peoples Democratic Party (PDP) and former Anambra state governor Peter Obi from the Labor Party. While the APC and PDP have dominated elections in recent decades, polls suggest Obi is the favorite. Voter turnout will be decisive; high turnout among the young would benefit Obi amid growing unhappiness at the two major parties and deteriorating economic conditions. Regardless, no candidate is likely to secure enough support to avoid a runoff.
Why it matters: Nigeria is Africa’s largest economy and the continent’s largest oil producer. Given current population growth rates, Nigeria is forecast to be the third most-populous nation in the world by 2050. As a regional heavyweight, the country’s economic performance inevitably impacts that of its neighbors. Lastly, this election is the first three-way contest since the country’s return to democracy in 1999, signaling that a change in the political status quo is possible.
Buhari’s undesirable legacy: During the outgoing president’s eight-year tenure, the country’s public debt-to-GDP ratio almost doubled. In the first 11 months of 2022, the government reportedly used 80% of its revenue to repay debt. Recently, Moody’s downgraded the credit rating to ‘Caa1’, and S&P Global Ratings downgraded its outlook to negative. Both agencies cited an expected deterioration of fiscal metrics. The country has struggled with oil theft, sabotage and a lack of refinery capacity, and has thus been unable to cash in on high crude prices fully. Moreover, recent attempts to swap out old naira notes sparked protests over cash shortages.
Economic implications: The three leading candidates promise to boost economic growth, diversify activity, create jobs and tackle the country’s security issues. They have committed to implementing a measure Buhari never did—removing the fuel subsidies which have strained public finances. All three have also promised to remove the multiple exchange rate system. Solving security issues will be key. The government reported that oil theft amounts to a fifth of overall production; ramping up crude production will not propel overall GDP growth unless security is properly addressed.
The candidates differ in some important respects. For instance, Tinubu has downplayed the dangers of running a fiscal deficit and would likely continue with fiscal expansionism, as the country’s debt-to-GDP ratio is still below the 40% limit set by the government. In contrast, Abubakar and Obi would likely put a greater focus on reducing fiscal imbalances. Moreover, Obi has made corruption a key issue in his campaign and is running as an anti-establishment candidate.
What the future holds: Whoever takes home the victory will have a full plate: Restoring public safety, fighting endemic corruption and oil theft, bringing elevated inflation down and reducing public debt. High unemployment, especially among youth, and widespread poverty are other key issues. Social pushback could complicate policy implementation; removing fuel subsidies and hiking taxes to tame the deficit would be politically unpopular, while currency unification could cause short-term disruptions.
That said, the economy has strengths it can exploit. One of Nigeria’s key assets, the huge working-age population, is not being exploited: Education services are unable to meet the population’s needs and unemployment is high, which translates into an underperforming economy. If the government manages to boost jobs and prevent brain drain, the domestic consumer market will expand massively and social unrest will abate. Moreover, the new Dangote oil refinery will boost fuel production and reduce imports of petrol; petrol imports have heavily weighed on public finances recently.