[From time to time on this blog we have given coverage to political risk issues in other petroleum and emerging market economies aside from Russia, with a special focus on Nigeria, where the law firm has worked over the past number of years. Today we’re pleased to present the first of three in-depth analysis articles on the upcoming Nigerian elections by the highly regarded columnist Salisu Suleiman, who writes a regular feature for NEXT Newspaper, among other publications. – Editor]
With a net worth of $13.8 billion as reported by the Forbes’ 2011 list of the world’s billionaires, Nigerian Aliko Dangote ranks as the 51st richest person in the world, and the second richest man in the Middle East and Africa behind Saudi Prince Alwaleed bin Talal Alsaud, who is worth $19.6 billion.
Ordinarily, that should be good news for Nigeria and Africa. Except that Dangote may not be the richest Nigerian after all. And that is the problem. Nigeria is Africa’s largest producer of oil and earns tens of billions of dollars in foreign exchange annually. But in what is one of the least transparent processes in the world, government patronage and outright corruption has led to an exponential growth in the number of billionaires, some of whom are reportedly richer than Dangote without making it to the Forbes’ list. And that too, is a problem.
The official census figures of 2006 show that there are about 140million Nigerians. That figure is disputed in many quarters. The recentvoters’ registration exercise captured over 73 million Nigerians aged 18and above, though not all eligible voters were registered. Thecountry’s population is estimated at up to 180 million, most of themliving below the poverty line. For Nigeria, the stakes have never beenhigher. The country is sitting on a demographic time bomb; some 30percent of the workforce is unemployed. A recent study warns that thecountry would have to create 24 million jobs in the next 10 years justto halve unemployment. Rising poverty and unemployment have fuelledreligious and ethnic clashes in this country of over 300 ethnic groups.Put all these together against a backdrop 63 parties contesting ingeneral elections spread over three weeks beginning April 2nd, (with aruling party that simply does not lose elections) and you have a recipefor chaos.
Because wealth and status are largely dependent on proximity to thecorridors of power, elections tend to be a truly ferocious affair;senators in the upper legislative chamber earn $1.7 million annually.State governors have almost unfettered access to public funds. Electorallaws forbid donations of more than $7000 to any candidate, but thereare no limits to party donations. Reports indicate that the rulingPeople’s Democratic Party (PDP) may have set aside close to $2 billionto ‘win’ the elections. Some $22 billion from the Excess Crude Account,set up as a stabilization fund remains unaccounted for as at February.Consider this news item reported in a major Nigerian daily:
“In a move targeted at meeting dealers’ rising appetite for forex as thegeneral election draws nearer, the Central Bank of Nigeria (CBN) hasincreased its supply of dollar at the bi-weekly Wholesale Dutch AuctionSystem (WDAS) to $600 million. The regulator had raised its supply to$400 million at its March 14 auction, from between $200 and $300million, which it had offered at various auctions in the precedingmonth. Dealers attributed the trend to panic over the outcome of theforthcoming elections”.
According to the Central Bank, the demand for forex had risensignificantly due to the fact that “dealers had been trying to get out,to buy dollars and hedge their risks on election panic”. With so much atstake, it is no wonder that several lives have been lost even before asingle ballot has been cast; unscrupulous politicians deliberately fuelethnic and religious divisions for electoral advantage. Large numbers ofunemployed youth provide a pool lowly paid foot-soldiers ready tounleash violence.
When the military left government in 1999, politicians decided on aformula to ensure that the country’s disparate ethnic and religiousgroups felt a sense of belonging. They agreed that the presidency shouldrotate between the largely Christian south and mostly Muslim north. Thefirst beneficiary of the arrangement was former head of state GeneralOlusegun Obasanjo who was in office for two terms until 2007. Afterfailing to secure a third (and unconstitutional term), he handpickedUmaru Yar’adua, a Muslim from the north to succeed him based on theoutcome of deeply flawed elections. Yar’adua became president in 2007,but died in 2010 without completing the North’s anticipated 8 yeartenure. He was succeeded by then vice president Goodluck Jonathan fromthe south who decided to run for president in contravention of therotational arrangement. In bitterly contested primaries, PresidentJonathan was alleged to have bribed each of the thousands of delegateswith $7000 each.
In past elections, the Independent National Electoral Commission (INEC)which is the body responsible for the conduct of all elections simplydid the ruling party’s bidding by announcing pre-determined results evenwhere elections never held. This year, however, that body is headed byAmerican educated professor of political science and academic AttahiruJega who is widely respected. Jega has created a fresh voter’s registerwith imported digital equipment costing over $500 million.
Not all 63 parties have fielded candidates for the presidentialelections. Apart from President Jonathan, former anti-corruption chiefNuhu Ribadu and governor of the north’s largest state of Kano, IbrahimShekarau are in the race. Mr. Ribadu is running under the ticket of theAction Congress of Nigeria (ACN) while Mr. Shekarau is of the AllNigeria Peoples Party (ANPP). However, the greatest challenge toPresident Jonathan comes from Mr. Muhammadu Buhari, a former militaryhead of state and retired army General.
Jonathan’s support comes mostly from the political and business elite aswell as his native Niger Delta and south east regions. Mr. Ribadu ispopular with Nigeria’s somewhat indeterminate middle class and a sectionof the youth. Mr. Shekarau’s support hardly extends beyond his homestate of Kano. By contrast, Mr. Buhari has the support of the poor anddowntrodden, and increasingly from outside his traditional base of thenorth. His supporters often wait all day just to catch a glimpse of himat his campaigns. For a country that is so badly scarred by corruption,the word on the street is: “Buhari was a state governor, an armygeneral, a minister of petroleum and head of state, yet he has nomoney”. For the many, this personal integrity and stiff opposition tocorruption is all that is needed to reform Nigeria and unleash herpotentials.
Analysts believe that if President Jonathan is unable to win 25 percentof votes in 24 of Nigeria’s 36 states, in addition to the popular vote asrequired by law, the elections may go into a run-off. If that happens,the opposition is likely to flock behind Mr. Buhari. In free and fairelections, Mr. Buhari is widely expected to beat the incumbentpresident. That will be a first in Nigeria. For democracy not only inNigeria but Africa and beyond, that would be the good news.
But will Nigeria’s elections be free and fair? Will the PDP actually respect the wishes of the people, or will they be up to their old tricks to intimidate voters, stuff ballots, and rig the process? Unfortunately the spate of corruption in Nigeria has reached such heights that the public anger over a manipulated election would be uncontainable, and would propose a crisis of frightening proportions – one that threatens not only the region but also the global economy. This outcome must be prevented at all costs.