Analysis of Nigeria’s elections in 2015

This article is a section from a report “Investing in Nigeria” and shall be viewed in the context of the title. Please view the report for more information on the subject as well as references for this article.

The recent elections reflected themselves in investor activity by a “wait and see” approach, trade volumes in the stock marked lowered and there are strong indications of some funds being moved to Kenya’s stock market while the elections took place in Nigeria.

In the recent elections, uncertainty was felt by the average Nigerian, as each elections have the potential to evolve the country forward or put it decades back.

It’s no surprise however that the power was transferred peacefully – the country depends on democracy to advance further and achieve its potential.

There have been international concerns about the democracy development in Nigeria, however it can be argued that the concerns are just a phase in development of democracy. Political changes in a democratic environment cannot happen overnight, even the questioned 2007 elections can be considered normal in an 8 year old (at the time) republic that evolved from a military rule. The issues and concerns of the present government can be viewed similarly.

There is a conscious awareness of the fact that people of Nigeria have rights and power to make changes. The people of Nigeria are hungry for democracy, Nigerians won’t accept any more military rulers. Any political players need to work within the democratic framework. This is largely due to the occupy Nigeria movement, that saw the country held to ransom for 5 days in January of 2012. The fact that hundreds of people died after demonstrations following the 2011 elections, demonstrates the mobility of the population and the desire for democracy.


The parties don’t differ in any ideological way, parties in Nigeria generally represent specific interest lines or ethnicities, not ideology. This results in the people at government changing, not any major changes in developments or ideology. In fact, many of the regulations, laws and policies from the previous federal government is being carried out by this government.

Before the previous administration, there was a tendency for the government’s to start with fresh new plans and policies. This is less of a case within the federal government now, however remains the case with state governments on governor bases. That is one of the main drivers of gaps between the states – no changes can get traction due to being dropped the moment a new governor comes in.

The real change in the fact of the election of APC is that the country now has two strong oppositional parties, which are willing to challenge each other. The PDP is facing the need to settle in as the opposition, if they are able to do this, the country will see more getting done due to public pressures.

Reasons for APC’s success

A question remains of why the citizens felt the need to elect the opposition and face the risks associated with it. Buhari had ran for president in every election from 2003, there was a chance to elect him before. What had changed?

Prior to the 2015 elections, the country had reached an extreme point – Boko Haram was gaining traction, frequency of power shortages hadn’t changed and the corruption was very public. By many of the public, any government was perceived to be better than the Goodluck Johnathan’s government.

Even though Buhari had ran before, he was sectional with his statements and simply put – not electable in the South. This changed in 2015, he gained support from the powers in South and became more electable all around the country, not just the North.

The General Buhari, as he was known before, was also perceived as fairer and able to tackle the very public corruption.

The new Nigerian president Buhari

President Muhammadu Buhari could be considered a power player – he’s been involved in 3 coups before becoming the head of state in 1983 and has ran for the president in 4 out of 5 elections the 4th Nigerian republic has seen.

Buhari seems to have a deep desire to be the president, a personal ambition and a quest. He’s considered the first president to actually want to be a president, the previous presidents were put in by someone or by circumstances – they were foisted to some extent.

Nigeria is facing challenging times and needs a strong government to overcome the upcoming challenges. A concern with Buhari is that the presidency title is his personal ambition and it might not be his career potential. It appears that he’s not fully aware of his responsibilities and demands of this position.

With his drive and ambition to become the president, he has made many statements and possibly promises to other politicians that he simply cannot follow through. This could be considered the main reason why there has been a delay at appointing the cabinet – he’s looking around to whom he can trust and how to deliver the promises he’s made. The fact that the APC consists of merged 3 parties doesn’t help – he will have to upset some people that have sacrificed for him to become the president.

As an example, Buhari made a statement in February 2015 at Chatham House, stating that his government won’t consist of corrupt officials, yet he has gotten to where he is thanks to people that put him there and a collective effort of his party. He will have to be biased at any attempts to tackle corruption, which might lead to him simply tackling the public corruption, which has been the case in many African nations.

The personal interests of politicians are now overlapping the desires of people, the only way this government will work out and transform the country is if they lay down their personal interests. This is not likely to happen, given the motives behind forming the APC party. We will likely see 4 years of the political party members establishing themselves and arguing between themselves.

Some political commentators have even forecasted the APC splitting – “I said it before the elections that the APC will be challenged to stay together, should they win the election. This is because I recognized that there are too many political heads, too many egos in the party with different agenda’s that will need to be satisfied” Priscilla Nwikpo told me.

If the party was to split before the next elections and the nation was to follow its constitution, Buhari would have no legal rights to be the president and a new election should take place. This would add to the already high political risks and likely have some reflection in the countries capital markets due to changes in investment sentiments.

It should be emphasized, however, that all these short term issues and concerns might be a part of transforming the country. Clearly it could be considered good for the country in the long term if the nation followed its constitution and another elections were to take place in case the APC split.

It’s important for long term investors to recognize and follow on aspects of the political landscape that might be off of this transformation and potentially put the country decades back. Africa generally has had a history of power hungry leaders holding power for the sake of it, resulting in leaders making decisions to stabilize their power base, instead of utilizing the power to increase economy and living standards. As long as there is a shift away from this history, we are likely to see developments, especially with the changing view on Africa – journalists are no longer asking about aid and corruption in conferences, but rather about trade, investment and capital.

Pressing matters president Buhari will face in 2016

This article is a section from a report “Investing in Nigeria” and shall be viewed in the context of the title. Please view the report for more information on the subject as well as references for this article.


Ever since the discovery of oil, Nigeria has faced enormous corruption at every level of the government. Historically, every poor country to discover oil has faced high levels of corruption and economic stagnation.

It’s estimated that around $400bn were illegally transferred out of the country and the economy between 1966 and 1999.

It’s very common for democratic African politicians to use anti-corruption in their campaigns. Fighting corruption can easily hit a roadblock however – everyone knows where everyone’s bodies are buried. This results in government officials agreeing to lower the public corruption, but no real actions against roots of corruption are taken.

It appears that corruption is enrooted in the culture of Nigeria – the average Nigerian has faced some sort of fraudulent dealing in every stage of his life. Passing school tests can mean a bribe to the teacher in some instances. Some jobs can be awarded fraudulently.

When Buhari was first the head of state in 1983, his war against in disciplinary proved fruitful – the monthly sanitary law is still active nowadays. Around the world, similar campaigns have changed the public’s actions and views. Nigeria has the media platforms to promote anti-corruption campaigns, this was very well observed with a popular phone application that had the constitution in it. There were also other successful campaigns that popularized the constitution through media platforms.

Corruption won’t disappear in a low GDP per capita country, however it can clearly be limited – it’s a question of political will. There are hopes put on Buhari due to him wanting to leave a legacy, which he partly did with the monthly sanitation law.

Some industries in Nigeria are structured in favour of corrupt activities – the seed and fertilizer industry is a good example. The agricultural inputs were sold to distributors at a 50% discount, to be sold at the same discount to the farmers. The distributors however sold them at the full price. Replacing this system with an e-wallet system saw this sort of fraudulent activities disappear.

Corruption also spreads in a sense of political connections, some of the state run economic initiatives have been awarded based on such terms. The failed Medium Enterprise Equity Investment Scheme and Micro Finance Scheme have been suspected of awarding funds based on political connections.

For investors, it’s important to see where corruption is evolving, especially with the low oil prices and increased investments in development projects. There have been records of decisions in the advancement and development projects being made on political bases, rather than on the actual needs of people. This has led to an increased link between the level of corruption and investment sentiment for infrastructure projects.

Insurgency in the North

Insurgency in the North is already a reality by means of Boko Haram, to a more in-depth detail terrorism is covered in the Terrorism section of this report.

The insurgency problems the nation faces are due to educational and economical gaps between regions and states. These problems have very little to do with religion, there have been times when Nigerians lived as Christians and Muslims happily around each other, in some instances even one family having both Christians and Muslims. This recent tension between the religions can be argued to be politically driven, with politicians trying to gain popularity and creating the tensions as a result. In many instances, this is simply a politician putting the blame onto anything else than himself.

There have always been some level of ethnical tensions, as Saro-Wiwa argued – the Nigerian territory was made by the British on colonial bases, not on the bases of nationalities or ethnicities. This is the main driver of ethnical tensions. The constitution states that a president must be of a federal character and treat all states equal. This doesn’t help with the tensions, when some states feel left out or perceive the president as sectional.

In the instance of the development gaps in the North, the South cannot be blamed. States in Nigeria receive monthly allocations from the oil revenues. The North hasn’t been investing this money, creating the gap between other parts of the country. The governors should be made accountable for the allocations, accounting for where the money has gone.

The South has had an advantage in terms of the oil and ports created jobs, but it has also spend its allocations wiser. Lagos has developed internal revenues by enforcing more efficient tax collections, this has been driven partly due to the monthly allocations being held due to political tensions.

Nigeria has seen more Northern leaders than Southern leaders. The issues we are seeing are in economic development, governing and to some extend in culture. For example, Muslims are allowed to marry up to four wife’s, this has in some instances resulted in children being abounded and not getting educated.

The Nigerian government policies doesn’t help the educational issues – there are different requirements for passing tests between states and regions. Some people have argued that you’re not required to study as hard in the North as you are in the South.

There are many deeply rooted issues in the North, however, there are also successful models in place that can act as blueprints and be copied to solve some of the issues relatively quick. The question again is in the political will. There is a level of in-consistency within the governors of a state, a governor might develop the base for the changes but it might never be followed up by the next governor.

For the population of the North, there definitely will be an opportunity in low skilled agricultural and manufacturing jobs. Many foreigner multi nationals and domestic firms are investing in developing these industries at the North. These industries however depend on infrastructure development in the region and some initiatives for agriculture, such as the Staple Crops Processing Zones that will be location intensive, leading to the opportunities being un-evenly disturbed between the citizens of Nigeria’s North. This will lead to migration between the states and possibly increased unrests.

The fact that Nigeria is an artificial British creation and the cultures and ethnicities within Nigeria are different, gives a base for a particular region to split from Nigeria. This makes it a political priority to solve the issues in the North, else the country will simply split.

Moving the nation forward

Some people in Nigeria are fully self-sufficient and Nigerians generally have had bad and good governance, yet Nigerians have always moved on beside that.

The low oil prices have little impact on the future development of the country, the oil revenues were not used on development projects, but rather consumed, giving a boost to some industries.

Low oil prices have put an urgency for the government to develop other sectors of the economy. A lot of focus is put on diversifying the economy and attracting FDI. The government has taken actions to attract FDI and the attitude is positive – policy makers and government officials are making themselves available for meetings with foreigner investors to address their questions and concerns.

Due to a long political instability and corruption, half of the country is still living in poverty – under $1 a day. The population is highly unequal in terms of income levels and life quality. The infrastructure of the country is very underdeveloped and as some have told me “absolutely embarrassing for the amount of oil revenues Nigeria has seen”.

Investing in Nigeria

Determining where the real investment opportunities in Nigeria are, is dependent on the policies and if the country is able to govern itself out of the challenges it is facing now. The only way Nigeria will achieve its economic potential is by taking a lot of small steps, there is no one, big reform like China had in 1978.

A long term investor should be looking at developments in governing, corruption and infrastructure projects.

A medium term investor should not be making investments based on increased positive conditions in the country due to government policies, but rather seek to capitalize on the opportunities available right now and always seek liquidity.

Terrorism in Nigeria

This article is a section from a report “Investing in Nigeria” and shall be viewed in the context of the title. Please view the report for more information on the subject as well as references for this article.

Boko Haram in the North

It should be recognized that terrorism in Nigeria is a problem, however it’s regional and is not a nationwide threat. The cause of terrorism in Nigeria is economic inequality and terrorists are active in the regions where not much economic activity is happening. A lot of the fundamentals for economic growth and activity are lacking in the North, this makes the north of Nigeria a perfect base for organization such as Boko Haram to rise.

Boko Haram is not considered Muslim by the vast majority of Muslims in Nigeria and it’s very common for Muslim leaders to speak against Boko Haram publicly. The Nigerian population considers Boko Haram an inhumane terrorist organization, rather than a religious group.

The civilian casualty numbers from the attacks are quite high, this is due to Boko Haram attacking isolated villages and using forms of guerrilla warfare. Apart from isolated weak villages, Boko Haram targets religious sites, state infrastructure and in some instances Nigerian security forces.

There have been records of the Nigerian army being afraid to intervene due to Boko Haram being better armed than the army, this was more the case in 2014 however, as Boko Haram was successfully repelled in early 2015 with allied efforts of the neighboring countries of Niger, Chad and Cameroon.

There has been a new wave of Boko Haram attacks, many argue as part of reprisal attacks.

The anxieties induced to the villages by Boko Haram has lead the villagers to take matters in their own hands by forming vigilante groups. Some have successfully repelled attacks from Boko Haram and there have been instances of villagers fighting with arrows and bolts. This indicates that Boko Haram is not as well armed as thought and the perceived success of Boko Haram is due to isolated attacks on civilians that get covered over the media.

There have been instances of crowds of civilians apprehending and beating suicide bombers to death. The intelligence agencies have been able to stop some attacks in the Southern states of Nigeria.

Negative investment sentiment due to terrorism

The attacks of Boko Haram are well covered in domestic and international media, increasing negative investment sentiment over Nigeria. Terrorism is often one of the first concerns when considering Nigeria as an investment destination.

The missing 200 school girl’s case made awareness of terrorism in Nigeria international. Internationally, Boko Haram has been perceived as seizing territory and going the way of ISIL. This perception is mostly driven by the media coverage and cases such as the 200 schoolgirls, without viewing the impact of Boko Haram critically.

Real impact by Boko Haram

There have been a large number of civilian casualties, more than 10,000 people have been killed by Boko Haram since 2009 and 1.5 million have been left homeless. Boko Haram increases the uncertainly and stagnation of the North and should be dealt with an urgency.

Nationwide, the driving engine of the economy is the South where Boko Haram has no impact.

Boko Haram is impacting the economic and business activities in Nigeria only in specific instances, such as if the business relays on sourcing in the north. Some impact has been felt by logistics firms, the truck drivers know their way around in the north and to avoid trouble, but this has increased the length of time each lorry takes to travel between the North and the South. It used to be 5 days, now its 8-9 days. This has increased the costs of each truck and decreased the profitability of each lorry on the road.

To increase the economic condition in the North, some corporations have announced plans to invest money in agricultural and manufacturing plants, to create jobs.

The long term impact might be felt in non-improving education levels in the North, as Boko Haram is against western education in its root ideology and has been attacking schools. This might lead to decreased popularity of education due to students facing the fear of vulnerability of Boko Haram attacks.

Accusations of association

There has been accusations of military officers providing information and weapons to Boko Haram fighters. While the Nigerian military has denied the allegations, a government minister tacitly acknowledged the fact and stated in a BBC interview that the problem officers had been identified. There was a record of a Nigerian businessman who was arrested on charges of helping Boko Haram to plan several attacks and then joining local pro-government vigilante group to gather information.

Considering the Nigerian political landscape and the fact that there is little to non-existing rationale for individual dealings with an inhumane, unsustainable terrorist group driven by poverty, a case could be made that Boko Haram is used as a way to opportunistically incriminate ones political, military or business opponents.

Boko Haram was the main reason the 2015 elections got postponed for 6 weeks, some argue this was done for the PDP to gain more time to gain votes.

There is generally a tendency by politicians and even business people to put blame onto anything else than themselves. Boko Haram is the perfect scapegoat to blame the problems in the North to. One of the interviewees for this report told me of an instance where this was the case – a conference where a top level African nation government executive blamed terrorists for issues terrorists did not cause.


Boko Haram has little impact on the Nigerian nationwide economy and businesses. Their attacks are brutal and high in casualties, so they gain international media coverage.

Investment funds should put emphasis on investment relations, explaining and providing details of Boko Haram to their investors in case of another internationally covered brutal attack or any negative evolvements of the 200 schoolgirl’s case.

Investors should view Boko Haram for what it is – an inhumane terrorist group driven by poverty, destabilizing a few Northern states and leaving some impact on sourcing from the North, instead of making decisions based on media coverage or politician statements.