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.
PDP vs APC
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.