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REUTERS Nigerian President Goodluck Jonathan
Nigerian elections are just ten days away, and things are getting tense.
The country has a couple of
things going on that make its political situation tenuous, even without
an election. This year they're all coming together to create a
particularly explosive election cycle.
Religion
The country is populated largely
but Muslims in the north and Christians in the south, so there's
occasionally religious conflict. The election, pretty tightly contested
between the Christian incumbent, Goodluck Jonathan, of the People's
Democratic Party, and the former dictator of the country Muhammadu
Buhari. Buhari, who ruled the country back in the 1980s, is Muslim and
represents the All Progressives Congress.
RBC
The election in 2011, which Goodluck Jonathan won by a pretty hefty
margin, led to violence in the Muslim north. This race is much closer.
RBC Capital Markets sent out a note outlining the stakes of the election on Wednesday. This is a key detail:
" Holding the presidency is
particularly important because it often entails the redistribution
of government patronage and contracts to the incumbent’s home region.
Given that the North lacks natural resources and suffers from some of
the highest rates of poverty, the economic costs of being locked out of
power are substantial."
Terrorism bookends the country
The terrorist organization Boko
Haram is wreaking havoc in the north of the country, laying siege to the
largely rural and sparsely populated region. Nigeria just doesn't have,
or won't commit, the resources to fight Boko Haram properly. From Emad
Mostaque's op-ed in the
Wall Street Journal in late January:
Boko Haram’s initial strategy
was to try to undermine and gain control of the Kanuri ethnic regions of
northeast Nigeria while looking to polarize society by attacking states
along the Christian-Muslim divide known as the Middle Belt region. The
Nigerian government response to this push has been slow, with only
25,000 poorly equipped troops deployed against Boko Haram in the
country’s northeast. Nigeria’s whole defense budget for 2014 was only a
third of the $5.8 billion security budget, small for a country with a
GDP of more than $500 billion and facing an insurgency.
The worry is that Boko Haram, which now more or less rules a part of
the north, will keep people from going to the polls. If enough people
are kept away, that could swing the election in favor of Jonathan.
Meanwhile, the ceasefire with
the southern rebel group, Movement for the Emancipation of the Niger
Delta (MEND), ends this year. There's a fear from MEND " that if
Jonathan is defeated, the large annual cash payments that accompanied
the 2009 amnesty agreement will cease," according to RBC. So if Buhari
wins, there could be bloodshed in the south that the military, with its
focus on Boko Haram, is ill-equip to defend against.
Oil
If these two things weren't bad
enough, the collapsing price of oil puts the country in a tough
situation economically. The pinch has caused the Nigerian currency, the
naira, to crash. Thanks to a devaluation in December and central bank
intervention since then, the naira stayed sort of stable throughout the
month of January, but it's still seeing a lot of volatility.
But even with a stable currency, Nigeria is a big oil exporter, and it relies heavily on high prices to balance its budget.
Worse, Nigerian leaders often steal oil. This includes candidates
trying to bolster their campaign coffers. RBC writes, "n ot only does
crude theft spike around elections, but additionally, more production
is shut-in because of the infrastructure damage that accompanies both
the theft itself and the increase in generalized election-related
violence around production facilities."
RBC thinks that because the price of oil is so low, crude theft could be much worse than in previous election cycles.
On top of that, an audit of the
country's oil revenues is expected this week, and it probably won't look
good for Jonathan, the incumbent.
According to the FT,
" PwC, the international accountancy firm, was commissioned to carry
out the audit last March after Lamido Sanusi, then governor of the
Central Bank, publicly questioned discrepancies of more than $1bn per
month between oil sales and income."
The budget shortfalls in the 18
months between January 2012 and July 2013 alone were about $20 billion,
according to Sanusi (who was promptly fired after making those
allegations).