President Goodluck Jonathan’s phone call to opposition leader, Muhammadu Buhari, to concede defeat makes legal disputes over presidential election results unlikely and paves the way for a swift handing over of power.
Key Points:
- Nigeria ushers in a new government with Muhammadu Buhari’s presidential victory.
- Buhari’s presidency will almost certainly launch a corruption probe that makes contract renegotiation and cancellations highly probable in sectors including bulk fuel distribution, power, oil and gas, defence spending, and infrastructural projects.
- Niger Delta militants are likely to revoke the ceasefire pact and step up a campaign of violence as a negotiation strategy with Buhari government.
The Independent National Electoral Commission (INEC) declared yesterday (31 March) Muhammadu Buhari, of the All Progressives Congress (APC), the winner of the 28 March presidential election. Out of the 26 million votes cast, Buhari secured almost 54% while President Goodluck Jonathan of the People’s Democratic Party (PDP) had almost 45%. Jonathan’s concession mitigates the severe risks of post-election legal wrangling that would have resulted in considerable government slowdown.
Buhari’s presidency
Buhari, aged 72 and a former army general, ruled Nigeria from January 1984 to August 1985, following a military takeover in December 1983. He was later deposed in a coup. During his 20 months in power, Buhari made fighting corruption his administration’s priority. His 2015 election manifesto placed emphasis on the fight against corruption, tackling the Boko Haram insurgency, and creating employment.
Successful after four attempts as an opposition candidate, Buhari will face the formidable challenge in his presidency of navigating out of a troubled economic environment overshadowed by significant political and domestic security risks.
Near-term economic prospects will be tempered by significant headwinds from sharply lower global crude oil prices and the dampening effect of political uncertainty on business sentiments.
There is little prospect of significant oil sector reform before mid-2016, although corruption probes into the sector will probably be launched within the three-month outlook. The proposed Petroleum Industry Bill is likely to be revised again, lowering the prospect of its passage until the end of 2015.
Corruption probes are almost certain to be a key priority for the Buhari administration. Jonathan’s administration, particularly the petroleum ministry, under Diezani Alison-Madueke, has faced allegations of corruption.
In February 2014, Jonathan suspended Sanusi Lamido, the former governor of the Central Bank of Nigeria, for accusing his government of siphoning off more than USD20 billion of oil revenue. The APC party has also raised concerns over corrupt practices in the privatisation process of the power sector, the award of some marginal oil field licences, as well as in defence and infrastructural project spending.
Buhari’s victory is unlikely to lead to the immediate resolution of the Boko Haram insurgency. Buhari, a Muslim and a northerner, escaped an assassination attempt by the militant Islamists of Boko Haram.
However, he is better placed than Jonathan to engage Boko Haram through military operations and dialogue. A key indicator to watch is whether Boko Haram will seek to disrupt the 11 April elections for governorships and legislative assemblies.
Delta militants’ threat to oil assets
Besides the Boko Haram insurgency, Buhari faces the threat of an upsurge in militancy in the Niger Delta as militant leaders had threatened to disrupt the oil and gas sector if Jonathan lost the elections.
However, Niger Delta militants are more motivated by profits rather than political ideology. Therefore, the real concern for Niger Delta militants and their former leaders will be the renewal of the amnesty programme, due to expire in 2015, and in particular the multimillion dollar contracts, which were awarded by Jonathan’s administration, to secure oil installations.
If these contracts are not renewed, the militants are highly likely to step up attacks on security forces and energy production and transport assets, posing a real threat to the country’s oil and gas output.
Militants are still well-armed despite security forces managing to reduce the inflow of illegal weapons. The Movement for the Emancipation of the Niger Delta (MEND) declared a ceasefire in May 2014 after its campaign of violence under operation Hurricane Exodus in April 2013.
MEND claimed responsibility for several attacks, including an 18 May 2014 attack on the pipeline terminating at the refinery jetty in Okrika, Port Harcourt. A renewed wave of attacks would increase kidnap and damage to oil pipeline risks.
Outlook and implications
Buhari’s presidency raises the prospect of reform in the public sector to reduce corruption and an increase in government revenue generation capacity. However, Buhari will face significant challenges in implementing change given the vested interests, culture of corrupt practice, and aversion to compliance.
Buhari’s victory is almost certain to result in contract renegotiation and cancellation in some cases following corruption probes in sectors including power, bulk fuel distribution, defence, and infrastructural projects. The investigation raises the risk of suspension of arrears payments to fuel distributors.
Jonathan’s concession mitigates the severe risk of post-election violence that would have resulted in the loss of thousands of lives and extensive property damage, as was the case in April 2011 with more than 800 deaths when Buhari refused to concede defeat.
However, a Buhari victory could still unleash significant unrest in the oil-producing Niger Delta, with the potential to disrupt oil and gas operations and exports in the event the amnesty programme is not renewed and the new government cancels security contracts with former militant leaders.
By Murtala Touray, senior analyst at IHS Country Risk
