Nigeria, the most populous black nation is about to elect her leaders for the next spell of four years. This election is coming at a time when the oil price is at its lowest in five years. Crude oil contributes about 75% of the country’s revenue and oil exports represents a whooping 95% of the country’s total exports. This sets the stage to explain the impact dropping oil price can have on the country’s economy.
The 2015 presidential elections features the two prominent candidates of the 2011 elections. The incumbent – President Goodluck Jonathan faces the former Head of State – Gen Muhammadu Buhari once again. Unlike the 2011 elections where voters were clearly divided along geopolitical lines, the 2015 election has seen both parties gain support across the North – South Divide. While the ruling party is seeking re-election on the grounds of the government’s achievements under the Transformation Agenda, it’s major opposition party is riding on the populace’s yearnings for Change. Either way, tough challenges face whoever succeeds to be at the helm of Nigeria’s affairs after the 2015 elections.
The first challenge is the significantly reduced revenue as a result of falling oil price. The nation’s 2015 budget tagged Transition Budget, uses a baseline oil price of $65. This is despite the price of oil going below $50 per barrel. In summary, the next government will need to implement strict controls to ensure that it does not run into deficit before the year runs out. The rosy promises being made by both political parties in a bid to win the elections will only raise the expectation from the populace and put them under more pressure to perform.
The second challenge is that of insecurity. The menace of Boko Haram in the North Eastern part of the country has become an international concern. This security concerns has affected the popularity of the ruling party in the affected part of the country. Should the incumbent president who hails from the oil rich southern part win, he will have to put an end to the insurgency so as to avert the spread. The other security concern is the disposition of some ex-militants in the Niger delta to return and cause havoc in the creeks, if their candidate does not win.
The uncertainties in the election has seen some foreign investors withdraw an estimated $4bn from the country’s capital market. The Naira has constantly depreciated against the US dollar since November 2014, losing about 15% in 3 months. The efforts of the international community, the political parties and the presidential candidates to ensure a violence free election is commendable. Hopefully Nigeria by the precautions on ground will avoid the kind of violence that followed the 2011 elections.
The country will need peace and stability to face the economic challenges ahead.
by Patrick Nonso