“While investor confidence might vary across the three leading candidates, the country’s pivotal position on the continent, its wealth of potential opportunities, and the government’s increasingly desperate need for economic growth is likely to nudge the new president along the path of pro-investment policies.”
The long-awaited presidential election in Nigeria was held on February 25th, 2023. In the lead up to the elections, expectations had been high. INEC, the electoral umpire, promised an unbiased and credible election; the police and military assured voter protection and a “bloody nose” for those bent on disrupting the elections. Election day came, and the conduct was a mixed bag. This note briefly explains the nation’s current fluid state. Furthermore, it looks beyond the elections and captures potential worries for the new president (whoever he is) and opportunities for new investors.
This note is being written at a fluid moment. Electoral scores continue to trickle in from various states, there appears to be a clear frontrunner (candidate for the ruling party), pockets of protests are developing in various states, and calls for a rerun in certain polling units are increasing. How the government, the electoral umpire, and the security agencies handle the mounting grievances in different parts of the country remains to be seen. While protests are expected to be staged in major cities, especially in the southern parts of the country, the possibility of its degeneration into general anarchy remains slim. However, this cannot be ruled out completely.
The most likely course of action by the opposition parties is to head to the elections petition tribunal even though some of these parties are currently seeking complete cancellation of the elections. Thus while a new president might be declared within the next 48 hours (barring unforeseen circumstances), a legal battle is sure to ensue in the next couple of months, the outcome of which cannot be predicted beforehand. What is can be predicted is the mounting challenges awaiting the incoming president, whoever he may be.
When the winner is finally decided (by INEC or the courts), the new president will be faced with the reality of leading Africa’s largest economy at such critical times. Nigeria currently faces a multiplicity of challenges, including high inflation, high unemployment/underemployment, an increasingly unsustainable debt profile, and a complex security situation across all parts of the country. Furthermore, the electoral experience is likely to widen an already bad ethno-religious crack across different sections of the country, with potential consequences for freedom of movement, willingness to invest in other states, and intra-regional trade. Thus, by the time the president assumes power, a large part of his work would already be cut out for him. And this could be beneficial for investors.
As Nigeria deals with a high debt service burden and a high debt-to-revenue ratio, policies aimed at attracting new investments as well as increasing the government’s revenues are likely to be pushed through. So far, the three leading candidates have expressed strong interest in partnering with the private sector as well as attracting foreign investments into key sectors of the economy. While investor confidence might vary across the three leading candidates, the country’s pivotal position on the continent, its wealth of potential opportunities, and the government’s increasingly desperate need for economic growth are likely to nudge the new president along the path of pro-investment policies.
There is no gainsaying the fluidity of current events, including the possibility of protests, targeted attacks, and temporary degeneration of order in certain sections of the country. Nonetheless, barring a significant escalation of the state of affairs, we expect a gradual return to normalcy as well as deliberate efforts on the part of the new government to ensure stability, gain investor confidence, and pursue the path of economic growth. This is likely to create opportunities for investors in sectors we highlight in this monthly newsletter and other platforms. Interested investors can reach out to the Kwakol Research Team to discuss their projects.
The French influence across central and western Africa has been on the decline. It particularly suffered deadly blows after French forces we forced to withdraw from Mali and, just a week ago, from Burkina Faso. France is increasingly being replaced by Russia. This new reality could further muddle the security calculus of the region in key areas such as counterterrorism, democracy, and anti-piracy among others. We are closely monitoring this.
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