Nigeria: Land of hopes

By Palle Ellemann, Lead Emerging Market Engagement at GES

The mood is changing in Nigeria, from frustration and despair over the lack of security and progress to hope. Much of the regained confidence is dedicated to one man, Muhammadu Buhari, who won the presidential elections and will be sworn in by the end of May. He is the one to “put the house in order” and free Nigerians from the country’s two most serious plagues – the terrorist group Boko Haram and the endemic corruption. And while he is at it, the expectation is also for Buhari to solve the power supply issue, where electricity shuts down many times every day.

As a former general, Buhari is expected to use his background and military experience to wipe out Boko Haram. The Islamic group has for the past couple of years terrorised the Northern and Eastern parts of Nigeria, kidnapped thousands of women and children and killed entire villages. The elections were postponed six weeks to improve the security situation before carrying out the election process and within these few weeks the military actually made better progress in fighting Boko Haram than in the previous two years. The group is now pushed back to the North Eastern part of the country and, with a better collaboration with the neighbouring countries, the Nigerians expect Buhari to have a relatively quick win. It would be a massive image boost, particularly internationally, if the president-elect could defeat Boko Haram and not least bring some of the hundreds of kidnapped girls back to their families.

Buhari is also expected to take on what can be considered an even bigger beast, corruption. The incoming president is generally considered “clean”. As my driver, who courageously help me navigating the chaotic Lagos traffic explains: “When Buhari was young and took the leadership of the country with a military coup, he had the chance to steal and enrich himself with corruption. But he didn’t. Why would he do so now, when he is old?”

It is anticipated that Buhari will significantly cut down on the size of the government and improve governance of infrastructure projects that are said to have been overpaid for years. Additionally, he will focus on putting trusted people and governance into the Nigerian National Petrol Company (NNPC), which is crucial for securing a flow of resources to the state where 80 per cent of the budget depends on oil.

It remains, however, to be seen in what state Buhari receives the economy. The Nigerian federal budget is already under significant restraint due to the low oil price, which will limit the president-elect’s ability to invest in the growth and development of the country. He needs to materialise the savings from a more efficient government and hope for a higher oil price before he has the means to drive growth and create the jobs so desperately needed in Nigeria. Do the Nigerians have patience for that?

Buhari would also need to deal with the Niger Delta region in Eastern Nigeria, which many of the oil pipelines go through and where local clan leaders rule. This is the region infamous for the massive environmental damage from hundreds of oil leaks that are in many cases left unattended for months or years. Some of these leaks are due to poor maintenance, but most of them are related to theft of oil or sheer sabotage. The oil companies cannot protect the pipelines or clean up the spills due to the lack of security, so the past couple of years the incumbent president Goodluck has paid off the local clan leaders to “protect” the pipelines. This has concentrated a lot of wealth in the local clan leadership, but left the people in the area with extreme pollution and no jobs. Part of Buhari’s solution seems to be that he will employ local people to clean up the environmental mess, but he would also need to deal with the clan leaders, if he wants to discontinue the payment of protection money.

There are a lot of challenges ahead for the new president, but hopes are high and this could be a new era of development in Nigeria. At least the country is turning a page with a relatively peaceful democratic transition of the presidency. In the previous elections bringing Jonathan Goodluck into power more than 800 people were killed in confrontations between the supporters of the opposing parties. This time, there were only few violent confrontations and less than ten fatalities.

I am looking forward to see, if Buhari can deliver on the expectations. Next year, I will be back in Lagos and check in with my driver, if his theory on why Buhari will not be as corrupt as his predecessors holds true.

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