With eye on economy, Nigeria girds for combustible election

Declining crude oil prices have sapped Nigeria's export revenues. If reelected, President Jonathan has vowed to diversify the economy of Africa's biggest oil producer. 

Joe Penney/Reuters
A trader changes dollars with naira at a currency exchange store in Lagos.

Although the fight against Boko Haram militants has taken center stage in Nigeria's election campaign, the continued decline of Africa’s largest economy could be the deciding factor for voters later this month.

Nigerians are frustrated with power shortages, the rising cost of goods due to currency depreciation, and persistent youth unemployment, all areas affected by recent economic woes.

“The state of the economy has increased the level of uncertainty in the country,” says Dr. Ismail Ibraheem, a mass communications professor at the University of Lagos. “I am not sure that I will be able to buy the same things with my salary that I bought a month ago.”

A sharp drop in crude oil prices has been felt worldwide. But it bites especially hard for oil-producing countries like Nigeria, where the majority of the economy is structured around oil sales. It exports around two million barrels per day, and oil revenues generate about 90 percent of foreign exchange earnings and close to 80 percent of government income. 

Mr. Ibraheem predicts these economic headwinds could translate into more votes for opposition leader Muhammadu Buhari and his APC party. Mr. Buhari is in a tight race against incumbent President Goodluck Jonathan, who many blame for the weakened economy. 

“The problem we are facing today is the problem of security and economy. We have gathered competent hands to manage the economy and tackle insecurity,” Buhari said during a campaign speech in January.

He accuses government of running the economy into the ground and says their economic policies have worsened the lives of Nigerians.

Unclear future 

The economic instability coupled with the postponement of the election to Mar. 20 due to the Boko Haram threat prompted Standard & Poor's to put Nigeria on watch for a potential downgrade last month. Nigeria's current BB minus rating is three notches below investment grade. After the polls were delayed by six weeks last month, Nigeria's currency fell to an all-time low of about 205 to the dollar. 

“Uncertainties of the election cycle also reinforced the volatility of the local currency and relative weakness of corporate investment,” says Abiola Rasaq, head of research and chief strategist at Associated Discount House.

Solutions are few, but experts say short-term solutions can only have a limited impact. “The only thing that will stop further devaluation is when the economy is made less import-dependent,’’ says David Adonri, chief executive officer of Lagos-based Lambeth Trust & Investment Co. Ltd.

President Jonathan agrees. Though he claims to have led Nigeria to become Africa’s number one economy – a status it gained last year as a result of recalculations of its economic output, rather than a sudden growth spurt – he has pledged to diversify it away from dependency on oil. 

At the Nigerian Stock Exchange on Thursday he promised to hand more control to the private sector if he stayed in office saying that the government “will no longer be the owner and manager of businesses.”

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to With eye on economy, Nigeria girds for combustible election
Read this article in
QR Code to Subscription page
Start your subscription today