February 15, 2019 / 12:09 PM / a month ago

Breakingviews - Nigeria challenger is lesser of two outmoded evils

Nigeria's main opposition party presidential candidate Atiku Abubakar gestures as he speaks during a campaign rally in Lagos, Nigeria, February 12, 2019.

LONDON (Reuters Breakingviews) - Whatever the outcome of Nigeria’s tight Feb. 16 election, the next leader of Africa’s most important country will be four times older than his average compatriot. Given the need to rejuvenate a moribund, oil-dependent economy, that’s not ideal. Opposition challenger Atiku Abubakar is hardly a breath of fresh air and has a graft-tainted reputation, but his talk of relaxing the state’s grip on the currency and oil sector is at least a step in the right century.

That Nigeria matters is not in question. By 2050, the population of the continent’s largest crude producer and economy will have doubled to 400 million, according to the United Nations, behind only China and India. That theoretically makes it a mouth-watering business opportunity. Conversely, if the economy deteriorates, millions may head to Europe and make the current migrant headache a full-on migraine.

Given those stakes, the last four years under 76-year-old Muhammadu Buhari, a 1980s military ruler, have been worrying. The economy has hovered around recession, compared to 10 percent-plus growth in the 2000s. A devaluation and population expansion means the average Nigerian is 30 percent poorer in dollar terms than five years ago.

Even on security Buhari has underwhelmed. Boko Haram Islamists still rampage across the northeast, while crackdowns in the oil-producing Niger Delta have stoked the Igbo nationalism that triggered a 1960s civil war.

Against this, 72-year-old former Vice President Abubakar has some attractions. There is hope in his stated desire to privatise the lumbering Nigerian National Petroleum Corporation (NNPC). Despite crude production of nearly 2 million barrels a day, NNPC’s four ageing refineries meet only a fraction of fuel needs. In 2017, it imported $8.6 billion of petroleum products.

Fixing the refineries and reducing the import bill should also support the naira if Abubakar loosens its peg against the dollar, as promised. Even if the currency weakens, it should help create jobs for the 46 million working-age people currently unemployed by making non-oil exports cheaper.

Yet questions hang over Abubakar, whose first big break was a logistics business established while at the customs service. Although in January he was granted a temporary reprieve, he had been effectively barred from the United States for several years over bribery allegations, Reuters reported. Given the chance, though, he would clearly be Europe’s choice. The issue is whether he’ll be Nigeria’s.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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