• HSBC: Buhari’s second term poses risk to economic devt
Nume Ekeghe, Nosa Alekhuogie in Lagos and Adedayo Akinwale in Abuja
The Economist Intelligence Unit (EIU), the research unit of The Economist Magazine, has predicted that the opposition Peoples Democratic Party (PDP) will defeat the ruling All Progressives Congress (APC) candidate in the upcoming 2019 presidential election.
EIU stated this in its latest country forecast overview on Nigeria that was obtained yesterday by THISDAY.
The EIU, which gave an array of reasons for its prediction, said even though it would be a close call, the opposition PDP would win the election.
It predicted slowdown in economic activities in Nigeria as politics takes centre stage.
The Economist’s report came to light a day after the New Telegraph published another research report by a multinational banking and financial services company, HSBC, which said a second term for President Muhammadu Buhari would gravely stunt the economic development of the country.
Buhari is already preparing for a re-election in February 2019.
A group, Nigeria Consolidation Ambassadors Network (NCAN) had last week purchased N45.5million nomination forms for the president who remained unchallenged as at yesterday. Collection of nomination forms closes today.
The opposition PDP is also in the process of selecting its flag bearer.
With 13 aspirants picking up the N12million presidential nomination forms, the Board of Trustees (BoT) of the party yesterday set up a 12-man committee to liaise with the contestants and work out the possibility of producing a consensus candidate from among them.
The London-based magazine, which also anticipated a depreciation of the naira, said further in its assessment that Buhari was fast shedding support from within the APC with governors and lawmakers defecting to the opposition en masse.
“Intra-party politics would be chaotic ahead of the poll and we ultimately expect the incumbent to lose power,” it said.
According to the magazine, “The 2019 elections will be a close contest between the ruling APC and the PDP. We expect the PDP presidential candidate to win, but for the next administration to flounder against the same problems as the incumbent one.
“The next government is likely to be led by the PDP, the main opposition, potentially in a coalition with smaller parties, but instability will remain an insoluble challenge.
“Internally, not all ambitious politicians from the APC who have defected will be rewarded with places in the next government; or if they are, it will mean that pre-existing grandees within the PDP will have been sidelined.
“Whoever ends up feeling cheated will eventually turn on the new administration, as is happening to the APC now. There is also a unifying PDP presidential candidate, with around 16 aspirants competing for the nomination.
“A weak APC before the election and a troubled government thereafter implies that Nigeria’s manifold security threats will continue to fester.
“Parliamentary rifts will remain the main problem, and this applies no matter who is in charge, given competing priorities between representatives from different regions and the absence of a common ideology within parties.”
Continuing, it noted that policy reforms, particularly in the vital oil industry would be slow as a result of division in the political elite between advocates of tough, unpopular market reforms and those who refer pandering to nationalistic and pro-subsidy interest groups. The latter group was likely to remain in the ascendancy, it added.
According to the EIU, politicisation of economic policy would also slow reforms and at times actively decelerate economic growth.
“The Central Bank of Nigeria will not act completely independently, and the overall policy agenda will be pulled in differing directions by various powerful interest groups,” the report stated.
“Fiscal expenditure will remain dominant by recurrent spending despite attempts to boost capital investments. Efforts to boost non-oil tax revenue will be constraint by weak bureaucratic capacity and low economic growth. Constrained by a crippling infrastructure deficit, economic growth will be well beneath level needed to boost job creation and increasing living standard.
“Inflation will generally remain high over the forecast period (2018-2022) amid expansionary fiscal policy and high food prices stemming from government efforts to limit import and support local producers.
“The authorities will continue to interfere in the foreign exchange market although the degree of interference should eventually lessen with higher oil prices supporting reserves and broad economic confidence slowly improving. The naira will nonetheless depreciate over 2019-21 and be broadly stable in 2022,” the report explained.
Furthermore, the EIU held the view that Nigeria’s current account would record marginal gain over the forecasts period, saying pick-up in oil prices would be offset by recovering import demand.
The difficult business environment will restrict the development of non-oil exports, it added.
The report further pointed out that without a collective resolve, it would prove impossible to bring permanent peace to the large parts of Nigeria hit variously by an Islamist insurgency in the north, ethno-nationalism and piracy in the main oil-producing region and secessionism in the Biafra region, as well as inter-religious tensions and disputes over land access across the centre of the country.
“It will prove hard to build a more effective security apparatus while also creating economic opportunities for local populations; poverty lies at the root of much of the instability.
“Our central forecast is, however, that the 2019 elections will be completed without a widespread breakdown in stability with Nigeria’s democracy proving once again to be robust enough to endure.
“However, we expect major unrest to continue in 2020-2022 as comprehensive solutions prove too complex and costly to implement in the medium term.”
It noted that given the severe risks to stability, speculation over the threat of a military coup or a civil war was likely to surface periodically.
It stated, “That these issues are part of the popular discourse highlights the seriousness of the challenges facing Nigeria, but we consider a widespread breakdown of security to be unlikely; the military is more professional and has been depoliticised since the junta stepped aside in 1999.
“Meanwhile, there is little appetite outside more extremists’ agitators for a return to civil war, given memories of how disastrous the 1967-1970 conflict was for the country.
“Nevertheless, as the country’s leadership struggles to shift Nigeria onto a more sustainable and robust pat of economic development, the risks to stability will intensify as more and more Nigerians question what they have to lose from pushing for violent change.”
HSBC: Buhari’s Second Term Poses Risk to Economic Devt
In its own report, put together by its Global Research Unit, entitled, ‘Nigeria, Papering over the Cracks,’ HSBC said Nigeria’s current economic struggles look set to continue if Buhari wins a second term in office.
According to the financial institution, although the president’s “approval ratings sit near all time lows,” a development, it said, “largely reflects the impact of Nigeria’s painful recession in 2016-17 and the sustained economic hardship that has accompanied his presidency, including rapidly rising joblessness, and poverty,” the president will once again lead the APC into the 2019 elections.
It, however, stated, “A second term for Mr. Buhari raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”
The multinational banking group, which is Europe’s largest by total assets, noted that while higher oil prices have brightened Nigeria’s macro outlook, boosting export earnings, improving the supply of foreign exchange, and supporting naira stability, the Buhari administration was yet to address the economy’s structural shortcomings.
It said, “Economic growth remains sluggish and reliant on the rebound in oil output while the non-oil economy, which accounts for about 90 per cent of GDP, continues to languish with many service sectors still mired in contraction.
“Joblessness continues to rise, up almost three-fold in three years to 19 per cent in Q3 2017, pushing the number in poverty to 87 million. “Meanwhile, current account improvements may have pivoted on higher oil prices, but they also derive from on-going import restrictions and limited FX access for many sectors of the economy.”
PDP BoT Sets Up Committee to Pick Consensus Presidential Candidate
Perhaps looking to make The Economist forecast real, the BoT of the PDP yesterday revealed that it had set up a 12-member committee to discuss with the party’s 13 presidential aspirants, with the view to picking one of them as consensus candidate.
Those in the race for the presidential ticket of the PDP are, former Vice President, Alhaji Atiku Abubakar; Sokoto State Governor, Mr. Aminu Tambuwal; Gombe State Governor, Dr. Ibrahim Dankwambo; President of the Senate, Dr. Bukola Saraki; former Governor of Jigawa State, Alhaji Sule Lamido; former Governor of Kaduna State, Senator Ahmed Makarfi; and former Minister of Special Duties and Inter-governmental Affairs, Alhaji Tanimu Turaki (SAN).
Others are: former President of the Senate, Senator David Mark; former Governor of Kano State, Senator Rabiu Kwankwaso; former Governor of Sokoto State, Alhaji Attahiru Bafarawa; former Plateau State Governor, Senator Jonah Jang; Mr. Stanley Osifo and Dr. Baba Datti Ahmed.
The BoT had last week met in Abuja where they said they were working to ensure that they reduce the increasing number of presidential aspirants, but noted that they would not force any aspirant to step down.
However, the Chairman of the BoT, Senator Walid Jibrin, in a text message to THISDAY said that the committee would impress it on the aspirants, the dangers inherent in having such a large number of them in the race.
He stressed that the committee would not compel any of the aspirants to withdraw from the race, but rather they would be persuaded to put the interest of the party above their personal interests and ambitions.
Jibrin, who admitted that the present number of aspirants was complex, noted that there were fears that there could be disagreement among the contestants that could lead to major divisions after the primaries.
Governors’ Forum to Meet with Presidential Aspirants
Also yesterday, the PDP Governors’ Forum resolved to have an all-inclusive meeting with all the presidential aspirants, the National Chairman of the party, two national officers, as well as the leaders of the party in both chambers of the National Assembly.
The forum, in a communiqué issued yesterday and signed by its Chairman and the Governor of Ekiti State, Mr. Ayodele Fayose, at the end of an emergency meeting it held between September 9 and 10, 2018 in Abuja, also condemned what it called the suspicious payment of N16 billion to Osun State purportedly from the Paris Club Refund, saying it believed that the money was meant to ‘fund corrupt inducement of voters’ in the forthcoming governorship election in Osun State scheduled for September 22, 2018.
It decried alleged use of security agencies to perpetrate electoral fraud as it happened in Ekiti, Osun and Rivers State and urged the security agencies to be non-partisan in the performance of their duties in accordance with the provisions of the constitution.