Fitch: A Tinubu Presidency will Increase Social Instability in Nigeria

*Predicts victory for him, doubts his ability to end fuel subsidy regime

Ahamefula Ogbu

A Fitch Solutions Country Risk and Industry Research report released on Thursday has predicted victory for the candidate of the All Progressives Congress (APC), Bola Tinubu, in the 2023 presidential election.

However, the report on the Nigerian presidential election, done by a subsidiary of international credit rating firm, Fitch Ratings’, projected that the victory will lead to protests and social instability in the country because of the Muslim-Muslim ticket and the expectations of the followers of Labour Party’s candidate, Peter Obi, that will be dashed.

It stated that notwithstanding some polls putting Obi ahead of other contestants, Tinubu will still emerge winner in the February contest.
The report said, “Indeed, we maintain our view that the ruling party’s Bola Ahmed Tinubu is the candidate most likely to win the presidential election as a split opposition vote will favour the APC.

The report predicted further that “Protests and social discontent are likely to ramp up in the aftermath of a Tinubu win since this would end the recent trend of the presidency alternating between Muslims and Christians.”

The Fitch Solutions Country Risk report stated additionally that Tinubu’s victory would usher in social unrest based on several factors like religion, owing to the Muslim-Muslim ticket under which Tinubu would emerge and the reaction of Obi’s supporters who are mainly youths.

The report states: “Since Nigeria’s return to democracy in 1999, there has been an informal agreement that resulted in the presidency alternating between Northern and Southern states, as well as between Christians and Muslims. A win for Tinubu would break with this unwritten tradition and likely fuel sentiment of perceived marginalisation among Christians.

“In addition, Obi’s supporters – mostly young, urban voters – are likely to question the fairness of the electoral process, especially after recent polls have predicted a win for Obi. These dynamics are likely to engender political unrest following the February vote. “As a result, we have revised down the Social Stability component of our proprietary Short-Term Political Risk Index (STPRI) from 30.0 to 25.0 previously (scores out of 100; lower score implies higher risk). This brings Nigeria’s overall STPRI score from 46.3 to 45.0. Social Stability Remains.”

The research stated that though previous polls had put Obi ahead of other rivals, the fact that it was conducted online and going by World Bank records, only 36 per cent of Nigerians use the online space and access which limits its spread among those to decide the winner of the election, the surveys were therefore not widespread and therefore unreliable.

“Surveys showing that Obi is ahead of his opponents, Bola Tinubu (APC) and Atiku Abubakar (PDP), were mostly based on responses gathered online. Since only 36.0% of Nigerians use the Internet (World Bank, 2020), we believe that these results are skewed towards urban, affluent voters who are most likely to support Obi. We also highlight that these polls suggest that a large share of voters remain undecided,” the research said.

Explaining the reason behind their conclusion that Tinubu would triumph over other candidates, Fitch said Obi lacked support in the Muslim North where it claimed majority of the voters are located and where also turn out on elections were higher than other part of the country.

It opined that since the 1999 Constitution provides for a candidate scoring highest number of votes, as well as securing 25 per cent  of votes in at least 24 states of the federation, and “it would be herculean for the Labour Party which lacks structure and not having candidates for most of the positions for state Assemblies, House of Representatives, Senate and governorship, to deliver above those that have stakes for such positions.”

Fitch continued on Obi and the LP: “Furthermore, the northern electorate historically tends to vote for presidential candidates from their region. With Obi being a Christian from the South (Anambra State), increasing his voter share in the North will prove challenging.
“While we believe Obi is unlikely to win the election, he will probably do well for a third-party candidate. Indeed, a third-party candidate has never reached more than 7.5% of votes in Nigeria. However, due to his frugal reputation and large social media following, we expect Obi to get a higher share of the vote than previous third-party candidates.

“As such, we believe that Obi’s popularity will most likely split the opposition vote, at the expense of the PDP. The PDP’s candidate (Atiku Abubakar) is a Northerner and we believe that the party’s only route to victory is expanding its vote in the South-west and North-central states, while retaining large majorities in the South-south and South-east.

“However, given Obi’s popularity in the south – especially the South-south and South-east – we believe it is unlikely the main opposition party will be able to gain more votes in these parts of the country. Indeed, we maintain our view that the APC’s Tinubu is best placed to win the presidential election. We expect that the party, which has nominated a Muslim-Muslim ticket, will repeat its strong performance in the North. Given that Tinubu is a former governor of Lagos, the party is also likely to improve on its performance in the South-west. Furthermore, we expect Tinubu to benefit from incumbency advantages, with the APC having been in power since 2015,” it projected.

The report said that though Tinubu promised to end the petrol subsidy regime sapping the economy, it doubted he could implement it due to what it called the appetite of the ruling APC for the free money that accrues from the subsidy.

Fitch reports: “We do not expect significant policy changes under a Tinubu presidency. While Tinubu has stated that he would phase out Nigeria’s costly fuel subsidy, we are skeptical this will happen in the short term. There appears to be limited appetite within the APC to remove the subsidy, and with inflation remaining elevated in 2023 – due to high food prices – the cancellation of the subsidy would negatively affect the new president’s popularity.

“Indeed, the PDP tried to remove the subsidy in 2012, but had to back down after large-scale protests. In addition, we believe that Tinubu’s aim to raise oil production is unfeasible in the short term. Crude production has declined significantly to 1.1mn barrels per day in September – a multi-decade low – due to rising oil theft and previous underinvestment. Given the country’s weak fiscal position, we believe that there will be limited room for more security and social spending to combat oil theft and attract more investment.”

The research, however, noted that factors that could militate against the emergence of Tinubu as President would be if the concerns on his health become more pronounced in the run up to the election proper in which case it might dampen his chances but concluded, “There remains a possibility that a three-way race results in no candidate passing the electoral threshold. This would prompt a second round for the first time in Nigerian history, likely heightening political instability.”

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