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 which was made public on Tuesday.
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 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.
“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,” it said.
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.”
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.”
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