Patronage politics boosts demand for dollars in Nigeria

Date:

M

Thank you for reading this post, don't forget to subscribe!
The merger of Nigeria’s four main opposition parties could pose a big threat to Goodluck Jonathan
The merger of Nigeria’s four main opposition parties could pose a big threat to Goodluck Jonathan

anaging a monetary system is hard work in any country. But in Nigeria, Lamido Sanusi, central bank governor, has an additional problem: a surge in US dollar demand as politicians build war chests for an election still 18 months away.

The stakes ahead of the presidential 2015 poll, in which President Goodluck Jonathan is likely to seek re-election, have risen after a split of the ruling party and the merger of the main opposition parties in February.

With patronage so tied to political fortunes in Nigeria, the cash appears to have started flowing far earlier than usual. Explaining the decision to keep interest rates unchanged last month at 12 per cent, Mr Sanusi noted unusually high domestic pressure for hard currency.

“This non-import-related demand was attributed to the build-up in political activities,” he said.

The largest local currency note is 1,000 naira ($6.24), so politicians find US dollars easier to carry and distribute to people they seek favours from.

Foreign investors and local businessmen are closely watching the developments. Oscar Onyema, chief executive of the Nigeria Stock Exchange, says the equity market “is beginning to react [to the elections] way earlier than usual”.

If previous elections are a guide, economic growth could accelerate over the short term as patronage boosts spending. But the reform programmes will slow down as politicians focus on winning the election.

A diplomat in the capital Abuja said: “The outlook for the next 18 months is more politics and less governance.”

The early election activity is a result of the shake-up in Nigeria’s political landscape this year. Since the end of military rule in 1999, the People’s Democratic party has dominated government and supplied all three presidents, including Mr Jonathan. Not only was it the richest party but also the only one with a national reach.

That changed with the emergence this year of the All Progressives Congress (APC). Formed through the merger of the three main opposition parties – the Congress for Progressive Change, the Action Congress of Nigeria and the All Nigeria People’s party – the new group draws on support from across the country.

Opposition politicians such as Nasir el-Rufai, a former government minister who is now deputy national secretary of the APC, said there has been a presumption that the ruling party in Nigeria cannot lose. “But now we have the concentration of firepower of three different parties, and are confident we can beat the PDP.”

It may be tough for the APC to decide on a presidential candidate acceptable to all the merged groups, but analysts believe that it can present a genuine challenge to the ruling party.

I have real fears for this country in 2015. If Goodluck Jonathan wins, there can be problems in the north. If he loses, there can be trouble in the part of the south where he is from– Kole Shettima, chairman of the Centre for Democracy and Development

The emergence of a strong opposition party is positive for Nigeria’s democracy, say foreign observers. But the Abuja-based diplomat said it also spells an increase in “the downside risks, including dirty tricks and violence” during the election campaign.

Losing power in Nigeria means losing access to vast revenues, especially from the opaque oil sector. It also raises the chances of being prosecuted should any new government decide to crack down on graft.

Though President Goodluck Jonathan can point to achievements since taking office in 2010, notably the privatisation of the power sector, his performance is widely considered to be lacklustre, especially on tackling corruption and insecurity.

But the president’s main problem could actually be his desire for another term. His party has a rule designed to keep ethnic and religious balance: the presidency should rotate every two terms between the Muslim north and the mostly Christian south.

The most recent northern president, Umaru Yar’Adua, died before finishing his first term, allowing Mr Jonathan, a southerner, to take over. Northern politicians believe the next presidential candidate should be from the north to restore the equilibrium lost after the death of Mr Yar’Adua.

The north-south balance is a delicate matter that has some Nigerians worried, including Kole Shettima, chairman of the Centre for Democracy and Development, a think-tank in Abuja. “I have real fears for this country in 2015. If Goodluck Jonathan wins, there can be problems in the north. If he loses, there can be trouble in the part of the south where he is from,” he says.

Discord within the PDP boiled over in August, when seven of the party’s 23 state governors broke ranks. By creating a faction they named “New PDP”, they have eroded the PDP’s strong legislative majority and its control over the powerful state governors, who oversee large budgets.

Mr Jonathan reacted by sacking nine ministers a move seen by many as trying to shore up loyalty in the party.


Discover more from Naija247news

Subscribe to get the latest posts to your email.

Babatunde Akinsola
Babatunde Akinsolahttps://naija247news.com
Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

Share post:

Subscribe

Popular

More like this
Related

Jose Mourinho Emerges as Frontrunner for Chelsea Managerial Role

  Jose Mourinho, the renowned football manager, has become the...

Burna Boy Ventures into Filmmaking as Executive Producer of ‘3 Cold Dishes’

Grammy Award-winning artist, Damini Ogulu, popularly known as Burna...

NNPC Ltd and Schlumberger (SLB) Forge Alliance to Enhance Upstream Operations

NNPC Energy Services Limited (EnServ) and Schlumberger (SLB) have...

Google Unveils Umoja Submarine Cable Connecting Africa and Australia

  Google is constructing a new submarine cable, Umoja, to...

Discover more from Naija247news

Subscribe now to keep reading and get access to the full archive.

Continue reading