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Economy | Reviews & Outlooks

Outlook 2023 - Nigeria Beyond the 2023 General Elections

Feb 08, 2023   •   by Proshare Research   •   Source: Proshare   •   eye-icon 697 views

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  1. The Many Faces of Nigeria in 2023: Understanding the Economics of Change
  2. Report Summary: 2023 Macro Economic Outlook - The Many Faces of Nigeria in 2023: Understanding the Economics of Change


Given the complexities and present realities of the country, it will not be a tea party for the next President of the Federation. But what really do Nigerians expect from their next President?                                                 -THISDAY

 

Nigeria’s 2023 Election: A Peek at the Frontline Presidential Candidates 

All things being equal, Nigerians will be at the poll in February 2023 to decide the next set of leaders who will control both the social and economic trends of the country. Although there are thirty-six (36) candidates, based on the Independent National Electoral Commission’s (INEC) list for the 2023 presidential election, analysts say four major candidates are competing to lead the country for the next four years. This includes candidates of the ruling All Progressive Congress (APC), the People’s Democratic Party (PDP), the Labour Party (LP), and the New Nigeria Peoples Party (NNPP). The election is expected to be keenly contested given the diversity of the candidates in ethnicity, religion, and orientation. Unlike the 2019 poll which saw ethnicity and religion as lesser factors given that the two major candidates then were from the same Fulani ethnicity and Muslim religion, the 2023 presidential poll is a contest among three major ethnic groups- Yoruba, Fulani, and Igbo. Howbeit, analysts expect the decisions of voters to reflect a little ethnic affiliation, but more of monetary gains in some cases and frustration in other cases. 

 

Political uncertainty naturally discourages investors. However, the dynamics and orientations of the current presidential candidates on macroeconomic issues have garnered the interest of the broad spectrum of the business ecosystem in Nigeria. Although with a few areas of convergence, such as the removal of subsidies and increasing productivity, the presidential candidates have shown different tendencies on major issues. Analysts expect these tilting, detailed in their respective manifestos, to strongly influence the choice of the candidate among business and professional services communities (see illustration 8 & 9 below). 

 

Illustration 8:

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Illustration 9:

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Nigeria’s Macroeconomic Challenges VS Plans of Presidential Candidate 

Nigeria’s next president will have four major macroeconomic issues to resolve. The country currently faces a twin problem of high unemployment and high inflation, depressing living standards while raising the cost of living. Nigeria also faces a huge infrastructure deficit and a theft-induced plunge in the oil sector.  Security crisis across all regions of the economy is another challenge for the incoming leaders of Nigeria. Analysts review these challenges and the capacity of major presidential candidates to address these challenges as detailed in their manifestos.  

 

In terms of economic growth, Nigeria’s macroeconomic indicators have consistently painted a picture of a grim and worrisome economy with unimpressive indexes, including slow growth, high unemployment, high inflation, a negative balance of trade, and dwindling oil production, among others. Most economic forecasts see a further strain in 2023. Major presidential candidates are offering different approaches to spur the growth of the Nigerian economy. Bola Tinubu intends to boost growth through industrial activities while Atiku Abubakar intends to leverage private sector players to spur growth. Both plans are good together but not in isolation. Whereas the private sector can aid the industrialization process, it requires policy support from the government to thrive and be sustainable. As much as Peter Obi intends to pursue a diversified economy with agrarian revolution and industrialization, there would be a need to spur domestic demand for domestic goods to be successful. Analysts say the target of the Rabiu Kwankwaso is rather too optimistic for Nigeria at this time. Achieving single-digit inflation and unemployment with steady GDP growth seems rather impossible given the growth-inflation trade-off. 

 

Nigeria’s oil and gas industry suffers from two major challenges: crude oil theft in the upstream segment and subsidy regime in the downstream oil segment. Although most presidential candidates have expressed readiness to remove the subsidy and curb crude oil theft upon winning the election, they differ in approach and endgame. Almost all the presidential candidates plan to tackle large-scale oil theft with the deployment of modern technologies and engagement. In line with the proposition of a few candidates, Analysts say the full implementation of the PIA 2021 could offer some respites. On the fuel subsidy, Bola Tinubu of the APC seems to have the most articulated plan to remove and utilize the subsidy funds for social goods. Analysts have raised concerns about the private sector-led model of Atiku Abubakar, arguing that his capitalist model may be taken to the extreme. On the flip side, analysts expressed little worries for Peter Obi of the LP’s intent to incentive the mid-stream segment of the petroleum sector by facilitating gas processing plants and privately-owned small and medium-scale boutique refineries. With no specific disclosure on the subsidy regime, Rabiu Kwankwaso intends to review the subsidy regime. Analysts believe he might intend to maintain the subsidy regime. 

 

Despite the commitment of the Buhari Administration to building infrastructure, Nigeria has a huge infrastructure gap, valued at US$170bn annually. For the presidential candidate of the Labour Party, Nigeria needs an expansive and world-class infrastructure for efficient power supply, rail, road, and air transportation, and pipeline network, through integrated public-private partnerships, and entrepreneurial public sector governance. He plans to leverage corporate tax credit, philanthropy, and community-based infrastructure bonds for infrastructure funding. APC candidate also intends to attract private sector investment and international partnerships in funding infrastructure. The PDP candidate plans to establish an Infrastructure Debt Fund to primarily mobilize domestic and foreign resources for financing large-scale infrastructure.  Analysts say the infrastructure funding models of some candidates are rather too ambiguous and lack specifics, albeit all candidates agreed some forms of the Public-Private Partnerships (PPP) model are required for funding large-scale infrastructure.  

 

Kidnapping, banditry, herder-farmer crisis, terrorism, militancy, armed robbery, and extrajudicial killings are but a few of the issues of insecurity in Nigeria. This is further compounded by the lack of socioeconomic well-being of Nigerians. The presidential candidate of the LP seems to have an extended list of measures to secure Nigeria, including technologies, community engagement, state police, institutional reforms, and legal framework. In the same manner, the APC candidate plans to replicate his security efforts in Lagos state, including bolstering security forces, redefining military doctrine and practice, integrating the national identity database, repositioning the police force, and prioritizing international collaboration. Although the PDP presidential candidate intends to adopt the UAE security model, which is based on adopting technologies to monitor activities, critics say his policy on an open economy would further worsen insecurity. In a rather more holistic approach, the NNPP candidate plans to scale the size and capacity of security institutions, secure the socio-economic well-being of Nigerians, collaborate with neighbouring countries for sustainable security, and make enlistment easier. Analysts have consistently argued that a good approach to deal decisively with insecurity in Nigeria is to consider the multidimensions of the insecurity, including economic uncertainty and food insecurity of Nigerians, among others. 

 

Taken in isolation, the plans of presidential candidates may fail to deliver the needed resolutions to Nigeria’s macroeconomic challenges. Analysts believe the integration of these plans would better strengthen the policies and programs of the next administration. 

 

People’s Perception of Presidential Candidates’ Plans 

In a survey conducted by Proshare Research, Nigerians were asked to identify the presidential candidate most likely to initiate socioeconomic reforms in the run-up to the 2023 presidential election. The survey, conducted over three (3) weeks, recorded hundreds of respondents with interesting pivots to the data. 

 

The survey shows that the Labour Party candidate, Peter Obi, is likely to offer more radical and aggressive policy reforms across sectors with average support of 64%. He is followed by the presidential candidate of the ruling All Progressive Congress, Bola Tinubu who was able to gather an average support of about 24%. The poll seems to suggest that the presidential candidates of both the People’s Democratic Party, Atiku Abubakar, and the candidate of New Nigeria Peoples Party, Rabiu Kwankwaso are unlikely to drop notable reforms.

 

While acknowledging that the poll reflects the social media presence and management of some candidates, it is also indicative of the perceptions of Nigerians, especially the youths on which presidential candidate is like to drive the needed socioeconomic reforms for shared prosperity.  However, it should not be seen as a conclusive confirmation of a candidate’s electability or verified capacity to resolve the issue raised (see table 2 below). 

 

Table 2:

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