ARTICLE: In Nigeria the 25 February “Ross Perot” election may yet run aground 

Plagued by a self-inflicted currency crisis, cash shortages at ATMs, deepening fuel scarcity and still persistent widespread insecurity, the much-anticipated 25 February general election in Nigeria may yet still run aground with 16 days to go.

With public anger boiling against the Central Bank of Nigeria, the federal government and the outgoing president, Muhammadu Buhari, the ruling All Progressives Congress (APC) could suffer a loss of momentum in the last days of the campaign as the public takes its anger out on incumbent politicians.

The $1.3 trillion economy, the 27th largest in the world, is suffering from an acute shortage of cash, prompting a run on ATMs and banks, and a virtual breakdown of normal commercial transactions in Nigeria, Africa’s most populous nation.

An analysis of daily financial transactions (see chart below) conducted by DaMina Advisors seems to indicate that “APC-aligned states” are more vulnerable to the ongoing financial challenges than opposition-aligned states (which are marginally wealthier), and may punish the APC, particularly in the strongholds Lagos, Kano and Kaduna.

With a runoff virtually guaranteed due to the strong support garnered by a third-party candidate, the risk that the ruling party candidate enters the runoff in a significantly weak position is growing, as turnout in APC strongholds may fall by double digits.

Despite assurances by Nigeria’s electoral body – promising fidelity to the electoral timetable – there is a very high risk that the polls could be rescheduled at the eleventh hour, or even ultimately annulled, if significant sections of the country are not able to cast their votes due to logistical difficulties experienced by the election body in supplying ballots.

Much like what happened in 1993, there is a growing risk that the 25 February polls could be aborted at the eleventh hour, or the disputed results ultimately annulled.

This article was published by DaMina Advisors, a pre-eminent, independent, Africa-focused frontier markets risk research, due diligence and M&A transactions consulting and strategic advisory firm. Sebastian Spio-Garbrah is its chief analyst for frontier markets.

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