| LAGOS, April 1
LAGOS, April 1 Elections in April could hand
Nigerian President Goodluck Jonathan a stronger mandate for
reform but, even if he wins, the make-up of the new government
and parliament will be key to his ability to effect change.
Jonathan is the front-runner in the April 9 presidential
vote but the ruling party will face a tougher battle maintaining
its strong majority in parliamentary elections on April 2 and
its regional dominance in state governorship polls on April 16.
Graphic on elections: link.reuters.com/xet78r
For more stories, background and analysis: [nLDE68H051]
Key pieces of legislation, including oil sector reforms and
the creation of a sovereign wealth fund, are sitting before
parliament and if they fail to pass before the current term
finishes at the end of May, they could be delayed for months.
Government spending has risen ahead of the elections,
putting pressure on foreign reserves and weighing against
efforts to drag inflation into single digits. [nLDE72S213]
The finance ministry and parliament are at odds over a 2011
budget which keeps spending at last year's record levels.
The banking sector is emerging from crisis, with state "bad
bank" AMCON having soaked up all non-performing loans, but
capital markets reforms could be slowed down if a less
reform-minded government follows the elections. [nLDE72M0ZA]
Preparations for the polls themselves give grounds for
cautious optimism that they could be more credible than the
deeply flawed elections of the past, although there has been
election-related violence around the country.
Jonathan's victory at the primaries makes him the favourite
to win the April 9 presidential election. The ruling People's
Democratic Party (PDP) has won every poll since military rule
ended in 1999. [nLDE70J14V]
His main opposition challenger is Muhammadu Buhari, running
on the Congress for Progressive Change (CPC) platform, a former
military ruler who is hoping to capitalise on opposition to
Jonathan from the Muslim north.
Former anti-corruption chief Nuhu Ribadu, whose Action
Congress of Nigeria (ACN) party has a strong following in parts
of the southwest, and Ibrahim Shekarau, governor of the northern
state of Kano, are also vying for the presidency.
Jonathan must win an overall majority and at least 25
percent of the vote in two thirds of the country's 36 states to
secure a first round victory. The opposition candidates are
hoping their regional strengths can combine to force a run-off.
The Independent National Electoral Commission (INEC) says it
has registered more than 70 million voters in a process which,
although marred by some technical difficulties, has generally
been judged by observers to bode well for polling itself.
What to watch:
-- Any signs of an opposition alliance to challenge the PDP
-- Any challenges to the credibility of the new voter lists
Parliamentary elections and state governorship polls are due
to be held a week either side of the presidential vote and are
more likely to cause localised instability. [nLDE6AM2BY]
Five of Nigeria's powerful PDP state governors won a court
ruling in February which could prevent them having to stand for
re-election. The five argued that their states should be
exempted from governorship votes because they had not yet
completed full four-year terms. [nLDE71M20A]
INEC has said the ruling stands unless overturned in the
courts, but opposition candidates have continued to campaign in
the hope that the votes will go ahead.
Flashpoints include the state of Akwa Ibom on the fringe of
the oil-producing Niger Delta, where rioting killed at least
four people in March and the opposition governorship candidate
has been arrested. [nLDE72U25H]
In Bayelsa state in the Niger Delta, a bitter rivalry
between state governorship candidates Timi Alaibe, a former
presidential adviser, and incumbent Timipre Sylva has already
triggered violence. [nLDE70C1TM]
Several hundred have died in ethnic and religious clashes in
Plateau state in the central Middle Belt since December,
violence likely to be exacerbated by the polls. [nLDE71G0J3]
And in the remote northeast, a wave of killings of police
and local leaders by militant Islamist sect Boko Haram has
increasingly targeted politicians. One of Borno state's main
governorship candidates was gunned down. [nLDE70R1VY]
What to watch:
-- Parliamentary polls will be a litmus test for how well
INEC and the security forces will handle the elections
-- Challenge to the court ruling stopping governorship
elections in some states
POLICY AND SPENDING
The political uncertainty also means major pieces of policy
-- and the multi-billion dollar investment decisions that hinge
on them -- are likely to be on hold until after the elections.
Arguably the biggest is the Petroleum Industry Bill, which
will re-write Nigeria's decades-old relationship with foreign
oil firms and redefine the fiscal and legal framework governing
investment, including in its key offshore fields, expected to
yield most of its future production growth. [nLDE71L1SW]
The government has vowed the bill will pass before the end
of the current administration at the end of May. Should it fail
to do so, a new parliament could set the process back once
again, particularly if the ruling party has a slimmer majority.
Potential investors in the planned privatisation of the
domestic power sector, one of the cornerstones of President
Jonathan's campaign, are also unlikely to go beyond statements
of interest until the elections are over. [nLDE70H1SX]
Government spending has been rising in the run-up to
elections. Government borrowing had increased around 50 percent
by late 2010, dwarfing private sector credit growth of just 3
percent in the year. [nLDE6AM1P0]
Foreign exchange reserves have started to stabilise but
remain nearly a quarter below year-ago levels, although oil
prices and production are rising.
Parliament approved a 4.972 trillion naira ($32 billion)
budget in March, increasing planned spending by close to 20
percent from President Jonathan's initial proposal in December
and taking it almost up to last year's record level.
Finance Minister Olusegun Aganga has called the plans
"unimplementable" and pledged to talk with legislators.
There has been heavy pressure on the naira currency NGN=D1
in the run-up to the elections, but the central bank has said it
is determined to maintain exchange rate stability and has
introduced forex forwards to try to smoothen demand.
What to watch:
-- Passage, or not, of oil reforms before end of May
-- Revision of the 2011 budget
(For full Reuters Africa coverage and to have your say on the
top issues, visit: af.reuters.com/ )
(Writing by Nick Tattersall; Editing by Giles Elgood)