The Economist Intelligence Unit (EIU), the research unit of The Economist Magazine, has predicted that the presidential candidate of the Peoples Democratic Party (PDP), Alhaji Atiku Abubakar, will defeat President Muhammadu Buhari of the ruling All Progressives Congress (APC) in the 2019 presidential election.
This prediction is coming as the Governor of Kogi State, Mr. Yahaya Bello, on Wednesday night in Abuja, told President Buhari and the APC that the PDP “will not be a push over” in the general elections.
The Economist’s forecast came less than two months after it had earlier predicted that Buhari would lose the election.
The EIU made the latest prediction in its country report on Nigeria, dated October 17, which was obtained yesterday.
The London based magazine said, “The Economist Intelligence Unit expects that the President, Muhammadu Buhari, will lose power at the February 2019 elections and that the next government will be led by Atiku Abubakar of the PDP, although his administration will be fragile.
“Mr. Buhari is the APC’s presidential candidate and his main challenger is Mr. Abubakar, who was recently nominated PDP’s candidate with overwhelming backing from the party.
“Abubakar’s pledge is to reinvigorate the economy with pro-market reforms. Both candidates are from the northern Nigeria, where Buhari’s support base lies, presaging a fierce contest there.
“With the vote likely to be split in the North, Abubakar will find it easier to garner support from the country’s south, which has traditionally been a safe haven for the PDP.
“This gives Abubakar an edge, as does popular frustration over the rise in joblessness and poverty (two of the biggest voter concerns) on Mr. Buhari’s watch, as well as growing insecurity in central Nigeria.
“Nonetheless, strong incumbency advantages in Nigeria imply that it will be a tight race.
“If Abubakar loses – a distinct downside risk to our forecast – there may be a rejection of the result by the PDP, which is convinced that election will be rigged.
“In this scenario, a state of national paralysis could arise with severe national security implication.”
The EIU, which gave an array of reasons for its prediction, also noted that without a party system based on shared principles, it would be difficult to overcome Nigeria’s multi-layered security threats.
It added that instability and legislative paralysis would affect many aspects of the economic forecast.
EIU anticipated that the policy reform of the predicted winner would be based on pro-market measures and diversification of the economy away from oil.
However, it stressed that progress in this area would be hampered by vested interests, ideological opposition and bureaucratic inefficiency.
In its five-year outlook on Nigeria, the EIU projected that Nigeria’s growth rate would average 2.7 per cent per annum between 2019 and 2023.
“We forecast that currency depreciation will keep annual inflation elevated at an average rate of 13.9 per cent in 2019 -2020.
“Following this will be a period of disinflation in 2021- 2023 as the naira stabilises. Export growth will be slower in 2019-2020, as oil prices dip in these years, than in 2021-2023, when world crude prices are expected to rise. Import demand will also be held back in 2019-2020, as the naira depreciates before picking up in 2021-2023 as the currency stabilises,” it added.
Furthermore, the EIU predicted “ongoing severe outbreaks of instability, given slow progress on tracking numerous security and societal challenges at a time of economic difficulty.”
According to the report, with tight national elections expected in 2019, the ruling APC would be focused on intra-party politics and security concerns would be sidelines.
“The election period itself will be a time of high risk; as a recent election in Osun demonstrated, small scale violence at the polls is highly likely, as is disputation of the results.
“Parliamentary rift 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 common ideology within parties.
“Without a collective resolve, it would prove impossible to bring permanent peace to the large parts of Nigeria hit variously by an insurgency in the north, ethno-nationalism tensions and disputes over land access across the centre of the country.
“It will prove to be hard to build a more effective security apparatus while also creating economic opportunities for local population; 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 of stability – with Nigeria’s democracy proving once again to be robust enough to endure.
“Given the severe risks to stability, speculation over the threat of a military coup or a civil war is likely to surface periodically.”
Continuing, the EIU stated: “Nevertheless, as the country’s leadership struggles to shift Nigeria into a more sustainable path to economic development, the risks to stability will intensify as more Nigerians question what they have to lose from pushing for violent change.”
In terms of its medium term outlook for Nigeria’s fiscal policy, it projected that it would centre on attempt to diversify the country’s sources of revenue away from oil while directing more expenditure to pro-poor activities and infrastructure investments. Non-oil revenue will rise because of efforts to widen tax coverage and collect overdue taxes, but from a low base and over a longer time period than projected by the government, it added.
“Although higher oil prices will give some reprieve, longer-term public sustainability will remain in doubt. Monetary policy will also concentrate on bolstering economic recovery while limiting inflation and maintaining currency stability.
“However, this will generate contradictory pressure in the early part of the forecast period. The private sector is desperate for cheaper credit to spur growth, but inflation will be running higher than the targeted upper limit of nine per set by the Central Bank of Nigeria and monetary tightening in the US will threaten to put pressure on the naira if a looser stance is adopted.
“On balance, interest rates will not move much in 2019, but they will dip in 2020 as the wider global economy slows and monetary authorities attempt to stimulate, with Nigeria following suit.
“The economy will for the most part be mired in a low-growth cycle, although there will be improvements over time.
“In 2019, what are expected to be fiercely contested elections in February will hold back business and consumer confidence that year, and although markets are likely to approve of Mr. Abubakar’s economic reform agenda – meaning the disruption is likely to be short-lived- we forecast a growth rate of 1.9 per cent – the lowest rate of growth in our five-year outlook period,” it added.
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