Nigeria's President Fights for His Political Survival

Strikes and militants threaten Nigeria’s economic reforms

Goodluck Jonathan won Nigeria’s presidency in 2011 with a pledge to transform the economy of Africa’s biggest oil producer by attracting foreign investment and fighting corruption. The election of the mild-mannered zoologist and economic reformer, after years of ethnic and political unrest, created much optimism among economists. In June, Morgan Stanley’s Africa-based team of economists published a report forecasting that Nigeria would overtake South Africa, the region’s biggest economy, by 2025. And in December, International Monetary Fund Managing Director Christine Lagarde said she was “extremely impressed” with “the energy and pace” of Jonathan’s efforts to diversify the economy.

As 2012 unfolds, Jonathan, 54, is fighting for his political survival. A weeklong general strike in January mobilized millions against his decision to remove fuel subsidies that cost the government about $8 billion last year and ultimately forced the President to step back. The move would have more than doubled prices at the pump and sparked outrage among Nigeria’s 164 million citizens, 64 percent of whom live on less than $1.25 a day, according to the UN. Then came a series of attacks by Islamist militants that killed as many as 256 people in the northern city of Kano.

Jonathan is having difficulty delivering on his broader economic agenda. That includes reducing corruption inside the oil industry while attracting foreign investment to fund other parts of the economy such as power plants, agriculture, and roads, bridges, and railways. Jonathan, a member of the People’s Democratic Party, “is fighting political battles on all fronts, and at the moment he seems to be losing all of them,” says Sebastian Spio-Garbrah, managing director of DaMina Advisors, a risk advisory firm in New York.

A Christian from the oil-rich Niger River Delta in the south, Jonathan was vice president when his predecessor, Umaru Yar’Adua, a northern Muslim, died on May 5, 2010. After almost a year as President, Jonathan won an election in April 2011 that international and Nigerian observers said was the fairest since the end of military rule in 1999. He isn’t your typical tough-guy Nigerian pol: He has a PhD in zoology and a Facebook fan page. “We were all very excited because he was different from leaders in the past, he had a different background, he was younger; this man could do something,” says Fatima Ali, 33, the owner of a garment factory in Kano. “Things have gone from zero to minus 10.”

Jonathan has declared a state of emergency in parts of the north and says the militants pose a worse threat to the West African nation than did the 1967-70 Biafra civil war. “My administration is taking every measure necessary to speedily tackle this problem,” Jonathan said in a speech to the Jan. 29-30 African Union summit in Addis Ababa.

An Islamic sect known as Boko Haram, whose name means “Western education is a sin,” favors the adoption of strict Sharia law and has attacked government offices and churches across the Muslim north. The militant group has told Christians to leave the region and has killed 935 people since the start of its campaign in 2009, more than a quarter of them this year, according to New York-based Human Rights Watch.

Nigeria may be oil-rich, but its refineries operate below capacity. Jonathan had argued that by cutting subsidies and letting domestic fuel prices rise, the refining companies would attract enough investment to upgrade so that Nigeria would no longer have to import about 70 percent of its gasoline and diesel fuel. The lower house of the National Assembly voted that he reinstate the subsidy, and political reform groups such as the Campaign for Democracy that once supported Jonathan deserted him, especially after he deployed army troops to quell the protests. At least eight people died in the demonstrations. The strike ended after Jonathan agreed to cap gasoline prices at 97 naira (60¢) a liter (0.26 gallons). “The more he loses public support by pursuing unpopular policies or not acting on issues he should be tackling, the more his ability to get the legislature to give him support for his agenda will be weakened,” says Clement Nwankwo, executive director of the Abuja-based Policy and Legal Advocacy Centre.

So far the violence in the north hasn’t hurt oil production or touched Lagos, the commercial capital. The IMF expects Nigeria’s economy to expand 6.6 percent in 2012, vs. 6.9 percent last year. Jonathan’s biggest challenge, aside from the militants, is convincing Nigerians that reforms, though painful in the short term, will help raise living standards over the long term. Says Ashley Elliot, a London-based Nigeria analyst at global risk consultant Control Risks: “After decades of shattered promises, today’s generation has difficulty believing in the Nigerian state as an agent of development.”


    The bottom line: Nigeria is oil-rich but needs foreign investment to improve economic conditions. More than 60 percent of Nigerians live on $1.25 a day.

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