Wednesday, 22 April 2015

Nigeria's Niger-Delta holds the Key to Stability in Nigeria.

President- Elect ; Gen. Buhari;( Photo : APC Fb )
Voters have provided the opposition APC with clear majorities in both Houses of the National Assembly, which will be crucial to implement the new government’s legislative agenda over the next four years. Spurred by its national success, the APC also fared well in 11 April’s governorship and state assembly elections, winning 19 of the 28 governor posts. These wins also reduce the PDP’s political relevance for the time being to the oil-rich Delta.
However, where the election results leave Nigeria in terms of future economic policies still remains unclear. During the campaign, the APC was careful to avoid any commitment to concrete policy initiatives. The party still has to prove that it maintained silence over these issues to avoid distraction from Mr Buhari’s trademark themes of security and corruption - rather than for lack of a shared vision between its northern and south-western power blocks.
Regardless of the dearth of economic policies, investors should focus attention on developments in the Niger Delta. For good or bad, this region will take centre stage for two reasons. First, in the short- to mid-term, the government will continue to depend on the region’s oil and gas for about 70 percent of its budget, including capital expenditure for infrastructure investments and other measures stimulating the economy. Second, the Delta will also prove essential in moving the economy away from oil and gas dependence in the long-term.
Niger-Delta Militants (Fb photo)
Investors should also set a watchful eye on a government amnesty programme for Niger Delta militants scheduled to run out at the end of this year. Under the programme initiated in 2009, lucrative security contracts had been awarded to key militant leaders while about 30,000 rank and file militants benefited from vocational training and monthly cash payments.
The programme was successful in curbing direct attacks on oil and gas installations, which had dented Nigeria’s yearly production during the early 2000s by up to 50 percent. However, it came at the hefty price tag of $14bn between 2010 and 2014, which will be difficult to sustain in times of fiscal austerity.
The key for Mr Buhari to sustain his spectacular election victory and lead Nigeria on a path of sustainable economic development lies in the Niger Delta. Mr Buhari will need to use political guile and diplomacy to ensure smooth cooperation with the region’s PDP governors, and to prevent the delta from sliding back into an armed insurgency. The task is all the more formidable as money, which traditionally oils the wheels, is becoming an increasingly scarce resource.
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