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NIGERIA: Muhammadu Buhari’s Victory; Now He Faces Huge Economic Challenges

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Muhammadu Buhari today became the first opposition candidate to win a Nigerian presidential election. Incumbent Goodluck Jonathan conceded defeat in what Nigerians are celebrating as a democratic election process.

He’ll be taking over some big headaches. The largest ones facing the Nigerian economy include security, oil prices, currency, corruption and inequality,  CityA,M. reports.

Buhari, 72, was more than 2 million votes ahead of his rival when the All Progressives Congress received a call from Jonathan congratulating him on victory. Results had been declared in 35 of Nigeria’s 36 states, except for Borno, seen as an APC stronghold, BBC reports.

Buhari supporters in the northern cities of Kano and Kaduna sang and danced in the streets in celebration, according to BBC.

Observers have generally praised the election but there have been allegations of fraud, which some fear could lead to protests and violence, BBC reports.

“This is a hugely significant moment in Nigeria’s turbulent history,” according to BBC. “Never before has a sitting president been defeated in an election.”

Africa’s largest economy is expected to grow by more than 5 percent in 2015, according to a report in The Economist. The report is based on opinions of executives in Nigeria, South Africa, Angola and Kenya.

The executives cited the following pressing issues affecting business and wealth in Nigeria that they said need urgent attention, according to CityA,M.

Corruption

Goodluck Jonathan’s administration faced allegations of corruption, especially lack of transparency on oil revenues. More than $20 billion in oil revenue at the state-owned Nigerian National Petroleum Corporation is at question in the treasury. The government has yet to publish a PriceWaterhouseCoopers audit into the NNPC oil accounts.

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Inequality

More than 67 percent of Nigerians live below the poverty line according to the U.N.’s most recent multi-dimensional poverty index. Despite Nigeria’s status as an Africa economic powerhouse, poverty is widespread. Rising unemployment will be a crucial goal for Buhari, who made campaign promises to invest in agriculture and mining, and boost employment in industries other than oil.

Oil prices

The recent dramatic drop in oil prices had a devastating effect on Nigeria’s economy, where oil represents 0 percent of government revenue and 90 percent of exports. U.S. success in shale exploitation resulted in a drop in exports to the U.S.

The fall in oil prices has forced the government to cut spending and triggered a sell-off in Nigeria bond and stock markets. Buhari will also need to address the ongoing problem of theft hampering companies operating in the region. Shell, who sold off a selection of its Nigerian assets last year, said it lost 60,000 barrels a day due to theft in the Niger Delta region.

Currency

Another damaging effect of falling oil prices has been the weakening of the naira, Nigeria’s currency, to its lowest level for 16 years. The Central Bank of Nigeria has twice had to devalue the currency in recent months and raised its benchmark interest rate from 12 to 13 percent.

Security

One key battleground in this election was Boko Haram and the ability of the two candidates to deal with the Islamist group which has taken control of huge swathes of land in the north-east, killing thousands of civilians.

The north-eastern state Kano, which has suffered from Boko Haram attacks, has seen business activity drop by 80 per cent in the past three years according to estimates from the local chamber of commerce. Instability in the north-eastern states has only deepened the economic divide between the north and the oil-rich south.

Election results at 18:00 local time showed Buhari with 15 million votes, and Jonathan with 12.8 million votes, according to BBC.

 

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