Although Bola Tinubu was declared winner of Nigeria’s presidential vote on March 1, the US government has stated that the country’s elections “failed to meet expectations,” and two main opposition parties continue to call for a rerun. In this context, it remains unclear whether Tinubu will take office in May. As he fends off allegations that the vote was illegitimate, Tinubu and his team are also looking ahead to the transition period, contemplating an enormously complex agenda that should include measures to arrest economic decline, address root causes of insecurity, and eradicate endemic corruption.
Despite Nigeria being Africa’s largest economy, the country’s wealth gap is widening. More than half the country’s 220 million people live in poverty or close to it, a crisis that will only worsen if current conditions persist. Inflation remains high, at over 20 percent, while oil production has dropped to historic lows. Nigeria has neither benefitted from surging global oil prices, nor taken meaningful steps to diversify the economy away from oil.
Food and fuel scarcity, due in part to second-order effects from the war in Ukraine, have contributed to commodity shocks, trade restrictions, and a depreciating currency. Meanwhile, Boko Haram’s reign of terror in the northeast, banditry and kidnappings in the northwest, and sectarian violence and separatist agitations have created further economic volatility throughout the country.
Much of this instability can be attributed to corruption at all levels of government. President Muhammadu Buhari failed to stamp out corruption, as he had promised to do during his campaign eight years ago, and Tinubu appears ill-equipped to do more than maintain the status quo. Known as a “kingmaker,” Tinubu is deeply entrenched in Nigeria’s political system, has been implicated in drug dealing and money laundering schemes, and is reported to have used his post as governor of Lagos for self-enrichment.
Nevertheless, Nigeria is not destined to spiral downward. Its consumer base is strong, its GDP is predicted to grow 3.2 percent in 2023, and it has great potential in renewable energy and as a technology hub. Tinubu can build on these strengths and effect positive changes in Nigeria by focusing on three interconnected areas. In so doing, he could begin to resolve the country’s deep-seated corruption and security issues, with macroeconomic development, enhanced social safety networks, and investor confidence to follow.
Modernize and diversify the economy
While much of Tinubu’s campaign rhetoric focused on restoring Nigeria’s oil production, he could embrace the Energy Transition Plan, which calls for carbon-neutrality by 2060 and promises to lift 100 million Nigerians out of poverty. As countries transition to green energy, the IMF predicts that Nigeria’s oil revenues could decline by 25 percent in the next seven years, and by 50 percent by 2050. Meanwhile, the World Bank estimates that by 2024, an additional 7.7 million Nigerians will be forced into poverty, bringing the country’s overall poverty rate over 60 percent. Tinubu can counter these trends by using oil revenues to develop Nigeria’s renewable energy sector, especially wind farms in the country’s north, as well as its emerging technology sector. This would not only avail opportunities for investors in green energy and tech-enabled industries throughout West Africa but also create new jobs for the local population.
Address chronic insecurity
Threats of violence and unrest are a near-constant concern in Nigeria, and they are particularly acute along the country’s northeast border, where Boko Haram has been active for more than a decade. These threats pose significant risks to investors with operations in the country’s north. Katsina State, for example, is home to a 10MW wind farm that cannot operate at full capacity due to security and financing issues. Tinubu must ramp up efforts to combat these threats, while also working to mitigate sectarian violence and separatist agitations in the country’s south. He can begin by transforming the military and police forces, which have only exacerbated these conditions. In its campaign against Boko Haram, for instance, the Nigerian military has reportedly engaged in a mass forced-abortion programme in the region, drawing intense international scrutiny. And according to reporting by Transparency International, Nigerian police forces are notorious for taking bribes and engaging in extrajudicial killings. Accountability and political will are necessary for restoring public trust in these institutions.
Deal with corruption across the board
Many of Nigeria’s systemic problems can be tied to its history of corruption and self-enrichment at the expense of economic and social stability. Tinubu could make a meaningful impact and create a positive legacy by enacting strict protocols to monitor, combat, and ultimately root out corruption in the highest echelons of power. He could increase funding for the Economic and Financial Crimes Commission, which for 20 years has worked to identify and bring to trial Nigerian politicians and business leaders engaged in corruption. He could also establish mechanisms for tracking military funds intended to fight Boko Haram that have instead been diverted by military officers. If he chooses not to address the legacy of corruption within Nigeria’s systems of power, he will continue to face pressure from Western governments, investor confidence in the country will continue to decline, and a huge swath of Nigerian society will remain mired in poverty or choose emigration over investing in their country’s future.
Looking ahead
While much attention has focused on the presidential horserace, investors are taking a longer-term perspective and waiting for credible approaches to the serious challenges Nigeria faces today. Inflation, extreme inequality, security threats, low oil production in an oil-centric economy, and endemic corruption will follow whoever assumes the presidency. Once the electoral process comes to a formal conclusion, Nigeria’s next president will have to address these challenges by diversifying and modernizing the economy, reducing inflation, increasing security, and assuming a firm stance against corruption.
With the right approach, Nigeria’s next president could improve living standards for millions of Nigerians and establish Nigeria as a global player in technology and green energy. Elections often represent new opportunities and cause for hope. Assuming he ascends to office, Bola Tinubu will quickly face a choice as to how he will address what previous Nigerian presidents have promised and failed to do.
David Alm is the editor at Veracity Worldwide. He wishes to thank Associate Corentin d’Ansembourg; Senior Associates Olivia Johnson and Nandita Balakrishnan, PhD; CEO Jay Truesdale; and Senior Advisor in West Africa Mary Ellen Havlik for their contributions to this report.