London — Nigerians head to the polls this Saturday, with the threat of renewed militancy hanging over the Niger Delta, and the country's two main presidential candidates diverging on their oil sector policies.
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Incumbent President Muhammadu Buhari of the All Progressive Congress (APC) and rival Atiku Abubakar, a former vice president, of the opposition Peoples Democratic Party (PDP), will closely contend the presidential election, with many expecting Buhari to just come out on top.
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However, Abubakar, who was vice president from 1999-2007 under then-President Olusegun Obasanjo, enjoys wide support among Nigeria's business class and has been calling for sweeping reforms of the country's oil sector.
Abubakar's promise to open up the business space and run a private sector-led government endeared him to the electorate in Nigeria's economic power base in the southwest, while they view Buhari's economic strategy as passive for Africa's second-largest economy.
But analysts have warned that making promises and then not going through with them has been a common feature in Nigeria's political sphere.
Nigeria's crude and condensate production was just under 2 million b/d in January, and output is receiving a further timely boost as the offshore 200,000 b/d Egina Field ramps up.
SECURITY ISSUES COULD RESURFACE
A huge concern is that if Buhari is reelected, militancy in the Niger Delta might rear its ugly head again.
To his credit, the country's crude output has grown after it plummeted close to a 30-year low of 1.2 million b/d in mid-2016 due to renewed militancy.
Buhari rode to power in 2015 on the back of his promise to tackle corruption, especially in Nigeria's largely opaque oil industry. But he has seen his popularity wane, particularly in the south of the country where almost all of Nigeria's oil is produced. He has also come under pressure as Nigeria's economy has been suffering in the past few years due to stalled reforms, while security concerns have also resurfaced, putting his re-election in doubt.
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The Niger Delta Avengers (NDA), the militant group that claimed most of the attacks on Nigeria's oil installations in 2016, issued a new threat if Buhari wins. The NDA publicly backed opposition candidate Abubakar on Thursday.
Buhari, along with Vice President Yemi Osinbajo and oil minister Emmanuel Kachikwu, have pushed for a significant increase in amnesty program payments, along with a sizable increase to the budget of the Niger Delta ministry, as it bolsters its charm offensive in an attempt to keep militants on side.
PROMISE OF REFORMS
Nigeria's oil sector is in desperate need of reform and despite many of its previous leaders making huge promises, progress has been slow, mired in a lack of political will.
"The current administration's policy to maintain the status quo, keeping control and regulation of the downstream petroleum sector, stifled investment in the sector," Cowries Assets Management economic analyst, Johnson Chukwu, said. "Running a private sector-driven economy will surely lead to improvement in the economy that seems to be comatose presently."
Abubakar promised to carry out a wide range of reforms in the oil sector that will boost production to 5 million b/d by 2025. He also has said he will remove fuel subsidies and privatize Nigeria's four ailing oil refineries in a bid to reduce fuel costs in Africa's largest oil producer.
In his tenure as oil minister, Kachikwu has said all the right things to reform the country's oil industry with his "#7BigWins" agenda, and has made some progress on tweaking upstream fiscal policy. It remains to be seen if the electorate give the Buhari government another chance.
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