Dow Jones)- There is a 30% chance that the ongoing legal maneuvers between Vice President Atiku Abubakar and Nigeria’s electoral commission may lead to a delay of the country’s April presidential elections, an analyst at the Eurasia Group said Tuesday.
A potential delay could have important ramifications for the country’s stability and its energy sector, as the current government may be unprepared to handle the potential public, elite and capital market fallout a delay might cause, Washington, D.C.-based analyst Greg Priddy said.
If the polls aren’t held on time, a fragile peace in the Niger Delta oil producing region may be broken, delaying restart of oil output that was idled because of security issues.
A Nigerian Senate panel ruled Tuesday that Abubakar, once an ally of President Olusegun Obasanjo, improperly diverted more than $100 million in public funds and recommended prosecution that could end his presidential campaign.
“An election delay and the constitutional crisis which will likely follow could tempt the country’s military and influential ex-military establishment – which ruled Nigeria for four decades – to consider re-entering politics,” Priddy said in a report to clients.
“In the 1999 and 2003 elections, the military and powerful ex-military establishment was largely behind Obasanjo,” he said. “However, Obasanjo’s relationship with key figures within the ex-military establishment, such as former head of state General Ibrahim Babangida, former longtime National Security Adviser Mohammad Gausu and former Defense Minister Theophilus Danjuma, is currently strained. In any political crisis it is not clear that these powerful figures, and many others within the ex-military establishment, would back Obasanjo rather than someone else to replace him.”
If an election delay occurs, the country’s legislature, which in 2005 refused to grant Obasanjo an option to run for a third term, could refuse to allow him to continue to stay in office, especially if he is seen as precipitating the delay, Priddy said.
“Without ratification, his actions and those of his ministers and senior appointed officials who will presumably continue to hold office past the legal end of the administration may become subject to some legal ambiguity,” he said. “This could potentially put at risk any commercial contracts the government might enter into after May. There is already local media speculation that if such a scenario occurs, the current Senate President Ken Nnamani could be sworn in as interim president, since he is third in line for the presidency and neither Obasanjo nor Abubakar can be trusted to conduct a free and fair election.”
In the oil sector, an election delay would postpone any potential breakthrough in addressing unrest in the Niger Delta region, “because it will extend the delay until a new northern-Muslim led administration could come to power,” Priddy said.
“Northern Muslim legislators hold a veto over increased funding for the Niger Delta states,” he said. “Having a fellow northern Muslim as president will result in a higher probability of success in crafting a political compromise, than if a southern Christian politician, like Obasanjo, takes power.
“While most energy analysts and energy firms operating in Nigeria expect violence to rise ahead of the election and then to fall to more ‘normal’ levels afterward after the April polls, instability may now extend beyond April/May if the elections are delayed,” he said.
If this happens, further oil output disruptions “are less likely before the election, but the existing outages may take longer to come back on line due to lingering uncertainty linked to (an) election delay,” he said.