The drumbeat of war is sounding on the streets as Nigeria prepares for the 2015 elections. The election, due in February, has been postponed by six weeks to 28 March, ostensibly to allow the electoral commission more time to prepare and to beef up security in the north-eastern part of the country where Boko Haram is strong.

But a far more insidious deciding factor in the polls could be Nigeria’s unhealthy dependence on oil, which represents over 80% of its national income. Plummeting oil prices since December have presented new challenges for Nigeria’s economy.

The much needed oil allocations from central government to the federal states have been delayed, making it difficult for some to meet recurrent and capital projects expenditure. The free-falling oil price is forcing the government to draw down its foreign reserves to augment the budget.
If oil prices continue to fall, tumbling morale and expectations could pose major obstacles to a free and fair elections. Already, opposition parties are crying foul over the draw-down of more than 80% of the national foreign reserves that were set up in 2012. And a sovereign wealth fund for Nigeria, based on the Norwegian fund (currently worth nearly $900bn), looks likely to remain a pipedream. Pressure on the economy has forced the government to abandon the idea, which aimed to provide for the rainy day that has already caught up with the country. Now, with oil prices hovering around $50 per barrel, many have declared the 2015 budget unrealistic.

Whichever way the election goes, education and health care are unlikely to be on the agenda.

The fierce political struggle of recent months is about a bid to capture and control oil wealth. Last year, the central bank governor, Lamido Sanusi, shocked the country when he claimed $20bn was unaccounted for by Nigeria’s state oil company, the Nigeria National Petroleum Corporation (NNPC).
The national government audit of the NNPC – currently functioning as both oil company and regulatory body – confirmed that the money was missing. The result was a $1.48bn fine, but no restructure of NNPC and no attempt to bring the culprits to book. The whistleblower, Sanusi, meanwhile, was fired. The failure to act seriously in the face of glaring financial mismanagement raises serious questions about President Goodluck Jonathan’s supposed fight against corruption.
global development professionals. But some analysts now believe that the fall in oil price could be an eye opener and a turning point in repositioning Nigeria’s economy beyond oil.

The Rockefellers’ new pledge – supporting economic diversification not oil divestment – resonates with Nigeria’s economy and has implications for the elections. Some in the country argue that those seeking election should be able to demonstrate how they would grow the economy, with or without oil revenues. After all, prior to the 1960s and early 1970s Nigeria was a net exporter of food, in sharp contrast to today, where each year we spend a staggering $5bn on importing cereals and rice alone.But the campaigns we have seen so far from both the mainstream party and the opposition have been dominated by mud-sliding rather than plans for turning round the economy.

Whichever way the election goes, fundamental issues such as education, health care, and the provision of basic social amenities are unlikely to be on the incoming government’s agenda.

The inability to bring pressure on the oil companies to clean up the Niger Delta has become an election issue, voter apathy is likely to mean low turn-out come election day, in an election where voting along ethnic lines could be a strong factor. Oil extraction has ruined Nigeria’s Niger Delta, hampering farming and fishing and impoverishing the people with little or no benefits from oil proceeds.
Both present and past regimes’ inability to bring pressure on the oil companies to clean up the Niger Delta has become an election issue. The failure to implement the 2011 UNEP report recommendations (which called for an Ogoni restoration and cleanup fund of $1bn, an Ogoni Restoration Authority, an ultra-modern medical complex, and restoration of the environment that would take 30 years to remedy), hangs on the neck of the government like an Albatross.
General Muhammadu Buhari, who after three election defeats has returned to the contest to face Jonathan, has made a pledge to implement the UNEP report, but has not stated how and what he will do, which makes many skeptics disregard this as no more than a politician’s antics to secure votes. The candidates have failed to present a positive vision for a post-petroleum economy or to answer fundamental questions about the energy industry.

And now old tensions are flaring once again in the fragile, but oil-rich, region of Ogoniland, where oil prospecting may be resumed – more than 20 years after the uprisings in which 3,000 people were killed. Shell ceased operations in 1993 and it says it has no plans to resume them, but local oil firms are putting out feelers, with community chiefs in the area collecting signatures in favour of resuming drilling.

Meanwhile, other communities have resolved not to allow Shell to divest from Ogoni nor to let oil drilling resume until the UNEP report is implemented.
Even if Belema oil company – or any other oil company – buys the oil concessions in Ogoni, a caveat emptor, or buyer beware, has been imposed to warn would-be buyers that Shell’s huge liabilities, court cases, and claims would become would-be buyers’ baggage too.
As the nation goes to the polls the simmering tension over oil could boil over.

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