The Economist - UK (2022-04-30)

44 Middle East & Africa The Economist April 30th 2022

oil.  Nigeria,  paradoxically,mayfinditself

in  deeper  trouble  as oil prices rise. Al­

though  it  exports  thestuff,italsoburns

cash  on  fuel  subsidies,whichincreaseas

the oil price does. It issueda $1.25bnseven­

year  bond  in  March,thoughatanexpen­

sive interest rate of 8.4%.

The war in Ukrainehasjoltedmetaland

mineral  prices  upwards,helpingexport­

ers.  Yet  this  will  beoffset ifdearerfuel

drains  their  currencyreserves,whichare

scant  for  many.  On  averageabout60%of

debt  owed  by  sub­Saharancountriesisin

foreign currencies. Mozambique’sforeign­

currency borrowing standsat113%ofgdp.

There and in Angola,RwandaandZambia

every  10%  fall  in  theircurrencyincreases

debt­to­gdpby six to 11 points,saysCapital

Economics, a consultancy.

These  problems  stemfroma stubborn

fact. Debt­funded spendingbyAfricangov­

ernments  has  not  generatedenougheco­

nomic growth, tax revenueorexportearn­

ings to pay back the debtcomfortably.The

pandemic  bears  muchoftheblame but

plenty of spending wasinefficient.InGha­

na,  for  example,  it  soarsinelectionyears

and much goes on salariesandhandouts.

Few remedies appeal.Egypt,Ghanaand

Tunisia may need imfbail­outs.Theseare

unpopular, especiallyinGhana,wherethe

government  has  stakeditsreputationon

sound financial management.

Governments  couldtry torestructure

their debts. When Africa’sdebtcostswere

previously this high, richcountriesagreed

to big write­offs. Last yeartheg20,a group

of  large  economies,  setuptheCommon

Framework to help countriesatriskofde­

fault.  In  theory  the  schemerequirespriv­

ate creditors to take thesamehitasgovern­

ment lenders, which mayexplainwhythey

want  nothing  to  do  withit.Theresultis

stasis.  Only  Chad,  Ethiopia andZambia

have  applied—and  nonehasgot beyond

talks. Ethiopia had itscreditratingcutafter

applying, putting othersofftrying.

Some  hope  to  fix  theirproblemswith­

out  outside  help.  Thatwillbepainful.To

stabilise its debt Ghananeedstofindsav­

ings  or  taxes  worth6%ofgdp, reckons

Capital Economics. Ghana haspromisedto

slash  discretionary  spendingbyalmosta

third and has ignored streetproteststoram

through a tax on electronicpayments.The

cedi, the local currency,hasfallenbyabout

a fifth against the dollarthisyear.Totryto

stop  the  slide  the  central bankrecently

raised  interest  rates by 2.5 percentage

points  to  17%,  its  biggest­everjump.Most

countries  in  sub­SaharanAfrica needto

cut  spending  or  raisemoretaxestoavoid

debt trouble, says the imf.

Many governmentswouldratherbeton

economic  growth  and the debt­fuelled

spending  they  hope  wouldspurit.Yetif

that does not work, thefalloutwillbebru­

tal. Just ask Sri Lankans.n

Nigeria

The game begins

I

nmostplaces, electionsareaboutthe

future.InNigeria,oddly,theystartwitha

bowtoa coup­riddenpast.Everyfouryears

wannabepresidentsstreamtoa sprawling

hilltopvilla, wheretheytrytowinthefa­

vourofIbrahimBabangida,a formermili­

tarydictator.Thenextbigstoponthispil­

grimage is the farmhouse of Olusegun

Obasanjo,whoalsowasheadofa military

government(andwaslateranelectedpres­

ident).Theambitiousalsovisitthepalaces

oflocalchiefsandreligiousleaders.

Thisyearisnodifferent,asrivalsjostle

to replace Muhammadu Buhari,another

formermilitaryruler,whosesecondandfi­

naltermasanelectedpresidentendsnext

year.Thecontestisperhapsthemostim­

portantsincetheendofmilitaryrulein

1999.AtstakeiswhetherAfrica’smostpop­

ulousnationwillcontinueitsslideinto

economicstagnationandungovernability. 

Insteadofofferingnewideas,themain

contenders are engrossedin a complex

gameofstrategy.Theyareforgingfragile

alliancesandcourtingpower­brokersand

moneymen.Oneoftherulesofthegameis

thatbigjobsaretobesharedoutamongNi­

geria’ssixregions(containingmorethan

250 squabblingethnicgroups),whichare

nearlyequallysplitbetweenMuslimsand

Christians.Anotheristhatthepresidency

shouldrotatebetweenthemostlyMuslim

northandthemostlyChristiansouth.

Startwiththebattleforthenomination

of the ruling All Progressives Congress

(apc) inprimariesnextmonth.BolaTinu­

bu,perhapsthemostpowerfulpolitician

intheYoruba­speakingsouth­west,thinks

he  ought  to  get  it  as  a  reward  for  assem­

bling  the  broad  opposition  alliance  that

took power in 2015. He wanted to be on the

ballot  then  as  vice­president,  with  a  view

to  running  for  the  top  job  later.  But  those

elections  were  balanced  on  a  knife­edge

amid religious and regional tensions, and

it would have been politically toxic to have

Mr  Tinubu,  a  Yoruba  Muslim,  running

alongside  Mr  Buhari,  a  Muslim  from  the

north. So Mr Tinubu held back and nomi­

nated  Yemi  Osinbajo,  a  lawyer  and  mega­

church pastor. 

Mr  Osinbajo  has  since  proved  a  quick

study in the third rule of the game: treach­

ery.  In  April  he  threw  his  patron  under  a

bus and said he would run against him for

thenomination.  He  may  have  been  en­

couraged by Mr Buhari’s reluctance to sup­

port the 70­year­old Mr Tinubu (the presi­

dent is thought to favour Godwin Emefiele,

his  pliant  central­bank  governor)  and  by

the  expectation  that  it  is  the  turn  of  a

southern Christian to be president. 

Although  more  competent  than  his

boss, Mr Osinbajo promises to continue Mr

Buhari’s  policies  of  building  infrastruc­

ture,  mostly  with  Chinese  loans,  and  of

meddling in the economy in the hope of di­

versifying  away  from  oil.  Given  Nigeria’s

sorry state, it is baffling why he is present­

ing  himself  as  a  continuity  candidate.  In

any  case,  he  does  not  have  Mr  Tinubu’s

deep pockets to fund a costly campaign.

An equally skilful game is being played

in the opposition People’s Democratic Par­

ty (pdp), which ruled from 1999 to 2015. Ati­

ku Abubakar, a former vice­president, fan­

cies another shot after five failed ones. He

is 75, so it may be his last. Mr Abubakar, a

northern  Muslim,  will  see  the  populous

north  as  his  base,  particularly  if  the  apc

fields a southerner. He too has deep pock­

ets—and  convictions.  Voters  have  repeat­

edly  turned  up  their  noses  at  his  plans  to

privatise  state­owned  assets,  perhaps  for

fear  that  corruption  might  infect  the  pro­

cess, but he has stuck to his guns. 

Still,  Mr  Abubakar  is  not  a  shoo­in  for

the  pdp.  Edwin  Clark,  a  94­year­old  party

elder, says it should choose a candidate for

the  first  time  from  among  the  Igbos,  the

smallest  of  Nigeria’s  three  main  groups

and one with a history of separatism. 

Messrs Abubakar and Tinubu hold little

appeal  for  the  half  of  Nigerians  who  are

aged 19 or younger and who see politics as a

stitch­up by septuagenarians. That may ex­

plain why little more than a third of voters

bothered to turn out in 2019. Yet the coun­

try  sorely  needs  new  ideas—and  vim—in

Aso Villa, the president’s compound. “The

old  faces  contesting  for  the  presidency”,

says Ayisha Osori of the Open Society Ini­

tiative  For  West  Africa,  an  advocacy  and

philanthropy group, “indicate a tone­deaf­

ness and inability to conceive of aNigeria

that can be and needs to be different.”n

A BUJA

Old hopefuls are jostling to succeed

President Muhammadu Buhari

Less fun than it looks