×

Nigeria's President Buhari to run for election next year, markets aren't so happy

  • Nigeria's President Muhammadu Buhari is to contest his party's nomination for next February's presidential election, it was announced Monday.
  • Stocks in Lagos dropped over 1 percent on the news and have hovered around the flatline since.
  • Buhari's leadership of late has been subject to speculation over his health, for which he sought treatment in London for several months last year.
Nigerian President Muhammadu Buhari visits Ebonyi State in the south east of the country to commission projects on November 14, 2017.
next24online | NurPhoto | Getty Images
Nigerian President Muhammadu Buhari visits Ebonyi State in the south east of the country to commission projects on November 14, 2017.

Nigerian President Muhammadu Buhari is to contest his party's nomination for next February's presidential election, leading to a rather downbeat reaction on the Nigerian stock exchange.

Stocks in Lagos dropped over 1 percent after his announcement Monday, Reuters reported, hitting a three-month low. Sentiment remained subdued Tuesday as stocks hovered around the flatline.

In fact, Nigeria's stocks have been on a downwards trajectory for over a month.

Buhari's leadership of late has been subject to speculation over his health, for which he sought treatment in London for several months last year. The president, 75, has not disclosed the reason for the treatment.

He is currently in the U.K. for talks with Prime Minister Theresa May ahead of the Commonwealth Heads of Government Conference in London next week.

In 2015, Buhari was the first Nigerian opposition leader to win an election. Representing the center-left All Progressives Congress (APC), he beat then-incumbent Goodluck Jonathan. Buhari previously ruled Nigeria in the 1980s as head of a military regime.

But, Nigeria has struggled on both its economic and security fronts since Buhari's landmark election victory.

In late March, it emerged that Nigeria's national budget announcement, initially planned for January, had been pushed back to the end of May.

The country experienced its first full-year recession in 25 years in 2016, with its economy hit by low oil prices. Economic growth remains sluggish, expected by the International Monetary Fund to be 1.9 percent for 2018, well below the emerging market average of 4.9 percent.

But, there has been some economic positive news. Nigeria's state revenue for February edged up by 19 billion naira ($53 million), thanks to higher crude oil exports and prices.

Nigeria is one of the largest economies in Africa, and with over 180 million inhabitants is the continent's largest population. In its manifesto, the APC pledged to create 1 million new jobs per year.

Islamist militant group Boko Haram continues to threaten the security of civilians in the northeast of the country. Meanwhile, militant attacks also continue in the Niger delta region, the country's oil production hub.

Motorists wait in traffic under banners bearing portraits of Nigerian President Muhammadu Buhari on March 29, 2018, in Lagos, Nigeria.
Pius Utomi Ekpei | AFP | Getty Images
Motorists wait in traffic under banners bearing portraits of Nigerian President Muhammadu Buhari on March 29, 2018, in Lagos, Nigeria.

"Buhari is likely to face opposition for the APC ticket, although as a sitting president he is in the strongest position to secure the nomination," Imad Mesdoua, senior consultant for sub-Saharan Africa at research firm Control Risks, told CNBC via telephone.

"The vote in 2019 will be competitive, but (Buhari) will argue that he needs more time to improve national security and implement anti-corruption measures, key promises he had pledged to see through during the 2015 election."

But one former leader has espoused a renewal in Nigerian politics. "The older generation must give way for the new one," ex-President Ibrahim Babaginda said earlier this month, as reported by local press. "We have become analog, but this is a digital age. So the young people should be supported to use their digital knowledge to move the country forward."

Babangida and another former president, Olusegun Obasanjo, who supported Buhari previously, have since spoken against the incumbent.

There has been a "crystallization of criticism among some power-brokers against government performance" since Buhari came to power, Mesdoua said. "Both Obasanjo and Babangida criticized the government's performance in economic management, security and poverty alleviation but also called for a new generation of leaders."