Fitch Downgrades Nigeria’s Short-term Social Stability, on Tinubu’s ‘weak’ Mandate
Fitch Solutions lowered Nigeria’s Social Stability score in its proprietary Short-Term Political Risk Index (STPRI) to 17.5 out of 100, down from the 25.0 previously projected, following what it described as the aftermath of the “weak” mandate claimed by the president-elect.
In its latest Country Risk & Industry Research, the global group also downgraded Nigeria’s overall STPRI from 42.1 to 40.2, maintaining that political risks are expected to rise in Nigeria as a result of Tinubu’s victory.
Fitch stated that as it had projected, Tinubu – the candidate of the ruling All Progressives Congress (APC) – was declared the winner of Nigeria’s presidential election on March 1, 2023. It added that despite opposition parties calling for a re-run of the presidential election, it believed that chances of this happening were slim.
According to the organisation, reduced trust in the electoral process and Tinubu’s weak political mandate would increase social unrest in the immediate term.
The Fitch report stated, “In line with the Fitch Solutions’ view, Bola Ahmed Tinubu – the candidate for the ruling All Progressives Congress (APC) – was declared the winner of Nigeria’s presidential election on March 1 2023.
“As we had predicted, the popularity of the Labour Party (LP)’s candidate – Peter Obi – split the opposition vote at the expense of Atiku Abubakar, the candidate for the PDP.
“Indeed, Obi received the largest share of votes in many states in Nigeria’s South-south and South-east regions, which were PDP strongholds in previous elections.
“However, Tinubu received a weak mandate. With all states now reporting, Tinubu received just 36.6 per cent of the national vote. This is the first time since the return of democracy in 1999 that a president has been elected with less than 50 per cent of the vote, and the lowest share received by an election winner since 1979.”
Furthermore, the report noted that opposition figures had criticised the conduct of the vote and were demanding that the election be re-run.
While international observers had not described the vote as rigged, Fitch explained that they had reported that the election was characterised by operational failures and a lack of transparency.
It added that opposition parties had been particularly critical of the fact that INEC did not post individual polling station figures to a website that was meant to ensure transparency.
Besides, Fitch explained that it believed that the low voter turnout of an estimated 29.0 per cent – the lowest turnout on record – at a time when voter enthusiasm was high, will give rise to the perception that widespread voter suppression took place.
A coalition of opposition parties led by PDP and LP, Fitch said, had already called for the cancellation and re-run of the election.
It added that statements by INEC, however, suggested that the institution would stand by the official results, with INEC officials having stated that allegations of electoral fraud were “unfounded and irresponsible” and that the results point to “a free, fair and credible process.”
The report said this suggested that there was limited appetite within the commission to hold new elections, noting that, indeed, holding a re-run would be extremely costly, as the commission’s 2023 election budget totalled N305 billion ($660 million) – likely discouraging a re-run.
Fitch stated that it expected that protests were likely over the short term, particularly in urban areas, such as Lagos, stressing that the Labour Party drew significant support from members of the #EndSars protest movement, which launched a series of protests in the commercial capital in 2020.
The Fitch report stated, “Given that several pre-election polls showed the Labour Party’s candidate winning the vote, we expect that the party’s youthful supporters are likely to be dissatisfied with the result.
“It is also possible that the Labour Party and PDP may boycott or disrupt gubernatorial elections scheduled for 11 March 2023. Much will depend on how Peter Obi and other opposition figures react over the coming days.
“Taking this into account, we have lowered Nigeria’s Social Stability score in our proprietary Short-Term Political Risk Index (STPRI) to 17.5 out of 100, from 25.0 previously (lower score implies higher risk). This brings Nigeria’s overall STPRI from 42.1 to 40.2.
“Given Tinubu’s weak political mandate and widespread opposition to his government, we doubt that the incoming administration will launch any serious economic reforms in 2023.”
Fitch further forecasted that inflation would average 18 per cent in 2023 – and Tinubu’s weak political mandate would discourage him from implementing strong economic reforms in the short term.
Fitch predicted., “Indeed, the liberalisation of Nigeria’s exchange rate regime and the removal of the fuel subsidy would put upside pressure to inflation and would likely lower the president’s already weak support base – something we believe Tinubu will seek to avoid.
“Indeed, given divisions within the legislature, widespread political opposition and concerns about the president-elect’s health, we expect a long period of political stasis.”