Buhari’s 2nd Term bid, APC, nPDP crisis, a Decider for Emerging Markets Investors

    • Buhari at odds with Senate leader and other key party figures
    • APC holds national convention on June 23 to elect officials




    Political risk poses another headwind to developing-nation stocks that are heading for their worst quarter since the mid-2015 angst over a China hard landing, with the MSCI Emerging Markets Index down more than 7 percent.

    As Investors watch to see if 75-year-old President Muhammadu Buhari can overcome divisions within his party to win reelection. Also in focus: would he in a second term allow the central bank to ease capital controls and loosen its tight grip on the naira

    Even as Nigerian stocks fell the most in two years as skittish investors shied away from assets they deem too risky. Analysts and money managers said the declines weren’t justified and didn’t reflect positive developments in Africa’s largest oil producer.

    As Rising U.S. Treasury yields and a strengthening dollar have already done damage, spurring — in Asia’s case — the biggest equity capital outflow since the 2008 financial crisis.

    “With the Fed’s rate hike and an escalation in the U.S.-China trade frictions, election results will inevitably get more attention,” said Tsutomu Soma, general manager for fixed-income trading at SBI Securities Co. in Tokyo. “It’d be a double whammy for emerging markets if both the economy and politics turn sour.”

    Risk goes both ways, as the Colombia example shows. And with that, here’s the timeline and points of focus for major elections coming up through 2019:

    The Party Politics Threatening Buhari’s  Re-Election Bid

    Buhari, a former general who overthrew an elected government in 1983, stood as a presidential candidate for three different political parties in elections from 2003 to 2011. It was fourth-time lucky three years ago when his was the first opposition victory since Nigeria gained independence from the U.K. in 1960.

    A likely contender in next year’s vote is former Vice President Atiku Abubakar, 71. He defected to the PDP from the APC in December, the second time he returned to the party in a decade after pursuing his presidential ambition elsewhere. Abubakar even has an insurance policy. If he doesn’t win the PDP nomination this time, his loyalists have already lined up a new party for him — the People’s Democratic Movement.

    Meanwhile the widening splits in Nigerian President Muhammadu Buhari’s ruling All Progressives Congress are jeopardizing his bid for re-election next year.

    As the APC holds its national convention to elect party executives this Saturday, it’s threatened by defections as well as infighting between the presidency and its top lawmakers: Senate President Bukola Saraki and House of Representatives Speaker Yakubu Dogara. They joined a coalition that helped Buhari, 75, become the first opposition leader in Nigeria’s history to win executive power through the ballot box.

    Forged from a combination of two opposition parties and a faction of the then ruling People’s Democratic Party to help Buhari defeat Goodluck Jonathan in 2015, the APC has since struggled to unite its various personalities. Bitter party rivalries produced parallel APC elective congresses last month in several key states, such as Lagos, Kaduna and Kano.

    “The APC is a banding together of disparate political interests that didn’t try to blend,” said Clement Nwankwo, executive director of Abuja-based Policy and Legal Advocacy Centre. “The party didn’t compensate many of those who supported it. And waiting until now the elections are coming to try to do that is rather late.”

    Defection Threat

    Party primaries between August and October will mark the start of serious campaigning for presidential and parliamentary elections in February in Africa’s biggest oil producer. At that point, the APC could face an increased chance of defections by candidates who fail to win nomination.

    “Some of the groups see themselves as an independent or autonomous group within the party,” Kaduna State Governor Nasir El-Rufai said in May. “But I do not think the APC has any major factionalization problem.”

    So far the PDP hasn’t shown it can capitalize on the APC’s troubles — it has no front-runner and is itself facing divisions across Africa’s most populous nation. Former Vice President Atiku Abubakar, 71, has said he plans to seek the party’s nomination following his defection from Buhari’s camp last year.

    Besides the internal party bickering, Buhari spent a total of five months in the U.K last year for treatment of an undisclosed ailment. He’ll have to defend a record that includes continuing attacks by Islamist militant group Boko Haram, deadly clashes between nomadic herders and crop farmers, an economic slump in 2016, and an anti-corruption crusade critics call partisan.

    ‘New PDP’

    Buhari’s biggest headache inside the ruling party at the moment is the faction led by Saraki and Dogara, known as the “New PDP.”

    Though APC members, Saraki and Dogara had to rely on opposition support to become legislative leaders against the wishes of Buhari and the party. Tension with the presidency has slowed passage of key bills and the budget, which lawmakers approved in May, about six months after Buhari presented it.

    While signing the budget on Wednesday, Buhari said he disapproved of some changes lawmakers made, including a cut in provisions for infrastructure projects, and that he may propose a supplementary spending plan.

    Robbery Allegations

    The police ordered Saraki to appear for questioning last month over allegations linking him to a robbery in April in which 33 people were killed in his home state of Kwara, where he previously served as governor. Saraki has called the charges politically inspired.

    Days later, a communique, published on his Facebook account, said “the National Assembly will not hesitate to invoke its constitutional powers if nothing is done to address” a set of demands for Buhari to end insecurity, violence, and the “systematic harassment and humiliation” of political opponents.

    In the past year, Buhari has had more success in placating another faction, led by Bola Tinubu, who was the key to his support in the southwest among the Yoruba people, one of Nigeria’s three-biggest ethnic groups.

    The president posthumously honored regional idol Moshood Abiola, whose election victory 25 years ago was annulled by military rulers who kept him under arrest until he died five years later. Buhari declared the date of that election, June 12, as Nigeria’s new Democracy Day and a national holiday.

    “There’s a strong chance of defections, regardless of whether those differences are ironed out, but an outright split of the APC remains somewhat unlikely,” he said. “What happens before, during and after the primaries will be key to see whether or not the APC can go into the electoral battle as a united entity.”

    With Addictional facts from Bloomberg News.

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