Nigeria 2023: Fear of election postponement mounts amid cash, petrol crisis

By Eniola Akinkuotu

Posted on Wednesday, 8 February 2023 17:48
Chairman of Nigeria's Independent National Electoral Commission (INEC) Mahmood Yakubu addresses media representatives in Abuja on February 19, 2019, ahead of rescheduled general elections. (Photo by Pius Utomi EKPEI / AFP)

With a shortage of the naira and an unprecedented petrol scarcity, Nigeria’s electoral commission says preparations for the 25 February poll have been affected. Some politicians have started suspending campaigns, thereby mounting fears of a possible postponement of the poll.

The Chairman of the Independent National Electoral Commission (INEC), Prof Mahmood Yakubu, spent most of January assuring Nigerians that the 25 February election would not be shifted.

“May I once again reiterate our position that the commission is not contemplating, let alone planning, to postpone the 2023 general election. We are will conduct the election as scheduled,” he said at Chatham House, London.

An unprecedented shortage of the local currency and a petrol scarcity has sparked riots in different parts of the country and forced INEC to return to the drawing board. 

The main opposition claims these latest crises have made the government press pause on the 25 February polls. People’s Democratic Party spokesman Debo Ologunagba issued a statement on Wednesday saying the ruling party had credible intelligence that the ruling party was trying to force an election postponement by “orchestrat(ing) security situations.”

In the statement, he says the postponement would be “a prelude to the derailment of the electoral process, having realised it has no chance in the elections.”

The spokesman for the APC, Felix Morka, says he will issue a statement of rebuttal.

Nothing new

In Nigeria, the postponement of presidential elections is not peculiar. In 2011, INEC postponed the election by one week from 9 April to 16 April over logistics challenges. In 2015, the presidential poll was moved by six weeks from 14 February to 28 March due to the insecurity in the northeast.

In 2019, on the morning of election day, just hours before the exercise was to commence, the presidential election was changed. The poll was moved from 16 to 23 February over issues relating to logistics. In all these elections, the commission had also vowed not to postpone but it eventually did.

With Nigeria facing riots and protests over petrol scarcity and the naira shortage, another postponement is likely, says Mike Ejiofor, a former director of Nigeria’s secret police tells The Africa Report. With the stakes higher this time, he says there could be consequences that authorities might not be able to cope with.

Confidence MacHarry, a Senior Analyst with SBM Intelligence, a research firm, says a postponement might be imminent but it would all depend on how the Buhari administration addresses these challenges in the coming days.

“The signs are pointing at that [postponement] even though INEC has debunked claims of a planned suspension,” says MacHarry.

“The biggest indication that we might be heading there is from INEC itself; whether there will be a postponement or not will depend on how the Federal Government chooses to manage the naira and petrol scarcity,” he says.

Naira redesign

It all started in October last year when Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, announced plans to redesign the three highest denominations of the naira – N200, N500 and N1,000 to reduce the amount of money outside the banking system.

Emefiele said 80% of the currency was outside the banking system, adding that as of September 2022, N2.73tr ($5.9bn) of the N3.23tr in circulation was outside the vaults of commercial banks. He said the new notes would be in circulation from 15 December 2022 and from 31 January, the old notes would cease to be legal tender.

The other benefit behind the policy was a need to curb vote buying during the election. Previous elections have witnessed a high rate of vote buying which has dented the credibility of the polls. The plan was therefore to force politicians who had stashed huge sums of money in their homes to deposit them in the banks or risk their monies becoming worthless.

“We are trying to ensure illegitimate funds are not finding their way into our electoral processes,” said Abdulrasheed Bawa, Chairman of the Economic and Financial Crimes Commission (EFCC).

Old notes

Nonetheless, the implementation of the policy was shoddy. Three days to the 31 January deadline, the central bank chief said N1.9tr worth of naira notes had been returned to banks so far — with N500bn more to go. However, banks continued to give customers the old notes over the counter.

With the deadline no longer realistic, Emefiele extended it to 10 February and added that the old notes could still be exchanged for the new after the deadline, albeit only by the central bank.

This made little difference as the new notes remained scarce while traders began rejecting the old notes, causing widespread anger. This forced thousands of customers to storm the banks across the country, some even going along with mats and mattresses.

The scarcity of the naira forced some of the customers to go to emotional extremes, vandalising ATM machines and beating up bank employees. In one viral video, a man stripped naked as he wept that he needs money to be able to feed his family. In another video, bank employees are seen scaling a fence to escape the attack. The new notes are now being sold on the black market at more than 15% higher than their value.

The CBN charged security and anti-corruption agencies to search the vaults of several banks amid reports that some bank chiefs were colluding with unscrupulous politicians to frustrate the policy. This has yielded fruit as many bank employees have been arrested.

Fuel scarcity

People are grappling with the naira shortage and petrol scarcity, which has ravaged several states for the last eight months, reaching a climax in November when it hit Lagos, the country’s economic nerve centre.

Currently, Nigeria doesn’t have functional refineries so the national oil firm, the Nigerian National Petroleum Company Limited (NNPCL) is the sole importer of petrol. However, petrol is sold at a discounted price to marketers who are expected to sell the product at N179 per litre.

This system costs the country about $40m daily and has contributed to its Forex scarcity. But marketers have refused to sell the product at the agreed price as it is being sold at N700 per litre in some parts of the country.

Politicians kick

The naira shortage has led to different reactions among politicians. The ruling All Progressives Congress (APC) has sought to distance itself from the policy as anger continues to spread. Last week, Kano State Governor Abdullahi Ganduje advised President Muhammadu Buhari to shelve his planned visit to the state so he wouldn’t be attacked.

The APC governors also visited President Buhari in a bid to get him to extend the deadline indefinitely but he refused to commit. Feeling frustrated, they have headed to the Supreme Court to extend the deadline. The court has extended the deadline by seven days pending the determination of the case.

APC Presidential candidate, Bola Tinubu, lambasted the CBN and suspended his rally in Oyo State which has been witnessing riots while in Lagos, Governor Babajide Sanwo-Olu and his Ogun State counterpart, Dapo Abiodun, have suspended their campaigns.

Opposition politicians have hailed the central bank policy and have called on the apex bank not to shift ground.

Presidential candidate Atiku Abubakar of the People’s Democratic Party (PDP) says the likes of Tinubu are angry over the policy because it undermines their ability to buy votes. Some 14 other political parties also called on the apex bank not to bow to pressure.

World Bank, INEC express fear

Amid the crisis, however, both the World Bank and INEC have expressed worry over the effect it could have on election preparation.

In a meeting with transporters, INEC boss Yakubu said, “The truth is that our arrangements may be negatively affected by the non-availability of products.” In a separate meeting with CBN’s Emefiele, Yakubu said the paucity of the naira could thwart the success of the poll as some of the transactions of the electoral commission are done in cash.

In his response, Emefiele promised to make cash available to the commission.

An internal report by the World Bank obtained by Premium Times stated that there is a “clear risk that cash shortages cause hardship and frustration which could escalate social tensions, especially in a febrile political environment ahead of elections on 25 February (presidential and parliamentary) and March 11 (gubernatorial).”

Understand Africa's tomorrow... today

We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.

View subscription options