Eurasia Group is pleased to release the second year-ahead outlook in our series of "Top 7 political risks for 2007," in which analysts from the Middle East & Africa practice consider political risks associated with Nigeria's historic presidential and gubernatorial elections.
According to analysts, the conduct of the April election will be critical to the future of this troubled oil-rich country. If successful, it will be the first peaceful transfer of power in over 40 years. But escalating personal hostilities within the political elite and lackluster preparations for the vote increase the risk that the election will be perceived as illegitimate, which could instigate violence or even invite military intervention.
This could jeopardize Nigeria's improving business climate and regional stability. Particularly divisive and acrimonious elections could compel the winners to attack their political rivals by pursuing campaigns against domestic businesses such as banks, airlines and telecom companies owned by their rival's supporters.
Pre-election tensions are also likely to affect oil production in the volatile Niger Delta region, where several key governorships will be contested in April. Militia attacks against oil installations are likely to disrupt oil supplies ahead of the elections, but the post-election outlook for stability and oil and gas production in the Delta may actually be brighter in 2007 than it was in 2006 due to a number of political and practical factors.
The Top 7 Risks series: