Nigeria and the world in 2023

10 Jan 2023, 12:00 am
Jide Akintunde
Nigeria and the world in 2023

Feature Highlight

A troubled country in a challenging world

L-R: Nigerian presidential candidate of the Labour Party Peter Obi, Central Bank of Nigeria Governor Godwin Emefiele, US House Republican leader Kevin McCarthy, Chinese President Xi Jinping, British Prime Minister Rishi Sunak, President of Ukraine Volodymyr Zelenskyy, and President of Iran Ebrahim Raisi. Bottom image: A view of Typhoon Hinnamnor

2023 is an election year in Nigeria. A new president will emerge, as the incumbent President Muhammadu Buhari, who is not a candidate in the general election, will be vacating the Aso Rock Presidential Villa on the 29th of May. But unlike the past ones since 1999, a new administration this year may fail to herald a new outlook for the country at its inauguration. Two of the frontline presidential candidates represent the inability of the country to renew its pool of political leaders to inspire hope of national transformation.

But change will come to the country, nevertheless. The options for fundamental change may have been limited as the presidential tickets of the two major parties – APC and PDP – and the party that started out during this election cycle as the “third force”, African Democratic Congress (ADC), went to the highest bidders. But everyone knows that the country cannot continue on its present road, and the performance of President Buhari on security, the economy, nation-building, and foreign affairs has been so dismal that it can easily be beaten.

Historic challenges in Nigeria

Nigeria has grappled with internal insecurity and poor management of its energy and foreign exchange markets for a long time. However, these national challenges reached their apogees in 2022. From the peripheries of Northern Nigeria where Islamist terrorists have been operating for years, terror became national during the year and the nation’s capital was not spared physical and psychological traumas. For instance, a train on the Abuja-Kaduna corridor was attacked in March and 168 of its passengers were abducted. By the time the last batch of 23 survivors were released in October, N6 billion had been reportedly paid to the terrorists as ransom and eight passengers on the ill-fated train had been killed. Incidents of terror attacks and kidnapping for ransom frequently occurred in virtually every part of the country.

According to Jihad Analytics, Nigeria became the second most terrorised country in the world in 2022, after Iraq and ahead of Syria. In the first half of the year, Nigeria recorded 305 terrorist attacks, compared to 337 in Iraq and 142 in Syria – two countries that are war-ravaged. Terror attacks in Nigeria affect economic production, household income, and social development, and are therefore a major factor in the ascent of poverty to its highest level in the country. The 2022 Multidimensional Poverty Index by the National Bureau of Statistics (NBS) shows that 63% of the Nigerian population (i.e., 133 million Nigerians) are multidimensionally poor.

Highlighting the mismanagement of the country’s hydrocarbon resources, Nigeria lost an estimated $2 billion to oil theft in 2022. Due to official corruption, billions of dollars of the country’s oil revenue are unaccounted for. The weakness of the state to manage the one commodity that it depends on for over 90% of its foreign exchange revenue became absurd with the industrial level theft of its crude oil.

The subsidy programme on petrol completes the trifecta of direct mismanagement of the country’s oil industry. While Nigeria exports crude oil, it depends on the importation of petrol, subsidising the pump price to make the product more affordable to the people. It is estimated that petrol subsidy would have gulped close to N4 trillion in 2022, based on the official figure of N2.565 trillion expended on the programme in the first eight months of the year. The year-end figure approximates to 40% of the actual government revenue or 73% of the amount budgeted for capital expenditure.

One of the indications that the subsidy programme is unsustainable was the return of petrol scarcity in the country in 2022. By December, petrol scarcity which had been reported in parts of the country for months, became national. The programme that is meant to stabilise the supply of petrol has, ironically, been a guarantee of episodic scarcity of the product as the government struggles to pick up the bill. Thus, the people welcomed the new year while thinking how they were going to fuel their vehicles and off-grid power generators.

With regard to the exchange rate, the naira fell by 4% in the official market and plunged by 20% in the parallel market last year. As of the end of 2022, the naira closed with a gap of approximately N340.00 between the two exchange rates. The downward volatility in the naira value has continued to drive up inflation, and the sharp disparities in the official and parallel markets rates have served to deter foreign investment in the country.

Fostering change in Africa’s largest economy

A new administration later in the new year will surely bring personnel changes to the security establishment, policymaking, and government’s operations. The President is officially the Commander-in-Chief of the Armed Forces. President Buhari will also cease to be the Minister of Petroleum Resources when he leaves office. While the composition of a new cabinet to steer government’s business would be anticipated when the new president has been elected, the fate of the CBN Governor, Godwin Emefiele, whose tenure runs till June 2024, will likely attract the most curiosity.

The CBN that Emefiele superintends has irredeemably failed to achieve its core mandate of financial and price stability. While still in office, he dabbled in politics and wanted to contest the 2023 presidential election. In a highly polarised Nigeria, he may have also offended some interests by favouring others. But ideally, he should be allowed to complete his tenure as a mark of respect for the independence of the Central Bank. However, his likely fate widened in December when the Department of State Security (DSS) reportedly wanted to arrest him on allegation of financing terrorism.

On a broader note, each of the three presidential contenders will have varying degrees of handicap in introducing needed, wholesome change if elected president. The ruling APC candidate, Bola Tinubu, has said he will continue the policies of President Buhari. He will also be constrained to work with his party people, some of whom have failed to make any serious impact since 2015. The hope that Nigeria would take the threat of climate change more seriously is diminished by the cavalier attitude of the former Lagos State Governor to the global agenda. And his political strategy prioritises personal loyalty; in which case performance becomes a secondary consideration for him.

Atiku’s candidacy reflects how the main opposition party, PDP, has continued to hug its past. For 20 years, the party has been stuck with a serial presidential aspirant who was the vice president from 1999 to 2007. The old personnel will likely stay with old ideas, which, in any case, he would rightly feel validated, if elected.

If Atiku becomes president, it would be by a narrow margin of victory – a plurality vote in the first ballot or a slender majority in a likely run-off – overwhelmingly delivered by northern Muslims. Lack of cross-country acceptance undermined the administration of President Goodluck Jonathan and made President Buhari to not be inclusive with his administration. The incumbent President told the US National Democratic Institute in July 2015, “constituencies that gave me 97% [of their votes] cannot in all honesty be treated, on some issues, with constituencies that gave me 5%.” Because of the convention of power rotation between the North and the South since 1999, Atiku could also be deemed to be running the time of a southern president after a northern President Buhari would have been in office for eight years, with Muslim-north vs. Christian-south political polarisation eviscerating nation-building and economic programmes.

Of the three, Peter Obi of Labour Party represents the best chance for a more profound change. He cannot be president without a sizeable proportion of northern Muslim votes, in addition to substantial votes of southern and middle belt Christians. Thus, his administration would likely enjoy popular acceptance. The enabling ethos of his presidency would be fairness, equity, and justice – the considerations that in part are driving his support. His character, as publicly known, also suggests he will not depart from the values that propelled him into office. What remains to be seen is whether his vision of transitioning the economy from “consumption to production” is backed by a clear strategy or it is merely a political slogan. But his success in the private sector suggests he understands the principles of creating and delivering value.

A stable Nigeria is important for global stability. The country is currently the sixth largest in the world by population. So far, some of the rich countries have tried to capitalise on Nigeria’s malaise to lure some of the country’s best trained professionals and key service providers to emigrate to theirs. What to do with the rest of the 216 million population if the country implodes is a different matter. Nigeria constitutes risk and opportunity the world cannot ignore, and 2023 will provide a major test of the commitments to the country’s stability and progress by its internal and external stakeholders.

Nigeria will also be impacted by global and external risks that may challenge the world in 2023. Climate risk, excessive partisan polarisation, threat of pandemic, economic challenges, war, and social strife are key threats the world faces in the new year.  

Climate risk

2022 witnessed historic levels of climate disasters around the world. In Nigeria, flood devastated many parts of the country. The scale of the devastation of farmlands and infrastructure by floods necessitated President Buhari to send a supplementary appropriation bill of N819 billion to the National Assembly for approval in December, to fix the affected infrastructure and forestall food shortage.

An IMF publication last September identified the lack of resilience to climate change as the critical factor underlining food insecurity in sub-Saharan Africa, causing lasting adverse macroeconomic effects, especially on economic growth and poverty.

Across South Asian countries including Pakistan, Bangladesh, India, Afghanistan, Nepal, and Sri Lanka, floods of historic magnitudes caused over 3,700 deaths during the year. According to World Bank’s estimate, floods could cost the region up to $215 billion a year until 2050 and raise the number of climate migrants to over 40 million. Among the vulnerable populations to the extreme weather event were children who were cut off from school by the floods or because their school buildings were destroyed.

Climate change is intensifying weather variability. The deadly heatwave in the spring witnessed the highest temperatures in 122 years in Pakistan, only to be followed by record-level monsoon-season flood. In the West, a summer of historic high temperatures has been followed by freezing conditions. Over 250 million people in the U.S., representing 60% of the country’s population, were affected by extremely cold weather over the Christmas holidays. Thousands of flights were cancelled, and many states were without power for days, to underline the economic impacts of the winter storm, in a year that three hurricane landfalls also devastated U.S. mainland coast.

According to a multi-agency report, United in Science 2021, greenhouse gas concentration in the atmosphere has continued at record levels, committing the planet to “dangerous future warming.” Despite the grim prospect, a new UN climate report shows that the current commitments to climate actions by countries are not enough to limit global average temperature rise to 1.5 degrees Celsius by the end of the century.

The climate risk, however, comes with opportunities to invest in new industries including renewable energy and create resilient economies. Addressing climate vulnerabilities can also provide a new vista to fighting poverty through investments in adaptation programmes. Hopefully, 2023 will see an uptick in commitments to climate issues, after the setback of the Covid-19 pandemic.

Excessive partisan polarisation

The major political risk event that will likely seize the world’s attention, even though its impact could be limited to the country concerned – but not ruling out negative spillover effect – is excessive partisan polarisation in the U.S. The Republicans won a narrow majority in the House of Representatives during the 2022 midterm elections and are poised to take control of the lower legislative chamber this January.

With a Democratic White House and control of the Senate, the House Republicans will have limited scope to change the policy direction of the U.S. government. Some of the policies that have global impacts – including U.S. effort to contain China – are already locked in bipartisanship. However, excessive partisanship remains a risk to the government, through a likely politically motivated investigation of the Biden administration (and his son, Hunter Biden) and even including efforts to impeach the President. While these efforts may go nowhere even among the majority of House Republicans, dangerous rhetoric by the vocal minority among them could stoke extremism and conspiracy theories within and outside the country to challenge duly elected governments and cast further doubts on continued durability of the liberal democratic order.     

Threat of pandemic

Two years since the Covid-19 pandemic, preparedness for the next infectious disease – whether it is of a pandemic or endemic nature – has been in the discussions by global and national health-policy experts and concerned global philanthropic institutions. But by the end of 2022, the possibility of a renewed threat of Covid-19 had emerged in China. Following months of criticism of China’s Zero-Covid policy in the Western media as draconian, and pockets of protest in Mainland China, the communist government of President Xi Jinping rolled back many of the restrictions in early December. What have followed are spikes in Covid cases and deaths in the country.

An out-of-control spread of the viral infection could necessitate lockdown. If such restriction becomes widespread in the country, it could spook global supply chain again and further slowdown the post-pandemic economic recovery. Already, reports of shortages in the supply of healthcare commodities have been reported in China, which accounts for a significant percentage of global supply.

A resurgence in Covid-19 in a major country, including China – the world’s second largest economy by nominal GDP – can trigger global economic and public health concerns.

Economic challenges

High inflation has been the major global macroeconomic risk since the reopening of economies after pandemic lockdown. Russia’s invasion of Ukraine has further stoked inflationary pressure through high energy prices and shortfalls in the supply of grains from the war region. In response to high inflation, the major central banks began to hike policy-setting interest rates, the U.S. Fed being the most aggressive.

With an uncertain global economic growth outlook, coupled with the impact of higher interest rates, many economists believe there could be a global recession in 2023. While such concerns had become muted at the end of last year, economic stress remains on the horizon. The risk of further economic downturn is significant in the UK, as years of underinvestment in public goods and services, the cost of living crisis, and the impact of Brexit have begun to weigh heavily on the economy post-pandemic. In December, several labour unions called for industrial actions. If economic weaknesses continue during the year, it is likely to unsettle the new government headed by Prime Minister Rishi Sunak and reintroduce leadership quagmire in the country.

In the meantime, Nigeria and other developing countries have been on the wrong end of the UK’s efforts to address the shortfall in its domestic labour supply. After encouraging the emigration of doctors and other health workers from Nigeria, qualified teachers – who are already in short supply in the country – are also being lured to Britain. The immediate and long-term impact of the UK’s immigration policy will be severe for the developing countries affected.


The war in Ukraine, which appears unwinnable by conventional means, has continued to affect global supply and prices of food and energy commodities. The lose-lose situation has seen the continued isolation of Russia in the international community and global markets. On the Ukrainian part, the toll of the war on lives and infrastructure has continued to mount. Western support for Ukraine, notably from the U.S., will keep it fighting its more powerful neighbour on the canvass of the country.

So far, Russia has limited the use of its options, although its invasion of another sovereign nation remains condemnable. But the more the war wears on, the greater the likelihood of escalation and other parties being drawn into the fray. This presents the dimension of global impacts of the war beyond the current food and energy price inflation – or the intensification of both. Perhaps this is why the U.S. seems to favour negotiation of peace between the two warring countries. But the Ukrainian President, Volodymyr Zelenskyy, seems to want to negotiate from a vantage position.

Social strife

Months of protest for civil liberties in Iran amid high-handed, desperate response by the government of President Ebrahim Raisi is fostering social strife in the country. Iranian activists and youth have hit the streets for months now following the death of Mahsa Amini, a 22-year-old woman from Kurdistan, in the custody of Tehran’s moral police who arrested her allegedly for not wearing her hijab correctly. A face-off between the protesters and the government has crossed 100 days, with the former vowing to not go back on their demands.

Iran that is internally unstable is not good news for the world’s peace and security. For instance, the current situation is a hindrance to the likelihood of getting the country back to the negotiating table to halt its nuclear programme. During the protest which has further alienated Iran in the international community, Tehran has been selling Russia lethal drones for use in its war with Ukraine. This raises the spectre of a proxy war or even direct conflict with Iran.


Global peace is essential to solving the world’s challenges, including food insecurity, imperilled energy market, climate change, and macroeconomic instability. These key issues will define the world we live in in 2023.

Jide Akintunde is Managing Editor of Financial Nigeria and Director, Nigeria Development and Forum.

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