Former military ruler Muhammadu Buhari’s victory in Nigeria’s presidential election will probably mean that financial aid will dry up for militants within the country’s oil region, where groups have shut because one-third of production in the past years.
As a result, RBC Capital Markets is warning investors to not dismiss the threats produced by groups for example Movement for the Emancipation of the Niger Delta (MEND) to cripple Nigerian oil output if incumbent Goodluck Jonathan was defeated. Benefits show Mr. Jonathan lost the election by a lot more than 2.5 million votes.
RBC’s global head of commodity strategy, Helima Croft, believes Government Ekpenmupolo, the previous head of MEND, could be particularly dangerous. He received some of the most lucrative government contracts and retains a large arsenal of weapons, together with a warship, according to local media reports.
“Given the high financial stakes of these individuals and their proven track record of taking down production, their threats can\’t be entirely dismissed,” Ms. Croft said inside a report.
Mr. Jonathan, who received strong support from Nigeria’s oil region, redirected significant amounts of government patronage to power brokers in the Niger Delta. However, Ms. Croft noted that former militants stand to lose lucrative contracts and face prosecution for oil theft when Mr. Buhari takes office, particularly since the government faces financial pressure due to falling oil prices.
“Hence, they might prove to be dangerous spoilers within the coming days,” the strategist said. “It will likely be important to watch events within the Niger Delta over the next few weeks as Jonathan\’s defeat raises the risk of a return to production shut-ins.”