Crux time for Nigeria as election cycle begins

LAGOS (Reuters) - Nigeria enters the most important three months of its recent political history this week, beginning elections which could chart its path for further reform or plunge its most volatile regions back into violence.

The build-up to presidential, parliamentary and state governorship elections in April risks exposing ethnic and religious fault lines in the African giant, whose more than 200 ethnic groups generally live peacefully side by side.

The first key contest is the People's Democratic Party (PDP) presidential primary on Thursday, set to pit President Goodluck Jonathan against ex-Vice President Atiku Abubakar, a rivalry which has left the PDP more divided than ever.

Such has been the dominance of the ruling party in Africa's most populous nation since the end of military rule in 1999 that its candidate has won every presidential race since then. This time, it has come dangerously close to splitting apart.

The controversy centres around a pact in the PDP that power should rotate between the mostly Muslim north and largely Christian south every two presidential terms, a rhythm which Jonathan's candidacy would disrupt.

Jonathan's defeat could trigger protest in the restive Niger Delta, his home region and the hub of Africa's biggest oil and gas industry. But his victory would be taken badly in parts of the north, which has also seen its share of unrest.

"Never before in Nigeria's modern history has her security apparatus needed to be so well-informed, co-ordinated and directed," Stephen Davis, a former adviser on the Niger Delta to two Nigerian presidents, wrote in the Next newspaper.

POTENTIAL FLASHPOINTS

Nigeria is roughly equally split between Christians and Muslims who live peacefully together in almost all of its major cities. But regional rivalries bubble under the surface and the nation has been rocked by acts of violence in recent weeks.

A New Year's Eve bomb in the capital Abuja killed four people a week after co-ordinated blasts and subsequent clashes killed 80 in the central city of Jos, the scene of frequent bursts of ethnic and religious unrest.

Soldiers fired into the air to disperse youths who set up burning barricades in Jos on Saturday to protest the killing of seven Muslims in a nearby village, tensions which have been exploited by politicians in the past.

Political rallies have also turned violent in some areas.

Gunmen killed several supporters of an opposition governorship candidate in Jonathan's home state of Bayelsa in the Niger Delta on Friday during a gathering at his home, paving the way for a violent campaign period.

"No amount of bombs, intimidation and AK47s will deter us from casting our votes and kicking this government out," Timi Alaibe, a former presidential adviser who is running against the sitting state governor, told Reuters after the attack.

A re-run governorship election in neighbouring Delta state passed off peacefully last Thursday, but there were isolated acts of sabotage and opposition supporters have complained of rigging, raising the prospect of protests there.

WEAK MANDATE?

History has always favoured the incumbent in Nigerian elections. The political system is based on patronage, its wheels greased by oil revenues, and whoever holds the purse strings has traditionally been able to curry favour.

These elections could be costly. Nigeria's windfall oil savings have dropped from $20 billion in 2007 to less than $1 billion now and foreign reserves are down a quarter on a year earlier despite rising oil prices and output.

Twenty of the 27 PDP state governors, who form a powerful caucus in the ruling party, have publicly said they will back Jonathan on Thursday, but there is no way of telling whether they will ultimately do so at a secret ballot.

Legal battles in the PDP have already raised the prospect of protracted court challenges whoever the eventual winner is, the sort of uncertainty which undermined the first years in office of late President Umaru Yar'Adua and hampered his ability to push through reform.

There is much at stake.

Sub-Saharan Africa's second biggest economy is one of the world's most keenly-watched frontier markets and its political weight in the region means the fallout of the polls will have implications beyond its own borders.

Billions of dollars of foreign investment in the mainstay oil and gas industry are on hold while reform legislation, which will change everything from the tax framework for the sector to the allocation of oil acreage, sits before parliament.

If it fails to pass before the polls, a new administration could make changes and further delay its passage, raising the risk that oil firms will take new investment elsewhere.

Jonathan's blueprint for privatising the power sector, which could also bring billions of dollars a year in investment from foreign utilities firms, could also be set back.

(For more Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com/ )

(Additional reporting by Samuel Tife and Segun Owen in Yenegoa, Shuaibu Mohammed in Jos, Camillus Eboh and Felix Onuah in Abuja; Writing by Nick Tattersall, editing by Myra MacDonald)

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