Reuters has a good factbox about the key issues facing Nigeria right now.
PRESIDENTIAL SUCCESSION
President Umaru Yar'Adua returned from three months in a Saudi clinic on Feb. 24 but remains too sick to govern, raising fears of a power struggle as his inner circle tries to maintain influence and undermine Acting President Goodluck Jonathan.
Jonathan has moved fast to assert his authority, demoting the former justice minister -- a close Yar'Adua ally -- and appointing feared and respected ex-military general Theophilus Danjuma as one of his top advisers.
He also sacked the country's national security adviser, a key member of Yar'Adua's inner circle, replacing him with Aliyu Gusau, another retired general seen as a potential presidential candidate in elections due by April next year.
Jonathan is a southerner, meaning he is unlikely to stand in the elections because of an unwritten agreement in the ruling party (PDP) that power rotates between north and south every two terms. Under the system, the next leader should be a northerner.
What to watch:
-- Yar'Adua dies or is declared incapacitated. This would mean Jonathan being sworn in as substantive president and the appointment of a new vice president, likely to be a northerner who will be the ruling party candidate in the next elections.
-- Cabinet, military reshuffles. Jonathan could make further changes to the cabinet and the top ranks of the security apparatus as he continues to purge the system of perceived enemies and the ruling party aligns itself for succession.
-- Elections brought forward. Nationwide polls, including the presidential race, are due by April 2011 but could be brought forward to as early as November if reforms before parliament are passed. That could mean the key ruling party primaries taking place as early as August.
NIGER DELTA
An amnesty programme brokered last year by Yar'Adua led thousands of gunmen to lay down weapons, the most concerted effort yet to win peace, bringing more than six months without significant attacks on Africa's biggest oil and gas industry.
But the programme stalled in Yar'Adua's absence and while Jonathan has made getting it back on track one of his top priorities, the peace has started to fray around the edges.
The main militant group MEND has said it is still waiting to assess progress by Jonathan before deciding whether to reinstate a ceasefire but a splinter faction claimed two attacks on Shell and Agip in early March.
Security experts say the fact that Jonathan is the first member of the Ijaw ethic group -- the biggest in the Niger Delta -- in the presidency means militants are reluctant to embarrass him as acting leader and blamed the attacks on renegades.
Nigeria's light crude is popular with U.S. and European refiners as it is easily processed into fuel products, meaning disruption to supplies can have a quick market impact. Attacks on the country's energy infrastructure helped lift global oil prices to record highs near $150 a barrel in 2008.
What to watch:
-- Sidelining Jonathan. Any perception that Jonathan is being undermined by Yar'Adua loyalists could trigger a reaction in the delta in the form of a warning strike against an oil installation, security experts say.
-- Statements from MEND. Many MEND field commanders accepted amnesty but they are unlikely to have handed over all of their weapons and it takes little to strike at thousands of kilometres (miles) of exposed pipeline in the jungle creeks. The group has been cautious in responding to events in Abuja so far but that could change if uncertainty persists.
-- Attacks on oil services companies. Firms including Shell , Chevron , ExxonMobil , Total and Agip have born the brunt of past attacks but MEND has warned any new unrest could also target suppliers and contractors.
ETHNIC OR RELIGIOUS UNREST
Clashes between Christian and Muslim gangs in central Nigeria, the country's main ethnic and religious fault line, have killed hundreds of people since the start of the year.
The violence is rooted in decades of resentment between Christian villagers and Muslim settlers from the north, who compete fiercely for control of fertile farmlands as well as economic and political power.
But the region is seen as a microcosm of the wider country, highlighting how sensitive it is to shifts in the balance of power between its main ethnic and religious groups.
The government has come under criticism for failing to address the root causes of the unrest -- poverty and discrimination -- and for failing to prevent violence from continuing despite the deployment of the military in January.
What to watch:
-- Further outbreaks of violence. Many Nigerians believe that such clashes are engineered by politicians. The last thing Jonathan needs as he steers government through a difficult period is major bloodshed at the heart of the nation.
-- Increased use of military. As much as three quarters of the rank-and-file in the Nigerian army are from the "Middle Belt", the border region between Muslim north and Christian south, and deployments in the region are highly sensitive, with the potential to expose the military's internal divisions.
POLICY STAGNATION
Nigeria's financial markets have so far largely shrugged off political uncertainty but matters could become more critical if the situation is not clear before the end of March, when a supplementary 2009 budget expires.
Government is already the country's biggest spender and the 2010 budget, which foresees a rise in spending of a third, will need to be signed by the head of state if the government is to avoid paralysis, civil servants are to continue being paid, and infrastructure projects are to progress.
With the election campaign period due to begin later this year, Nigeria has a short window of opportunity to pass badly needed electoral, banking and oil sector reforms before political minds focus instead on winning votes.
Key policy victims could include reforming electoral laws, the oil sector and banking, as well as the renewal of key oil licences held by Royal Dutch Shell and Chevron:
What to watch:
-- passage of the 2010 budget
-- electoral reforms could bring the next polls forward to as early as November and are meant to help avoid the sort of chaos that marred the 2007 vote which brought Yar'Adua to power.
-- if the Petroleum Industry Bill (PIB) touted by government as key to solving everything from funding woes at joint ventures with foreign oil firms to ending fuel subsidies fails to pass before election campaigning begins around June, it is unlikely to see the light of day before mid-way through the next electoral term.
-- banking reforms driven by Central Bank Governor Lamido Sanusi were helped by strong presidential support. Sanusi badly needs parliament to pass legislation to create an asset management firm that could soak up bad bank loans and get the banks lending again.
FINANCIAL MARKETS
The naira currency NGN=D1 remains broadly stable against the U.S. dollar and equity valuations .NGSEINDEX look attractive after sharp falls last year, analysts say.
The currency stability is seen continuing to lure fixed income investors in the long term, the amnesty in the Niger Delta should boost oil output if it holds, and the 140 million population still shows strong potential as a consumer market.
What to watch:
-- Passage of the Asset Management Company (AMC) legislation, key to making banks rescued in a $4 billion bailout last year saleable and boosting confidence.
-- Credit flows. The central bank has made getting credit flowing to the real economy again its top priority but so far the impact has been muted, with lenders still reluctant to extend credit, keeping a lid on private sector spending.
-- Any currency weakness. Previous bouts of political instability have prompted capital flight, but with much foreign capital already having left in the wake of the global credit crisis the risk this time is seen as relatively limited.
By: Brant
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