Nigeria’s February elections: the risks to companies operating in the region

As 2019 begins, attentions are turning towards the Federal Republic of Nigeria, where nationwide elections to elect the President and the National Assembly are due to take place on 16 February.

Nigeria is the most heavily populated country in Africa, with some 198 million citizens. It is also the richest, having overtaken South Africa in recent years to become the continent’s largest economy, making it very attractive for business investment and leading to a keen interest globally in the results of elections.

While a number of people have put forward their candidacy for the role of president, the contest will in reality be between just two contenders: the incumbent, President Muhammadu Buhari, and Atiku Abubakar, who was previously vice-president from 1999 to 2007.

The major campaign issues have changed little since the last elections which took place in 2015: terrorism, corruption, the economy, poverty, unemployment and violent disputes over land issues and resources in rural areas will all feature.

Organisations with business interests in Nigeria should be aware that street demonstrations typically take place during elections in the country, often leading to violent clashes and damage to property: in 2015, the results of the votes were disputed even before they were announced, with protesters claiming the election had been rigged, and accusing then-President Goodluck Jonathan of responsibility for the killings of opposition campaigners.

As well as the physical and economic risks associated with the elections, companies should also be be aware that cyber-crime poses a huge problem in Nigeria.

According to reports, the costs of cyber-crime in the country increased by 35 percent between 2016 and 2017, with yearly losses totalling some N127 billion.

The sectors worst hit were banking and telecommunications. The greatest losses were due to insider threats, i.e. employees or contractors with access to systems using their abilities and knowledge to carry out criminal activities. Social engineering and identity theft were also highlighted, along with malware attacks, data theft, spam and phishing campaigns, online fraud and ransomware attacks.

Nigerian internet scams - targeting organisations and individuals both inside the country and worldwide - have of course attracted attention for some years, with highly-organised groups participating in a wide variety of fraudulent activities.

SilverTerrier is an example of one such group: estimated to comprise around 300 Nigerian hackers, it is believed to have carried out around 500,000 attacks in recent years, targeting businesses across all major industry sectors; the campaigns have resulted in huge financial losses globally.

Those taking part in these fraudulent schemes typically take little care to remain anonymous due to the lack of law enforcement in Nigeria and can often easily be identified on social media.

Poor cyber-security practices in the country undoubtedly add to the problems; further, a large majority of cyber attacks go unreported.

While the banking and telecommunications sectors mentioned above are heavily targeted due to the highly lucrative data that they hold, it is worth noting that energy companies operating in Nigeria are at particular risk of both physical and cyber attacks at this time.

Even in May 2018 these organisations were warning of possible attacks by militant groups in the run-up to the elections. Ladi Bada, managing director and chief executive of Shoreline Natural Resources, highlighted some of the major issues when he said politicians can cause “mayhem”. He added: “There will always be unrest, because the situation is not perfect. If there is no infrastructure in a particular area, there’s no electricity, there’s no water, school services are bad, an oil company cannot provide all of this. So until government also starts to do its part in increasing social amenities, making people feel a part of governance, there will always be some level of dissatisfaction.”

An example of the types of demonstrations facing the energy industry was seen in 2018 when protesters in the Delta State rallied against Chevron Nigeria Limited, storming facilities and refusing to leave, claiming that the company was depriving them of electricity, water and jobs. In August, following disputes over employment contracts, activists from the Niger Delta Musketeers announced ‘Operation Black September’ which aimed to target all facilities of Chevron Nigeria in the Niger Delta.

Royal Dutch Shell’s local unit in Nigeria has also issued alerts about the threat of attacks on oil wells, noting that both local and international oil companies are at severe risk.

While these warnings concern the threat of physical attacks on facilities, energy companies are certainly aware that highly damaging cyber attacks targeting their sector are also likely to be attempted by hackers seeking either to disrupt operations to some degree during the election period - thereby highlighting particular grievances associated with the industry - or to access systems for data theft or industrial espionage reasons.

All organisations currently active in all industrial sectors in Nigeria are advised to ensure that both their physical and cyber security practices are fully up-to-date.

And finally, what about the question of foreign interference in Nigeria’s elections?

This issue has dominated political debate in the last few years, with accusations that Russian state-sponsored groups have been responsible for a whole variety of activities aimed at disrupting western democracy, including hacking into the emails of the Democratic National Committee (DNC) in the run-up to the 2016 presidential elections in the US, or through disseminating fake news and propaganda during the Brexit campaign.

Interestingly, it was reported in April 2018 that the Nigerian presidential election in 2015 was also targeted, and that Cambridge Analytica (the now defunct company accused of carrying out a range of illicit and questionable activities during the Brexit referendum) was employed by a Nigerian billionaire to run a campaign in support of Goodluck Jonathan: a video was used to depict his opponent, Muhammadu Buhari, as a supporter of Sharia law and militant Islamism. A former Cambridge Analytica employee involved in the campaign described it as “voter suppression of the most crude and basic kind”.

The elections in Nigeria are the first important ones to be taking place across the world in 2019. Other notable ones which we will aim to cover in this blog include those in Indonesia in April, and in the European Union, South Africa, Belgium and the Philippines in May.