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What's Next for Nigeria?Sure, the elections were rigged, but the economic future is relatively rosy.

By Ian BremmerPosted Thursday, May 10, 2007, at 11:36 AM ET

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In April, June Thomas said, "The nation known around the world for corruption and e-mail scams is running its presidential election like a litigious Manhattan co-op board." Brendan I. Koerner explained why so many scam e-mails originate in Nigeria. Scott L. Malcomson reviewed Wole Soyinka's "theater of dictatorship," and Nancy Palus rounded up the African press's coverage of Nigeria's 2003 election.

Short of a dramatic and unlikely attempt by the outgoing National Assembly to impeach Obasanjo, annul the elections, and install an interim government, Nigeria will mark the country's first (relatively) peaceful handover of power from one elected civilian government to another on May 29. Beneath that story, however, is a slide toward a kind of democratic authoritarianism, a system in which "managed" elections are used to give one-party rule a veneer of democratic legitimacy. Only the country's judiciary, which foiled Obasanjo's efforts to exclude his vice president and personal rival Atiku Abubakar from the presidential ballot, retains some independence.

But while democracy advocates will rightly condemn this authoritarian trend, the country's economy will draw near-term benefits from it. With tighter control of Nigeria's fractious political environment, Yar'Adua will have a freer hand than his predecessor to push through politically controversial reform measures and to deliver on promises to delta rebels.

What's more, there is another source of near-term stability. In a state as socially and culturally diverse as Nigeria, most of the political players recognize that only mastery of the art of the stability-enhancing deal can ensure long-term personal prosperity. The new president knows he must find common ground with some of his rivals to ensure that Nigeria's have-nots do not pursue political and economic goals through violence and that the military remains on the political sidelines.

Atiku Abubakar and his Action Congress party have called for public protests and a judicial reversal of his electoral fortunes. Unless Yar'Adua moves to strike a deal with him, offering positions in his government to Abubakar allies and dropping corruption charges against him, for example, he may find himself forced to up the stakes in Nigeria's elite infighting by jailing or exiling him.

Nigeria's longer-term stability may well depend on Yar'Adua's ability and willingness to make the right deal. Obasanjo is set to become chairman of the ruling party, a position from which he can protect his political and financial interests and ensure that Yar'Adua doesn't give his rivals too much slack. If he objects to any rapprochement between Yar'Adua and the opposition, the new president will have to either abandon the deal or risk alienating the still-influential Obasanjo, the man who made him president. Whichever deal Yar'Adua makes, he may have to resort to authoritarian tactics to ensure it can be enforced.

But in the meantime, the United States, India, China, and others will continue to import Nigeria's light, sweet crude oil. As global demand for energy increases, foreign direct investment in Nigeria's energy sector will grow. Whatever the longer-term risks Yar'Adua's deal-making may generate, Nigeria's near-term economic outlook is poised to defy low market expectations.