Seen as a potential source of instability, the relatively peaceful Nigerian presidential election has helped improve confidence in Africa’s biggest economy, which has been affected by many complex challenges.

While the risks of political violence and constitutional crisis may have been avoided, falling oil prices, currency devaluation, capital flight, corruption and continuing Islamist militant insurgencies in the north remain a concern for the Sub-Saharan country. Yet, there are reasons to expect Nigeria to hold strong and keep growing.

Oil concerns can inspire economic diversification.

One of these is that the Movement for the Emancipation of the Niger Delta (MEND) – a militant group known for carrying out violent acts in the area until it agreed to a ceasefire in May 2014 – congratulated General Muhammadu Buhari on his victory and President Goodluck Jonathan for conceding defeat.

The reaction to the victory of Buhari, a northerner Muslim, in the southern, oil-producing, Christian area was a delicate issue. Indeed, according to Murtala Touray from IHS, concerns remain in the short term due to “the renewal of the amnesty programme, due to expire in 2015, and in particular the multi-million dollar contracts, which were awarded by Jonathan’s administration, to secure oil installations”.

Rolake Akinkugbe, vice president and head of energy and resources at FNB Capital, remains optimistic: “There is always a possibility of a resurgence in unrest in the oil-rich delta, but I think the incoming administration’s plan for oil sector management, from a commercial, social and national perspective could go a long way in quelling any discontent,” she tells GTR.

Looking at the overall economic outlook, the fall in oil prices represents an opportunity in the long term to diversify the economy, says Edward George, Ecobank head of research: “The service sector is growing very strongly, particularly in finance, telecoms, also trade and film industry, so there is a lot of other activities that are developing and growing.”

His colleague, researcher Axelle Fofana, points to agriculture as another industry that will benefit from diversification efforts: “For many years, the agricultural sector has suffered from a lack of investment. But it still remains a key foundation of the Nigerian economy representing 22% of GDP in 2012. Moreover, the sector is benefiting from more interest from the government, which is looking to revitalise it and to increase the diversification of its economy. This is part of the Vision 2020 plan which aims to modernise the agricultural sector and to ensure self-sufficiency in key food crops.”

Expected reforms may take time, but will improve efficiency eventually.

Fofana thinks it would take time for a new government to settle in, and therefore swift, wholescale policy change is rather unlikely. But as Buhari’s campaign slogan was “Change”, people expect him to make a difference in the way the country is run, from tackling corruption, to facing up to Boko Haram, to putting Nigeria on a stronger growth path.

Reform may not be easy. “Buhari will face significant challenges in implementing change given the vested interests, culture of corrupt practice, and aversion to compliance,” says Touray.

According to Fofana, Nigeria can expect more authority and the development of a new, more centralised managerial style in order to fight corruption. In the short term, this would lead to resistance from government officials, which in turn would undermine government decision making, leading to slower growth. Yet in the longer term, this administrative restructuring would probably generate more efficiency. Moreover, Buhari is expected to make greater efforts to have the Petroleum Industry Bill (PIB) passed as it would attract investment from international oil companies.

Akinkugbe is more sceptical about the bill’s prospects: “I don’t expect to see much change in pace and momentum, except if the government breaks the reforms into phases – perhaps prioritising the reform of the Nigerian National Petroleum Corporation (NNPC) in the first phase,” she says. Overall, according to her, the business community would like to see a degree of policy stability, and a real effort to tackle the infrastructure bottlenecks that have kept Nigeria from fulfilling its full potential.

Change is already underway.

Regardless of the economic reform, something in Nigeria has changed already: last week was the first time the country elected an opposition candidate over the incumbent leader. President Jonathan and Buhari vowed to accept the election result, whatever it may have been, as to prevent a return of the violence that killed 800 people in 2011, when the two candidates last faced each other in the Nigerian presidential election.

Jonathan, whose party had been in power since 1999, kept his promise. He called Buhari to congratulate him on his victory, and invited those people who took issues with the result to follow the due process rather than taking to the streets. Jonathan is expected to hand over power to Buhari officially on May 29.

Buhari had ruled the country for 20 months following a coup in 1983, but has now fully embraced democracy.