By Nick Tattersall

LAGOS, Sept 1 (Reuters) - Nigeria is due to hold elections
in four months but uncertainty remains over whether President
Goodluck Jonathan will stand, who his challengers might be and
whether electoral reforms can be enacted in time.

Jonathan has declined to say whether he will seek the ruling
People's Democratic Party (PDP) nomination for the polls, but
the primaries are expected in the coming weeks and recent policy
announcements suggest he would like to make a bid.

His candidacy would face opposition from some factions
within the ruling party because of an unwritten agreement that
power rotates between the Muslim north and Christian south every
two terms. Under the deal, the next term should go to a
northerner but Jonathan is a southerner. [ID:nLDE66Q1EY

Whether he runs could have implications for security in the
restive Niger Delta and parts of the north, as well as for the
passage of key pieces of legislation including reforms to the
mainstay energy industry.

Following are some of the factors to watch:

ELECTION TIMETABLE

Parliament has passed an amendment to the constitution
bringing elections forward to January from April, with the aim
of allowing electoral disputes to be settled before the new
presidential term starts in May.

But there is debate over whether Jonathan must also approve
the changes before they can take effect.

The Independent National Electoral Commission (INEC) has
said it is assuming the amendment holds and is aiming for
January polls, but has yet to announce a full timetable.

Jonathan has signed a new electoral act which foresees
staggered parliamentary, presidential and state governorship
polls over a period of days or weeks.

The act also says INEC must publish the date of the election
not less than 90 days in advance, meaning it will have to give
notice in September if the polls are to be held in January.

Local newspaper reports have suggested the PDP primaries
could start in mid-September and be completed a month later.

The accelerated timetable leaves INEC little time for a
badly needed overhaul of voter lists, vital if Nigeria is to
avoid a repeat of chaotic 2007 elections.

One advantage over 2007 is that many more of the state
governors are incumbents seeking second terms, which means the
regional votes are likely to be less contentious.

But if INEC fails at least to overhaul voter lists, there is
a likelihood of legal challenges overshadowing the beginning of
the new presidential term.

What to watch:

-- The election timetable, which will put pressure on the
PDP to organise primaries, or could be pushed back.

-- Warnings from opposition parties that the vote will not
be credible, signalling a likelihood of court challenges.

RULING PARTY PRIMARIES

The PDP has won all three presidential races since the end
of military rule just over a decade ago, turning Nigeria into a
virtual one-party state and meaning the winner of the primaries
is almost certain to go on to win the polls.

But uncertainty over who the PDP nominee should be means
this time the race remains wide open.

The PDP has recognised Jonathan's right to contest in 2011
on what would have been a joint ticket with late president Umaru
Yar'Adua, but has stopped short of giving him outright backing,
saying other candidates are free to challenge him.

Former military leader Ibrahim Babangida and former vice
president Atiku Abubakar, both northerners, have said they will
seek the ruling party ticket.

Should Jonathan decide not to run, his supporters in the
Niger Delta could launch protests. On the other hand, should the
PDP decide to back him, this could stoke resentment among
northern youths who have already held small-scale protests.

What to watch:

-- Jonathan's decision. He is only likely to declare he will
run if he is certain he can win the ruling party nomination. A
declaration would suggest he has won that confidence.

-- The emergence of a strong northern candidate who would be
a challenger to Jonathan and the preferred nominee for PDP
members wishing to maintain the rotation principle.

POLICY AND SPENDING

Recent policy announcements from the presidency have been
campaign pledges in all but name, most notably the unveiling of
a multi-billion dollar privatisation plan to try to end the
country's chronic power shortages.

Should Jonathan win re-election, the reform drive --
including overhauling the oil industry and continued commitment
to banking reforms -- is unlikely to change, a continuity in
policy that would be welcomed by many investors.

Wide-ranging legislation to overhaul the mainstay oil and
gas industry is before parliament, while the oil minister has
also said the OPEC member plans an oil licensing round this
year, but time is running out as the polls approach.

Both the licensing round and the power sector privatisation
mean major contracts are due to be awarded. Critics point out
that such juicy deals have in the past been the oil which
greases Nigeria's political patronage system, and fear that
political interests will be in play as contracts are awarded.

Government spending is also on the rise.

Some $4.7 billion in revenues and windfall oil savings were
distributed to federal, state and local government in budgetary
allocations for July, one of the biggest ever monthly
disbursals.

The payout, a large portion of it to state governors who
will have a say in Jonathan's political fate at the polls, left
the country's excess crude account -- in which windfall oil
savings are meant to be kept -- with just $460 million, down
from $20 billion at the start of this presidential term.

What to watch:

-- Further fiscal indiscipline. Monthly disbursals and
spending are likely to remain high as election campaigning gets
under way, further damaging Nigeria's fiscal position.