In 1989 Babangida legalized the formation of political parties, and after a census was carried out in November 1991, the Independent National Electoral Commission (INEC) announced on January 24, 1992 that both legislative elections to a bicameral National Assembly and a presidential election would be held that year.
Babangida banned all political parties and formed two political parties by himself, namely the SDP (Social Democratic Party) and NRC (National Republican Convention) and urged all Nigerians to join either of the parties, which the Late Chief Ajibola Ige famously referred to as "two leper hands." The two-party state had been a recommendation of the 17-member Political Bureau.
The legislative elections went ahead as planned, with the Social Democratic Party (SDP) winning majorities in both houses of the National Assembly, but on August 7, 1992, the INEC annulled the first round of presidential primaries, alleging widespread irregularities. January 4, 1993 saw the announcement by
Babangida of a National Defense and Security Council, of which Babangida himself was to be President, while in April 1993 the SDP nominated Moshood Kashimawo Olawale Abiola (MKO) as its presidential candidate, with the National Republican Convention (NRC) choosing Bashir Tofa to run for the same position. On June 12, 1993, presidential elections were finally held, but the results were held back although it was announced in some states that Abiola had in fact won 19 of the 30 states, and therefore the presidency.
Rather than allow the announcement of the results to proceed, Babangida decided to annul the elections.
Babangida then issued a decree banning the presidential candidates of both the NRC and the SDP from running in new presidential elections that he planned to have held. Widespread acts of civil disobedience began to occur, particularly in the Southwest region from which Abiola hailed, resulting in the killings. On July 6, 1993, the NDSC issued an ultimatum to the SDP and NRC to join an interim government or face yet another round of elections, and Babangida then announced that the interim government would be inaugurated on August 27, 1993. On August 26, amidst a new round of strikes and protests that had brought all economic activity in the country to a halt, Babangida declared that he was stepping aside as head of the military regime, and handing over the reins of government to Ernest Shonekan. Within 3 months of the handover, General Sani Abacha seized control of the government while Babangida was on a visit to Egypt.
The killing by a letter bomb of Dele Giwa, a magazine editor critical of Babangida's administration, at his Lagos home in 1986 was largely attributed to Babangida and remains a controversial incident to this day. In 1999, President Olusegun Obasanjo established the Human Rights Violation Investigation Commission headed by Justice Chukwudifu Oputa to investigate human rights abuses during Nigeria's decades of military rule. However, Babangida repeatedly defied summons to appear before the panel to answer allegations of humans rights abuses and questioned both the legality of the commission and its power to summon him. He was however represented by counsels, Mustapha Bashir Wali and Yahya Mahmoud. His right not to testify was upheld in 2001 by Nigeria's court of appeal which ruled that the panel did not have the power to summon former rulers of the country.
The Oputa Panel Report would conclude that "On General Ibrahim Babangida, we are of the view that there is evidence to suggest that he and the two security chiefs, Brigadier General Halilu Akilu and Col. A. K. Togun are accountable for the death of Dele Giwa by letter bomb. We recommend that this case be re-opened for further investigation in the public interest."
In an interview with the Financial Times on August 15, 2006, Babangida announced that he would run for president in Nigeria's 2007 national elections. He said he was doing so "under the banner of the Nigerian people" and accused the country's political elite of fuelling Nigeria's current ethnic and religious violence.
On the 8th of November, 2006, General Babangida picked up a nomination form from the Peoples Democratic Party Headquarters in Abuja, Nigeria. This effectively put to rest any speculation about his ambitions to run for the Presidency. His form was personally issued to him by the PDP chairman, Ahmadu Ali. This action immediately drew extreme reactions of support or opposition from the western population of the country. In early December, just before the PDP presidential primary, however, it was widely reported in Nigerian newspapers that IBB had withdrawn his candidacy to be the PDP's nominee to run for President. In a letter excerpted in the media, IBB is quoted as citing the "moral dilemma" of running against Umaru Yar'Adua, the younger brother of the late Shehu Yar'Adua (himself a former nominee to run for the Presidency during IBB's military dictatorship), as well as against General Aliyu Mohammed Gusau, given IBB's close relationship with the latter two. It is widely believed that his chances of winning were slim.
On 12 April 2010 his spokesman announced that he would be seeking the nomination of the ruling People's Democratic Party (PDP) for the presidency in the elections scheduled to be held in 2011. In a move unseen before in Nigerian politics he launched his official campaign website on the 9th August 2010, where visitors can interact directly with him.
Following a bombing in Abuja during Nigeria's 50th anniversary celebrations and the consequent arrest and interrogation of the Director General of Babangida campaign, Raymond Dokpesi, there were calls for him to quit the race. In addition, there were others who linked his affiliated to the blasts. He responded in saying it would be "idiotic to link" him with attack. Even before the blasts, however, some of his former loyalists, popularly called "IBB Boys," apparently asked him to quit the presidential race so as not to avoid being rubbished by a non-General.
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