There are clear and present dangers that the run-up to the 2023 general elections is already having a rippled negative effect on the economy if the current economic fundamentals are anything to go by.
Indications are that the major commanding height of the economy hitherto bustling with activities have suffered a lull with many players lamenting that things are indeed in dire straits.
Speaking with a cross-section of experts and analysts watching the economic trend, they expressed genuine fears over what they described as “unpalatable outcomes of the forthcoming general elections.”
The country is expected to have a new democratically elected president come May 2023, a development, experts have argued, has literally made governance suffer, no thanks to the abdication of responsibility by the current political players desperate for re-election.
Owens Chijioke, a major importer who deals on electronics at the popular Alaba International Market, along the Lagos-Badagry expressway, while speaking with our correspondent at the weekend lamented that the import market has been taking a lot of heat lately as inflation has been pushing cost high with many businesses recording losses and unable to break even.
“One of the fallouts of the 2023 elections is that the economy is in a shambles as we speak. We are battling with a weak naira and the exchange rate to the dollar is almost at cut-throat. From all indications the worst is imminent,” Chijioke stressed.
Echoing similar sentiments, analysts at DataPro Limited, Nigeria’s Technology-driven Credit Rating Agency (CRA) affirmed that the fear about the economy slowing down or suffering a lull is real. “This is largely due to the fact that significant economic decisions and spending are taken by the government in Nigeria. While the country can boast of a large number of civil servants for implementing decisions, the political class will rarely be available for making such decisions.”
Besides, the analysts stressed that, “The political will to make sound economic decisions with short-term adverse effects but of long term value will be jettisoned at this time. The political class will be walking on eggshells this period to retain electorate favour or loyalty. Important fiscal decisions around issues such as taxation and subsidy will be difficult at this time.”
Specifically, the analysts also inferred that foreign direct investment (FDI) may be stall at this time. “This is because foreign investors will have to watch the political barometer before investing in the economy. Nobody wants to put money in an uncertain political environment. The FDI already in the economy may also take to flight now to allow the political water to pass under the bridge of time. All these do have consequences for the economy during the election.”
The activities that will mostly be affected are the public works construction sector. This is because mobilisation for ongoing projects may not be processed at this time, the analysts argued.
However, whatever is the lull during the election can be moderated as well by political spending, therefore it is not all bad during election, analysts further hinted.
Additionally, the stock market may also be impacted due to large volumes of capital flight.
To mitigate the crisis, it is the view of experts that the nation’s civil service must be strengthened to provide necessary back up for the political class during elections.
“The requirements for politicians to resign within a considerable length of time should be complemented by requirements for immediate replacement by technocrats. This will ensure that there is no real or imagined vacuum in governance.”
They also stressed that politicians should also conduct themselves properly and abide with all democratic ethos, noting that this will ensure that foreign investors are not scared to the point of leaving during elections.
On quick fixes, analysts said it will include proper conduct of politicians during political activities and conduct of credible elections.
“This will allow the private sector and foreign investors to continue to contribute their quota while politicians are engaging in election matters. The economy needs a peaceful environment to prosper.”
