THE 2015 General Elections might have cost the nation much more than the billions the Federal Government budgeted for the exercise, from the socio-economic perspective.
ENCOMIUM Weekly’s Associate Editor, UCHE OLEHI explains how…
ECONOMY IN GRAVE STATE
Before the election year, the Nigerian economy had a promising outlook. And despite questionable rosy statistics posted by the Economic Management Team, there was no denying the fact that the rebased economy, adjudged the largest in Africa, was on a path of progress. Now, the reverse is the case with key economic indications signaling doom, gloom and despair for Nigerians.
And the 2015 election is to blame for this economic quagmire.
DEVALUATION OF THE NAIRA/INFLATION
We used to dread devaluation until the highly charged political climate coupled with other economic factors forced us to do so, first in December 2014 and weeks back. The implication is inflation, which has made the naira lose enormous value.
FOREIGN EXCHANGE CRISIS
Nigeria is in serious crisis, with the naira crashing to an all-time high exchange rate to the dollar and other foreign currencies. It’s true this is largely blamed on the fall in oil prices, but the abuse of the dollar by the political class, especially government officials, has worsened it.
We are not even sure if the dollar has not replaced the naira as Nigeria’s official currency, with government’s penchant to settle unofficial bills in the US dollar.
It has even been alleged that politicians have unfettered access to hard currencies through their cronies in the banks.
Unfortunately, genuine demand for forex is not even given consideration, which is why importers buy it at unimaginable rate.
As you read this, the official exchange rate of the naira at the interbank window hovers between N199 and N200, depending on the forces of demand and supply.
STOCK MARKET LOSING TRILLIONS!
Before the build up to the 2015 elections, market capitalization had hit N14 trillion! But the bears have taken over the market, losing over N4 trillion.
Hence, the prices of shares that were positive last year have largely dropped to the level they were during the global economic meltdown.
INVESTOR PANIC SPREADS
Investors have been ‘fleeing’ Nigeria as a result of the elections. Their fears are hinged on the fact that the tension-soaked political climate is not favourable to business. Hence, the panic in the polity which is fast spreading to every sector of the wobbling economy.
The aftermath of capital flight is the drop in Foreign Direct Investment (FDI). It is on record that the volume of trade between Nigeria and other countries was so impressive before now that it was widely acknowledged we have become the world’s investment hub. 2015 election has, however, returned Nigeria to the military era which had negative impact on FDIs.
DANGOTE’S LOSS OF OVER $10.3 BILLION!
The slump in the oil prices, the consequent devaluation of the naira and the downturn in the capital market were not palatable news for Africa’s richest man, Alhaji Aliko Dangote. And when all these and Nigeria’s uncertain political climate conspired to reduce his net worth by over $10.3 billion (N2 trillion!) the loss could be unbearable. And that’s exactly what happened to the trillionaire merchant in 2015.
Dangote, according to Forbes was worth $25 billion in 2014, he has since lost a huge chunk of his fortunes.
BANKS BATTLING LIQUIDITY ISSUES
Also a serious challenge these interesting times is the issue of liquidity, that’s how much banks keep in their vaults at any particular time.
Now very low as depositors move funds to sponsor their candidates, some banks reportedly find it difficult to meet the demands of depositors. There are also hardly funds for the real sector.
This is the opportunity cost of the 2015 General Elections.
REAL SECTOR SUFFERS
The real sector of the economy is faced with its worst challenge since the global economic meltdown, this election year.
If you interact with any businessman, you would be told tales of woes and frustrations caused by the election season.
LOW STANDARD OF LIVING
The 2015 elections have equally robbed off on standard of living of Nigerians. All the shocks that are coming with the elections have obviously impacted negatively on the economy which has now reduced the standard of living of the average Nigerian.
When the Manufacturers Association of Nigeria (MAN) threatened to quit business weeks back, they were reacting to high cost of production occasioned by government’s allocation of scare resources to politics.
MAN is actually right, the elections have really challenged productivity across the sectors.
Thousands of Nigerians have lost their jobs with the economic downturn. There are indeed unconfirmed reports of banks, manufacturing companies, telecoms and other sectors disengaging staff they can no longer pay. Economic experts say things could get worse if political crisis erupts.
FEAR OF UNCERTAINTY
The 2015 election has generally created uncertainty in the land. Nobody knows what would happen next as politicians jostle for power. Even with the conduct of the presidential election, the April 11, 2015 governorship election still gives cause to worry. And it is this fear of uncertainty that has enveloped the nation.
GOVERNANCE SHUTS DOWN
The 2015 elections have virtually paralysed governance. Key government activities have practically been suspended as the President has relocated to South-West Nigeria, tagged battleground of the presidential election.
And when President Jonathan is not here, he is in the other states of the federation, canvassing for votes.
Little time is thus reserved for governance. Even government actions and policies are shaped and grossly influenced by political considerations.
It is not only the central executive government that suffers. The National Assembly also hardly sits because of elections. The state governors have also abandoned governance for campaigns, courtesy of 2015 general elections.
POLITICIANS LOSE BILLIONS TO SMART ALECS
Interestingly, it has been a good business season for smart alecs who package phoney projects to fleece desperate politicians. There was no name we didn’t hear before the presidential election.
The purpose of such ideas was simply to make money off unsuspecting politicians. And it really worked out for them as they made millions of naira.
NATIONAL REPUTATION/IMAGE DEFICIT
All for politics, supporters of presidential candidates engaged in dirty campaigns that did not only damage the reputation of their opponents but the image of the country. From cheap blackmail to out-right falsehood, desperate power mongers sponsored malicious documentaries and engaged in ignoble propaganda to get at their political rivals. And like one social commentator observed, the world now knows us better through our own impression of us. This has further tarnished Nigeria’s image in the eyes of the comity of nations.
MULTIPLE SECURITY CHALLENGES
The real cost of the 2015 General Elections also borders on security. There have been reports of violence across the nation, which have resulted in loss of lives and property. In fact, not a few souls perished in pre-election violence, even as the situation got worse during the polls in some parts of the federation.
Despite the presence of security personnel across the country, there are fears that some flashpoints might boil if the outcome of the elections didn’t favour them.
Similarly, armed robbers and ethnic militia men have also capitalized on the elections to unleash terror on the populace.
NIGERIA’S NASCENT DEMOCRACY THREATENED
As earlier predicted by the Western intelligentsia, 2015 would be a challenging year for Nigeria. A tink-tank in America even went on to predict that Nigeria might split this year. This actually gave cause for worry especially when the 2015 elections show disturbing signals gravitating towards this tragic end. The implication on our nascent democracy is better left to imagination.