Foreign investors, business owners jittery over uncertainty of 2023 elections

By Joy Obakeye and Chukwuemeke Iwelunmo

It is barely four months to the 2023 general election, which is coming at a time when economists, analysts, and groups have lamented the impact of the bleeding economy on the country’s growth, even as foreign investors are jittery in investing in the country as a result of the uncertainty.

The Nigerian economy is witnessing multiple challenges from inflation, insecurity, lower revenue from oil due to incessant theft, industrial actions, and the like. The most recent is the impact of global headwinds, including the appreciation of the dollar against currencies.

Nigeria is facing both internal and external challenges and analysts say they are coming at a time when the build-up to the 2023 elections will add to the woes already facing the economy.

Recent data by the National Bureau of Statistics (NBS) put Nigeria’s inflation rate at 20.8 per cent, the highest in 17 years. The surge has been attributed to the challenges earlier mentioned.

However, it seems the worst is not over as the general election is fast approaching, at a time when food and commodity prices naturally peak due to yuletide.

One key area that seems to be in the mix is the manufacturing sector. Past elections have shown that during the buildup to an election, the attention tilts to campaigning, thereby seeing government involvement in the running of the country reduce; worse so if it’s an incumbent running for an election.

According to the Director General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, ‘implementation of business-related policies may slow down; rate of public sector response to economic issues may dwindle; the operating environment may experience a higher level of uncertainty and business operators will be extra cautious in expanding operations and investments.

Despite these, there comes a twist where some businesses and manufacturers benefit from the election period.

The CEO of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, believes that during this period, there is a lot of election spending; “the printing of ballot papers, boxes, and logistics; the government cannot do these things alone and that’s where the private sector comes in.

“Expenditure for media is also factored in because these politicians spend a lot of money on media and publicity; live coverage, advert on televisions and in the newspaper. Media houses that are well-positioned now are smiling because of the adverts they get from these politicians.

“There are elements in a society whose business is to organize logistics for political parties, for instance, organizing rallies. Not all of the crowd are supporters of the party,” he added.

In similar views, Ajayi-Kadir believes, now is the season for businesses who are in this line, also as the yuletide approaches.

“Businesses offering goods and services required during the electioneering campaigns and Yuletide will experience some boom. So, local manufacturers of products used for campaigns and other electioneering activities should witness higher volumes of orders and sales. The SMIs should be major beneficiaries on this score.”

With the election drawing close, some level of risk is associated with the season, which also tends to slow economic activities down.

Dr Yusuf posited that “when we are in this election season, all efforts and sometimes resources are diverted to how they can win elections. So things that concern businesses are not given the right attention.

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“Election creates uncertainty in the business environment. When in a transition period, no one is sure how things will go because sometimes, a change in government from one party to the other, or even within the same party, will lead to a change in so many things, DailyTimesNGR gathered.

“Another is the political risk of investors getting involved in government activities. There’s every possibility that the policies of the government will change,” he stressed.

Analysts have commended Nigeria’s democracy and the ability to successfully transmit power from one civilian government to another and from one political party to another over the years.

Businesses are hopeful that the forthcoming elections will not be different and that politicians and their supporters would refrain from untoward activities that may endanger the peace and constrain economic activities.

“The general expectation of the private sector is that Governments at all levels would deliberately put in place arrangements that will ensure that public sector operations remain unfettered during the electioneering period. That is to say, the economy should not be sacrificed on the altar of politics, MAN DG stressed.

With the 2023 elections coming with so much uncertainty, with 4 major front runners, there’s little yet to be said about their economic blueprint.