How Much Elections Cost To Nigeria.

2015 General Elections have passed, however they might have cost the nation much more than the billions the Federal Government spent on them…

The magazine Encomium explains how elections will influence Nigeria:

1. Devaluation of the naira and inflation

The source says: “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.”

2. Foreign exchange crisis

The naira crashing to an all-time high exchange rate to the dollar and other foreign currencies.  And 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,” the magazine states.

 3. Stick 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.

 4. Investor panic spreads

It also noted that 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.

5 . Foreign Direct Investment drops

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 Nigeria have become the world’s investment hub.  However, according to the Encomium, 2015 election has, returned Nigeria to the military era which had negative impact on FDIs.

6. Banks battling liquidity Issues

The Encomium says: “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.”

7. Real sector suffers

The source is sure that the real sector of the economy is faced with its worst challenge since the global economic meltdown, this election year.

8. 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.