Nigerians go to the polls on the 16th of February 2019 in what most analysts view as the most contested election in the history of Nigeria. Unlike prior elections, the 2019 presidential election is a verdict on the Buhari’s administrations handling of the economy.
It also offers the opposition an opportunity to make a case that if handed back the reins of power, it could make the economy “grow again”. Fortunately for supporters, critics, and neutrals, the National Bureau of Statistics released a slew of data that once again places the economy in the spotlight. In an ideal world, these data may have helped decide who should be ahead at the polls and perhaps win the election.
Macroeconomic data that should have mattered.
Recent data from the National Bureau of Statistics reveal Nigeria’s GDP grew fastest in 4 years with 2.38% growth rate in the last quarter of 2018 (Q4). This is the fastest quarterly growth rate since President Buhari came into power in May 2015.
Though not fast enough, a 2.83% GDP growth rate suggest the economy is a brisk path to recovery and if sustained could return Nigeria to one of the fastest growing emerging market economies.
The Bureau also released Nigeria’s capital importation data showing total capital inflows into Nigeria in 2018 was $16.8 billion compared to $12.2 billion in 2017. Out of the $16.8 billion in inflows, $8 billion alone went to government bonds.
Last week, the CBN also released its Purchaser’s Manager Index, showing that Nigeria’s Manufacturing PMI for January 2019 was 59.3 points, growing for the twenty-third consecutive month. The PMI is a survey that gauges the perception of the Nigerian economy from the point of view of purchasing managers of companies.
A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally contracting.
Last January, the unemployment data released by the NBS revealed Nigeria’s unemployment rate was about 23.1% with over 39 million Nigerians, mostly the youth population, out of jobs. The report was dire and exposed how much damage a slow economic growth could impact on job creation.
Nigeria’s inflation rate has fallen since 2016 dropping for 18 consecutive months till it snapped in August 2018. At about 11.44% Nigeria’s inflation rate is still far from the single digit expected to help spur economic growth.
What these indices mean for 2019 election
For most of the voters in Saturday’s poll these numbers mean little or nothing, however for analysts on both side, there is a lot in here to chew on.
- Buhari supporters believe the GDP growth rate is as a result of its economic policies
- Supporters of Atiku, the main opposition candidate, believe the economic policies are the reason for the slow economic growth.
- Buhari supporters also point to the stable exchange rate as a reason for the growth in capital importation, the highest since 2014.
- Critics of the government chide the controversial handling of the exchange rate for driving away foreign investors in the first place and insist capital importation is still far from the $20 billion recorded in 2014 (during President Jonathan’s presidency).
We do not believe these indices will play heavy in the mind of voters, but undecided voters may have one look at these numbers and decide whether to settle for continuity or a change to how the economy is being handled.
One interesting thing about this election is that supporters of Buhari are hardcore leftist, who believe in using state powers to direct economic activities in the economy. They also believe strongly that fighting corruption, enforcing harsh regulations and banning imports are the sure way of bringing Nigeria to self-sustainability.
For Atiku and his supporters, they are united by Atiku strategy of going against every single thing Buhari stands for and the latter’s hatred for Buhari and his handling of the economy.
A Buhari Win will suggest his supporters are happy with the fight against corruption and perhaps a referendum against the rich. It could also send a dire message to foreign investors that Nigerian voters are not utterly concerned about the slow pace of economic recovery and willing to wait things out for as long as it takes (4 more years).
An Atiku win, on the other hand, will be a major boost for most businesses who have secretly supported his campaign. The message will simply be that the electorate is concerned about the handling of the economy and open to policies that favour free trade and create rapid economic growth even if it comes with increased corruption as a cost.