Kelechi and Ifeoma had fixed their wedding for Saturday, February 23, 2019, six months ago. They had toiled all through last year to raise the wedding expenses. A hall has been paid for, and wedding invites printed. The intending couple has however been at their wit’s end, since today’s announcement by INEC of a shift in the 2019 elections.
Where will they get the funds to print another wedding invite? The event planner has spent, most of the advance received and is unwilling to give a refund. The owner of the event centre, is also unwilling to refund the wedding planner. The hall was booked in August last year, and he has spent part of the funds. He has events scheduled back to back in March.
For Kelechi, the costs are heavier. His parents and siblings had been in his home for the past week, preparing for the wedding. INEC’s announcement means he will either have to pay for their transport back home or foot their upkeep for a few more weeks.
Mama Bisi has spent over N100,000 preparing food. She had made take away packs to sell to voters in a polling unit close to her house. The move in election dates, means there is no one to buy. If it were a weekday, she would have been able to minimize her losses. She is forced to give most of the food away.
As Nigerians like Ifeoma, Kelechi and Mama Bisi continue to react to INEC’s rescheduling of the 2019 elections, Analysts at Nairametrics have weighed the cost and benefits implications of the postponement on the Nigerian economy.
Against the backdrop of the general election, most private organizations gave considerations to staffs to work a half day, some states owned organizations were given a complete day off and public schools were closed.
These measures were to enable to Nigerians prepare for one of the most highly anticipated general elections in the nation’s history. An estimate of the losses was calculated using GDP figures. In addition, sectors that would be losers from the action were highlighted, as well as the few gainers.
The National Bureau of Statistics recently released the gross domestic product (GDP) for 2018, and the report showed that the Nigerian economy in real term grew at 1.93 percent growth rate. During the last quarter of 2018, aggregate nominal GDP (economic output without the inflation adjustment) stood at ₦35.23 trillion, which is higher than ₦31.28 trillion recorded in Q4 2017, representing a nominal growth rate of 12.65%.
For 2018, the annual nominal GDP was therefore recorded at ₦127.762 trillion representing a nominal growth rate of 12.36% when compared to ₦113.711 trillion recorded in 2017.
Invariably, for the annual nominal GDP, ₦127.762 trillion amounts to ₦10.6 trillion per month, ₦2.66 trillion weekly and ₦380 billion per day. Similarly, the Q4 of 2018 GDP figures released by the Bureau was estimated at ₦35 trillion. That comes to about ₦11.6 trillion per month, ₦2.9 trillion per week and ₦414 billion per day.
Hence, since many organizations had a half day on Friday preceding the postponed Presidential and National Assembly, the losses could amount to over ₦500 billion.
The informal sector would be the biggest loser due to the postponement. A large number of Nigerians earn income on a daily basis. Most businesses would have canceled orders required for their businesses due to the general election. Unfortunately, the election has been postponed, Nigerians in this category would be counting their loss.
The imposing of a curfew on movement would have led to many individuals having to shift their trips or out-rightly cancel, the day before. Today’s postponement thus serves as a double whammy to their operations, as they would lose a huge chunk of revenue today.
Despite the announcement of the postponement in the early hours, many individuals would opt to stay home as they monitor the security situation.
Postponement would lead to the shifting of events scheduled for the new dates. This is in addition to losses incurred today. Some would have shifted events ahead to the new scheduled date of the general elections, and by extension, plans will be truncated and this will cost many some fortunes. Also, events that had been scheduled for the coming weeks may also be postponed or cancelled, as individuals may decide to monitor the current situation.
Service providers to INEC
While most Nigerians are understandably upset by the postponement, some service providers to the Independent National Electoral Commission (INEC) may smile to the bank. The commission would have no choice but to mobilize them for their services next week and next month.
While many hotels would record losses from the postponement, key hotels located in Abuja, the seat of power may maintain increased patronage. The postponement will lead to realignment in the country’s political space.
Effects on the financial markets
The postponement by INEC could have negative effects on the financial market. The equities market which has rallied in the last 11 days could take a dip. Foreign investors that are a key driver of the market, may decide to slow down on their investments as they watch things unfold. For the bond segment, the move could also lead to a drop in bond yields, as foreign investors may exit In the light of heightened political uncertainty.
Despite these attendant costs, a succesful free and fair election is still expected next week or whenver the election does take place. The cost of not having this election far outweighs the cost of postponement.