Prior to elections
Dear readers, it’s only a few days to the big day! The day Nigerians exercise their right to choose a befitting leader for the country. We can’t completely draw a line between politics and economics because a lot of economic events are affected by politics and political stability. Also, economic events influence the decisions made by politicians. For this very reason we are concerned about the possible impact of the elections on the economy and the economic shifts we are already witnessing prior to the elections.
The main question driving uncertainties is “what policies will the new administration come up with, implement, and enforce?” The uncertainty caused by this question is why many investors pull out of economies during this critical time. The market is considered volatile and many would rather watch from a distance till they are sure which way things are headed.
In the meantime, the country is still battling its currency depreciation, cash shortage, and inflation drama. Under the just concluding political administration, the economy saw its highest average inflation rate of 13.98%. Export earnings have also been languishing compared to several years ago under a different administration. As at December 2021, Nigeria export revenue was at $45.9 billion. The country has had export levels close to $100 billion in previous years (2011, 2012, 2013).
Going forward, two main issues that the incoming administration would have to battle are exchange rate alignment and fuel subsidy removal. It is with great anticipation that we look forward to what policies will be put in place concerning these. Without any doubt, the new administration has a lot of work to do and would need to make strategic decisions to change the current narrative.
So what?
Political stability and government decisions play a role in determining the economic turnout, from fiscal policies made regarding budgeting, expenditures and taxes to monetary policies as well in terms of monetary regulations. This puts significance on how we choose our leaders. Voting should not be influenced by gifts or sentiments but rather, the choice of who to vote into office should be driven by facts, initiative and how solid the candidate’s plans for the nation is.