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Impact of Nigerian General Elections 2019 on the Nigerian Economy

Since the foundation of society and leadership, policies framed by the representatives has affected the lives of inhabitants. The difference that a good and stable government can have on the…

Since the foundation of society and leadership, policies framed by the representatives has affected the lives of inhabitants. The difference that a good and stable government can have on the present and future of a country is undebatable. And one of the decisive event(s) would be the upcoming Nigerian general elections scheduled on February 23, 2019, after getting postponed from February 16, 2019, by the Nigerian electoral body just a few hours before the polling time. This was seen by a majority of Nigerians as a huge blunder of an incumbent government that impacted the country’s international reputation.

What is Going on for the Nigerian Economy?

Nigerian economy has always been under the spotlight because of it being the biggest economy, having the largest population and topmost destination for online remittances among all other sub-Saharan African nations. As compared to the previous year, the latest report by PricewaterhouseCoopers (PwC), named as Nigeria Economic Outlook: Top 10 themes for 2019, states that Nigeria observed an overall remittance inflow of $25 billion in 2018 as compared to $22 billion in the previous year.

Remittances, Agriculture and Oil

The total remittance amount makes a major proportion of Nigerian economy contributing to approximately 6.1% of the GDP, however, with an economy that grew at a steady pace of 1.9% in 2018 as compared to 0.8% in 2017, the country is too far when it comes to the list of fastest growing economies in the world and for such a nation, migrants sending money to Nigeria in 2018 have surpassed the total foreign aid received in 2017 by 7 times.

This is a clear indication of the importance of remittances for developing nations like Nigeria that government needs to encourage more but at the same time, the above statistics also suggest that the agriculture sector (that makes over one-third of the total employment, ranks 6th in the world and 1st in African subcontinent) is facing the problem of overconsumption due to overpopulation and the high-agriculture producing country has been forced to import food to feed its own population.

Adding to the problems of the oil-driven economy is the fluctuation in oil prices in the international market along with a highly anticipated political uncertainty because of the 2019 Nigerian general elections that could affect the investors’ interests.

Slowdown of Investment?

Consequently, this could fuel the already unstable Nigerian macroeconomics. Although Nigeria has been a centre of attraction for global investors because of the potential of its booming consumer base, with the elections around the corner, the uncertainty of drastic policy changes post-elections seems to repel the capitalists from making more investment, thereby making a significant dent on the inflow.

It could further shoot up the Fiscal deficit that has already reached 3% of total Nigerian GDP after a 79% increase from the previous year. With 45% debt service to revenue mark as opposed to the government-estimated 31% and constantly increasing fiscal deficit, it is most likely that the Nigerian government would be turning towards issuing more domestic bonds.

Nigerian General Elections – Not for the Youth?

So, all in all, things don’t look very good for a country that has half of the population under 30 years of age and is suffering from a yearly population growth of 2.6% resulting in an exponentially increasing number of unemployed youth which is at an alarming 23.1% as compared to 18.1% in 2017.

Considering all these numbers, even after the #NotTooYoungToRun campaign, the Nigerian community can be said to be dominated by the older generation as although the youngest candidate in the general elections, Chike Ukaegbu, is running on an education platform, he is 35 years old.

All of the aforementioned points makes it imperative for the Nigerian government to check on a few steps that are bound to have a drastic effect on the overall Nigerian economy if not considered beforehand. It is most likely that election spending along with petrol prices and power tariffs would, at a great extent, cause inflation to worsen for which the Nigerian government does not seem to be very well-prepared. Also, the ones for whom leadership needs to take noteworthy steps are themselves not participating, or are not being made part of the change which is yet another concern as an inability to provide basic amenities like quality education, food, shelter and medicine is inducing the feeling of rebellion among the youth, especially the millennials who show a promising future if things go right.

Rising Insurgency…

Also, election time could also lead to political tension leading to a less-powerful but more actively operating notorious Boko Haram in the North and rebels in the south targeting the heart of Nigeria oil industry – Niger Delta.

The rebels were paid monthly allowances during Buhari’s regime, however, the uncertainty due to elections can flare up the tensions again. Consequently, this would have direct or indirect implication(s) on the economy and well-being of the natives and the state as a whole.

So, it can be concluded that the results and consequences are uncertain but without any doubt, the stakes are extremely high as the upcoming Nigerina general elections will play a decisive role in driving the future of Nigerian economy!

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