N542bn setback for business, economy as INEC shift polls, says LCCI

Spread the love

The nation may have suffered a monumental economic loss of about $1.5 billion (N542 billion) as a result of the rescheduling of the presidential and national assembly elections earlier scheduled for Saturday, February 16 to February 23, 2019, according to Muda Yusuf, director general of the Lagos Chamber of Commerce and Industry (LCCI).

The postponement of the elections within hours to their commencement drew anger and disappointment from Nigerians over the weekend, including the two leading presidential candidates, president Mohammadu Buhari of the ruling All Progressives Congress (APC) and his challenger, Atiku Abubakar,  of the Peoples Democratic Party (PDP).

The losses  accrued from the man hours lost by various corporations, small scale businesses, market women and men, artisans, traders, hotels, banks, and many other enterprises who operated for a little over half a day on Friday as they hurriedly closed shop to  arrive home before night fall.

Given the wee hour announcement of the postponement of the polls not many businesses were able to recover enough time reopen on Saturday therefore losing more money in the process. In the early Saturday business hours after the news of the polls shift had broken, most businesses and markets still remained shut as the operators were too shocked and undecided about what to do, further increasing the economic losses due to lost sales and revenue receipts.

Some states had declared work-free day on Saturday with possible economic losses. All the corporations and banks that observed half-day work lost billions in the process. In the same vein, both the federal, state and local governments had deployed human and material resources and logistics to prosecute the elections, involving billions of naira.

Another industry that was hugely affected by the polls shift is the media which had sent reporters to all the nooks and crannies of the country at a great cost.

Yusuf said that the nation was completely shut down on Saturday, and partially on Friday due to the half work day observed by most companies, saying the toll on the economy was huge.

“Remember that the ports were closed down as well as other institutions. Everybody was affected – investors, government and individuals. So the nation lost a lot,” he said.

The LCCI DG also said that the election cost would go up and cost already incurred in form of logistic cost would be repeated when the rescheduled elections take place.

“Expenses had already been incurred. Ad-hoc workers had been mobilized, security agents also mobilized, vehicles hired and voting materials moved. INEC would still need to repeat these costs,” he said.

However, he said this may not affect foreign investment in the country especially if INEC conducts free, fair and credible elections, noting that investments would not stop if the country is peaceful.

Part of the losses will also come from the N54 billion that the National Assembly approved as allowances for security operatives that would keep law and order during the elections. Investigations revealed that the money had been disbursed, with each policeman or woman receiving N80,000. This may now have to be repeated.

In addition, thousands of people have, at great personal costs, travelled locally and internationally to ensure they carry out their civic obligation.

Transactions, both local and international, were deliberately scheduled, arranged or structured to accommodate the dates earmarked for these elections.

But Sherriffdeen Tella, a professor of economics at Olabisi Onabanjo University, Ago-Iwoye, Ogun State, said the development would create unnecessary uncertainty in the economy and affect inflow of foreign investment.

Tella said the country’s inability to stabilise election processes 20 years on would affect the way foreign investors perceive Nigeria.

He said the development would affect inflow of foreign investments, both portfolio and direct investments.

“Uncertainty is the operating atmosphere in Nigeria, but businesses thrive under certainty and predictable situations,” Tella said.

He said the postponement would bring about extra cost for businesses and Nigerians, adding that business successes depended not only on macroeconomic stability but also on political stability.

“Businesses that have shifted some programmes because of the elections have to start making adjustments whose outcomes may not be optimal.

“When INEC released its plan long ago, I thought we had arrived; but this last-minute botch shows that we still have a long way to go,” he said.

Ambrose Omordion, chief operating officer, InvestData Ltd., said the postponement of the elections showed that government and INEC were not prepared.

Omordion said the postponement a few minutes to the election hour would further slow down economic activities and as well as cause cautious trading in the nation’s stock market.

He said investors’ confidence as seen in the recent stock market rebound would be dampened with the development.

Omordion wondered why INEC fed Nigerians with lies that they were prepared for the elections only to announce a shift when it mattered most.

Garba Kurfi, managing director, APT Securities and Funds Ltd., said the postponement of the elections would be a huge cost to the economy in view of the fact that schools had been closed for almost three days ahead of the elections.

Kurfi said many companies and markets had been closed due to the elections while many individuals had travelled to various destinations in order to cast their votes only for it to be postponed.