2023 elections as threat to investments flow

Complaints of divisiveness and imperfections that trailed the 2023 general elections are bound to have consequences on the flow of investments in the country. The lack of general consensus on the fairness and credibility of the elections is capable of casting doubt on the country’s preparedness to benefit from foreign investment inflows relative to other countries in the developing world.

While the elections are being contested in some respects, tension has been unduly heightened by sharp reactions from desperate stakeholders in a way that not only tend to subvert official channels meant to dissipate grievances, but also to raise the risk on investment flows into the country and cast uncertainty on the probability of global investment decisions in favour of Nigeria. In particular, watchers of the economy fear that the current posture of some aggrieved politicians may have some negative effects on the inflow of investments into an already investment-starved Nigerian economy. Obviously, this may increase Nigeria’s country risk index.

The incoming governments at both the federal and state levels have a major task to address grievances that may linger even after resolving the present political impasse; they need to restore stability and work towards improving the electoral process that gave vent to the divisions in the first place.

In particular, those clamouring for unconstitutional means of redressing grievances that can otherwise be resolved through laid down channels of election tribunals are advised to temper their complaints within acceptable limits, as their attitude can unduly heat the polity as well as the economy. If that happens, Nigerians generally will be the losers. Seeking redress outside of constitutional and legal provisions portend nothing but mischief.

The challenges in the conduct of elections in Nigeria have been largely driven by a do-or-die philosophy that power has to be grabbed at all cost. This mentality often occasion violence, voter intimidation, voter suppression, ethnic and religious profiling, and even a campaign of post election violence that are incompatible with democratic norm. Indeed, some political elements, rather than concede victory or challenge election results in the law courts as provided by extant electoral laws, have been suggesting the setting up of an interim government, much against the spirit of the 1999 Constitution. Much of these have manifested in the 2023 elections.

Adding to the tension is the failure of technology deployed for the elections. All these have serious implications for investment decisions within the country as well as between the country and potential foreign investors.

The risks therefore posed on investment flows are real even though chances of reset of domestic investment flows are low, given that the electoral processes are still unfolding, and many Nigerians have confidence in the ability of the judiciary to correct the wrongs. For instance, Lagos, being the commercial capital of the country has been the melting pot for various ethnicities in the country right from when it was the country’s political capital such that virtually every ethnic group in the country found it to be a safe place to pursue economic opportunities.

This is more so given the position of Lagos as the gateway to the Nigerian economy with the seaports, foreign embassies and consulates, major international airport and the headquarters of the banking and finance as well as the oil and gas sector companies.

Naturally, most Nigerians gravitate to Lagos for economic opportunities. This trend is unlikely to change drastically despite the pockets of election violence and some ethnic profiling that took place in Lagos during the elections. Nevertheless, there is an opportunity to explore the possibility of adopting a balanced development strategy where decentralisation would be a major plank in the framing of future economic development policies.

On the other hand, the inflow of Foreign Direct Investments (FDI) that appears threatened following divisions in the polity stand a good chance of bouncing back, subject to the peaceful outcome of the election processes, and goodwill expected of the coming administration. FDI flows have been on downward turn in the past decade with over 150 per cent decline since 2011 when it was $8.8 billion to about $3.3 billion recorded in 2021.

Largely, insecurities and violence are a big threat to investments anywhere in the world and even big players in the economy such as ExxonMobil and Shell Petroleum Development Company have over the years been downsizing their operations in the country due to challenges experienced in the country and the allure of other markets within Africa and globally. If not properly managed, the current crisis may worsen the Nigerian economic landscape. Many other African countries have become investment destinations over the years to the detriment of Nigeria.

Political leaders should know that the concept of viewing power as a matter of life and death is counterproductive and grossly damaging to the Nigerian economy. Elections should not be characterised by violence, voter intimidation or used as opportunity to play the ethnic or religious cards. Moreover, Nigerians should also imbibe the fact that politics is a game of win or lose; and that whatever divides politicians find themselves is not the end of the world.

Political actors in the climes that Nigeria draws political inspiration from do not usually display the level of desperation seen in many Nigerian politicians who therefore need to inculcate the right philosophy rather than seek to grab power by unorthodox means or seek to pull down the whole country if they do not win.

Some political leaders selfishly whip up religious or ethnic sentiments with least regard for the consequences. Collateral damage to society in such situations is immeasurable. Efforts should be made to build a nation that would work for all irrespective of anyone’s ethnic origin or religious affiliation. Second, institutions of the state such as the electoral commission and the security agencies need to be re-engineered for efficiency and to plug identified loopholes.

Elections should not be turned to open warfare. It should be made to be what it is, an opportunity for citizens to make their choices on who governs them. If these issues are not addressed and quickly too, the Nigerian economy will continue on its current downward trend which would definitely not augur well for the political leaders, the citizens and the country at large.