In the build-up to the general elections, political parties had created so much tension that even the ordinary Nigerian was apprehensive about what could happen before, during and after the polls. The reasons for the general apprehension were the hate campaigns and killings of supporters of one political party or the other.
During the electioneering campaign, and especially the six weeks preceding the elections, domestic investments in the Nigerian Stock Exchange (NSE) recorded a substantial decline, owing to fears about insecurity and uncertainties regarding the elections. For instance, the latest investment details from the NSE showed that local investments dropped by N40.1bn at the end of February 2015, although as of January 2015, the total investments by domestic investors stood at N90.61bn while a document obtained from the NSE indicated that this later dropped by 44 percent to N50.24bn by the end of February.
On the other hand, foreign investments rose in this period; as a total of N133.95bn or 35 percent was attributed to foreign investors, representing an increase of N34.8bn compared to N99.11bn invested at the end of February. In summary, the NSE document reported: “Domestic investors conceded about 45.22 percent of trading to foreign investors as domestic transactions decreased from 47.76 percent to 27.39 percent, while FBI transaction increased from 52.24 percent to 72.61 percent over the same period”.
Some capital market experts have attributed the consistent reduction in local investments partly to “fears of the general election, the increasing security concerns and the tight monetary policies of the Central Bank of Nigeria”. In addition, Mr. Johnson Chukwu, the Managing Director and Chief Executive Officer of Cowry Asset Management Ltd, gave some factors leading to the decline in local investments as external and internal, pointing out that the trend is likely to continue until the second quarter of 2015. According to him, “the factors driving the bear run seem to be declining oil prices; depleting reserves; termination of quantitative easing; likely further tightening of monetary liquidity by the Central Bank and a possible two-horse unpredictable presidential election in February 2015”.
We wonder why elections should have this much adverse effect on investment, foreign or domestic. Much as we agree that certain events could make calculations to change in countries at given periods, election, particularly electoral violence, should not be one of them. Elections should be a routine event without the restriction of movement that has a bad effect on the economy, as it prevents traders and even financial institutions from carrying out their businesses. The militarisation of the society at election periods also contributes to loss of transactions from legitimate businesses on election days.
Then, the kind of hate campaigns experienced at this year’s elections are more than enough to have negative impact on the society. It is obvious, therefore, that under the climate of uncertainties that exist during elections in Nigeria, no investor would like to invest where he cannot guarantee profitable returns on his investment as a result of insecurity or policy inconsistencies of the government. It is, therefore, extremely important that our politicians are made to realise the implications of their behaviours and utterances at electioneering campaigns so that badly needed investors are not discouraged from coming to invest in the country. The political leadership should not allow their supporters to turn election into a theatre of war or a do-or-die affair.
Although attempts have been made to curtail violence at elections by making the political parties sign peace accords, the accords have not worked because violent acts at elections have become a tradition in the country. We must put a stop to this if we want investors to come to the country. And one way to achieve this aim is to punish people who perpetrate electoral violence.
