The anxiety surrounding the outcome of Saturday’s presidential election in Nigeria has dampened business activities, especially in the informal sector.
Experts say this presents dire consequences for Africa’s biggest economy as businesses are already stretched financially as a result of the scarcity of naira notes and petrol.
“Everybody is apprehensive and panicking and because of that, businesses are either on a standstill or are at a very dull end at this time. And the inherent problems before the elections are still there,” Femi Egbesola, national president at Association of Small Business Owners of Nigeria, said.
He said with the country’s high inflation rate, his association is hopeful that the government will quickly do the needful to address the situation “because an hungry man is an angry man”.
“Most of the agitations that may come up may necessarily not only be from the elections but also because people are frustrated and depressed,” he added.
Abdulrasid Yarima, president and chairman of the governing council of the Nigerian Association of Small and Medium Enterprises, said businesses were already in recession, which has further worsened their situation in the country.
“For now, nobody wants to go out and do business because of violence and insecurity. And the petrol and naira scarcity is still in some parts of the country. I just hope that immediately after they release the results, there will be peace and people can go back to their normal lives and businesses,” he said.
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On Saturday, Nigerians went to the polls to elect a new president and members of the National Assembly. Since 1999, this ritual of electing presidents and national legislators has occurred every four years.
But tensions have been high across the country as people await results of the presidential and the National Assembly elections.
As a result of this, some markets and shops across Lagos like Auto Spare Part and Machinery Dealers Association Trade Fair-Lagos State, Alaba International Market and Ladipo Auto Spare Parts Market have closed while other food markets at Mile 12 are seeing low activities.
“We are already getting reports of incidents of violence against businesses and some shops in some parts of Lagos,” Ikemesit Effiong, head of research at SBM Intelligence, said.
He said incidents of violence have a multiplier effect on businesses. “If people don’t feel safe, they will not open up shops which will lead to scarcity of important items there increasing prices.”
Effiong added that the economic prospects of Nigeria heading into this post-elections period were not looking good.
BusinessDay had reported two weeks ago that the scarcity of new naira notes and petrol in Africa’s most populous nation was crippling the sales of many businesses.
Most of the businesses affected were in the trade and agriculture sectors, which contribute significantly to the country’s Gross Domestic Product.
Apart from poor sales, the scarcity also increased the cost of living of cash-strapped Nigerians last month after the inflation rate slowed down in December for the first time in 11 months.
According to the National Bureau of statistics, the country’s inflation rate rose by 0.47 percent points to 21.82 percent in January from 21.34 percent in December.
“The presidential elections have raised the level of anxiety and the risk of post-election violence, which can be terrible for any economy. It is something that happens in many parts of Africa and if it is not properly managed, it can be a much bigger problem for the Nigerian economy,” Muda Yusuf, chief executive officer of Centre for the Promotion of Private Enterprise, said.
According to him, if people are afraid to go out to start their various businesses or there is a confidence problem around the elections, the impact on businesses and investments is always extremely very negative.
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