Divisive elections give investment-starved Nigeria new headache

The fallout from the general election, including the controversy over the presidential poll results, has created a new headache for Nigeria at a time when foreign investment confidence is at a low ebb.

From Lagos, Nigeria’s commercial capital to Rivers State, the heartbeat of the country’s oil industry, what was supposed to be a simple exercise to elect the next political leaders turned chaotic midway as violence and voter suppression fuelled divisions across Africa’s most populous nation.

The development has increased uncertainties for Nigeria’s investment outlook, according to economists and investment experts who fear the political instability and election violence would slow the pace of new investments at a period when the country is in dire need of foreign capital.

“The elections in Nigeria, particularly that of the country’s commercial capital of Lagos, shows that minority groups can be convenient targets for angry locals at any time,” a foreign investor who did not want to be identified said.

“That must leave a bitter taste in the mouth of any investor who is seeking the assurance of security of his/her life and investment in a foreign country,” he added.

Read also: 78 million children in Nigeria at high risk of water-related diseases, others — UNICEF

Bola Tinubu, who secured 37 percent of the votes during the presidential election, will be sworn in on May 29, but Atiku Abubakar of the People’s Democratic Party, who came second with 6.9 million votes, said the election “was grossly flawed in every material particular and such must be challenged by all of us.”

Peter Obi, the presidential candidate most popular among young and educated urban voters, called Tinubu’s victory fraudulent and promised to claim the top job through legal means.

“Let me assure all Nigerians that we will explore all legal and peaceful options to reclaim our mandate,” Obi told a news conference in Abuja, the country’s capital.

Several observer missions criticised the election process after results were announced, saying a new portal introduced for transparency and efficiency had done little to improve the process.

“INEC lacked efficient planning and transparency during critical stages of the electoral process,” said Barry Andrews, head of the European Union’s observer team.

“No investor, who witnessed the electoral violence will look in the directions of projects that are customer-focused, like the retail outlets because you can see how vulnerable such investments are to any social unrest,” Michael Peter, an investment analyst with Sofidam Capital, said.

Peter said those thinking of investing in Nigeria would begin to think twice now because of the high level of violence witnessed in cities like Lagos.

“It does not give a sense of security even to the investors because if the looting can happen so freely, then the society is not secured as well as your investments,” he said.

Ademola Okikiola, an investment analyst with Cavazanni Human Capital Limited, said the impact of insecurities was already being felt in the economy as investor confidence has been dampened further from its low point occasioned by the economic effect the Russia-Ukraine war.

Data from the National Bureau of Statistics showed foreign direct investment inflows in Nigeria stood at $3.3 billion in 2021, a 166 percent decline from $8.8 billion achieved in 2011.

Experts say the many challenges with doing business in Nigeria are spooking foreign investors and scaring them away from Africa’s biggest economy.

That has coincided with the race by other African countries to attract investment. These smaller countries relative to Nigeria are offering investors more than Nigeria is willing to and are therefore stealing a march on the “giant of Africa”.

“Insecurities and violence are big threats to investment anywhere in the world,” Okikiola said.

Okikiola raised concern on why traditional oil and gas firms, from ExxonMobil to Shell, that have flocked into Nigeria for its oil are gradually pulling back on account of the various challenges in the country, coupled with the allure of other markets with better fiscal terms than Nigeria.

“There’s compelling evidence that a Nigeria is no longer as vital to doing business in Africa and investors are taking note,” Okikiola said.

From Lagos to Ondo, Edo, Delta, Kaduna, Kano, Enugu, Rivers and Cross River, many parts of the country saw violent disruption of voting, as various arms of security agencies were put to task in maintaining sanity, while the electorate rose to the occasion in some instances to protect votes.

The situation resulted in the low turnout of voters recorded in many voting centres in the country.

The Center for Democracy and Development, in its preliminary statement on the elections, raised doubts over its credibility across the states following the alleged public sale of votes, violence and intimidation.

The organisation said that although the Independent National Electoral Commission fared better in the aspect of logistics deployment, leading to prompt arrival of poll officials for the elections, there were occasional issues of non-functionality of the Bimodal Voters Accreditation System.

OrderPaper, Nigeria’s premier and pre-eminent policy think-tank/legislative interface, also decried voters’ apathy and alleged vote buying in parts of the country.

A preliminary report by Temidayo Taiwo-Sidiq, communications lead, Voter Project, OrderPaper Advocacy Initiative, indicated that there were large reports of low voter turnout resulting from intimidation by thugs, political party agents and apathy linked to perceived mismatch of voting and results announced in the presidential and National Assembly elections.

The report said Enugu, Niger, Plateau, Ekiti, Osun, Bayelsa, Kaduna, Nassarawa, Adamawa, Taraba and Jigawa states recorded the lowest voter turnout, going by feedback received so far.

The Campaign for Equal Voting Access for Persons with Disabilities (EVAPWD), on its part, decried the level of security provided by the security agencies and poor deployment of assistive devices such as Braille guides, shade and magnifying glasses to various polling units.

EVAPWD, in its preliminary statement by David Anyaele, its chairman, said there were no security operatives available in some polling units.

Likewise, the Nigerian Civil Society Situation Room raised concern over the destruction of election materials and the disruption of materials distribution in last Saturday’s election.

“For Nigeria to attract foreign direct investments, it must create the right environment and appropriate fiscal incentives to out-compete currently preferred destinations of foreign capital like China, India and Vietnam,” Johnson Chukwu, the group managing director, Cowry Asset Management Limited, said.