What the Economy Lost to Elections
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An empty Lagos road: Period of election is bad time for businesses Photo by Paul Kuyoro
Nigerians recount the losses caused by restriction of movement and closure of borders during the recently concluded elections

The 2011 elections have come and gone, with winners popping champagne and the losers still smarting from defeat. Undoubtedly, however, the elections have left a sour taste in the mouths of Nigerians who are still counting losses suffered as a result of curfew imposed from 10 pm on the eve of election to 6 am on election days and restriction of movement on election day as well as closure of the country’s borders.

For instance, Musa Ibrahim, a taxi driver in Ilorin, Kwara State, did not see any sense in not allowing people to move around during the elections. “My business was adversely affected because I live on daily earnings from this work. On the average, I lost about N3,000 on each day of the election and this is quite painful. That was why immediately the voting ended, I rushed out to see what I could still make to sustain my family. We have voted in times past and nobody imprisoned us,” a frustrated Ibrahim said. To make up for the lost time, Ibrahim and other transporters hike fares when they commence business after election hours.

Apart from artisans and petty traders, operators of eateries in Ilorin were also greatly affected by the restriction of movement on election days. Mr Biggs’, Chicken Republic and Royals all recorded losses. A staff of one of the eateries, who pleaded anonymity, told the magazine that his company lost over N100, 000 each election day due to the restriction of movement, which forced the eatery to shut its doors to customers. Though the eateries and other businesses eventually opened after voting hours, hardly did they realise as much sales as they would have had if there were no restriction.

To Tawakalitu Usman, a petty trader dealing in Fura, a local milk drink, the election days proved to be bad days for her business. “I lost well over N7,000 daily on these days, and that is a lot of money. To minimise my losses, I opened my shop immediately the voting ended.” She counselled, “Voting or elections should not be planned to affect businesses.”

By late last week, Tolani Iredele, a trader in Akute Market, Ogun State, who deals in provisions, was yet to recover from the losses she suffered during the elections. As far as she is concerned, nothing compares with daily earnings, which she was deprived of for four election days. Abimbola Oyegbenro, managing director of PIC Computers, Computer Village, Ikeja, Lagos, thanked God the elections came to an end last week because it almost crippled his business. “The election slashed my total income, I make an average of N50,000 daily from sales of computer and accessories. But in the last three weeks I have lost about N150,000 from my sales for the three Saturdays and Tuesday the federal government declared curfew and restricted movement.” What was particularly painful to him was a big business deal that coincided with the election. He said, “I imported some computer components and accessories from China and my client from Katsina who is supposed to come and pick them up has not come because he can only travel on Saturday but the restriction of movement and post-election violence have wrecked everything. And these are goods worth hundreds of thousands of naira,” said Oyegbenro.

The client too will have some story to tell, like other businessmen in cities across the country. Oyegbenro is even lucky that he had cleared his consignment ahead of the elections. This is because the closure is not limited to restriction of movement within the country; the federal government also closed the borders at every election. The ministry of interior says that the closure and the restriction order form part of designs to ensure a hitch-free exercise. What that means is that while the exercise is going on there will not be any form of business transaction in the country, even as business across the border will be frozen.

No company in the semi-formal sector depicts the despondency of the election days like Kamasco Nigeria Limited, a big consumer and general electronics store based on Ahmadu Bello Way, Kaduna. According to Joseph Panaki, the sales representative of the company, the election and the violence that followed it cost his shop over N10 million as it was forced to close down both on the election days and the violence it generated. Adejohnson Ventures, an electronic store located on Ahmadu Bello Way, had its share of misery during the elections. According to Semi Azeez, its accountant, the store lost about N500, 000 each day it closed during the elections. He added that the store was closed for more than seven days due to both the election and the violence that ensued. “The election has cost us a lot. Election should not make people to lose their businesses,” said Azeez. In states like Kaduna and Bauchi where riots broke out after the presidential election, there was an added trouble. The curfew imposed to curtail the riots added further damage. According to Azeez, “The effect of the curfew has also been devastating on our businesses.”

Sales also nosedived for Destiny Bookshop along Ahmadu Bello Way, Kaduna. “The election crisis has also affected us because we could not open. Then came the curfew, which has incapacitated our business. Everything has cost us about N10 million because I have two other bookshops in Kaduna,” said Celestine Destiny, owner of the bookshop. In fact, Ahmadu Bello Way alone has over 70 stores, which specialise in goods ranging from electronics, furniture to home and offices. In the views of many residents, the elections may have cost the businesses on that street alone over N500 million.

The elections also took a huge toll on the capital market. After a sustained appreciation of crucial indices of the capital market since late last year, particularly with an 11 per cent leap in January, the indices began to drop steadily in April, giving investors concerns. For instance, the Nigerian Stock Exchange’s all share index fell from 27,797.39 basis points recorded on January 25, 2011 to 24,733.38 in the first week of April, wiping off the earlier gains. Similarly, market capitalisation fell from N8.885 trillion in January to N7.902 trillion in April 2011. A key reason for the downturn in activities of the capital market, analysts said, was the fact that many investors who doubled as politicians sold their stocks to raise money to fund their campaigns. A lot of investors were said to be sceptical about investing in the market, especially during the elections, following the uncertainties that may surround the outcome of the elections.

Experts, including Mike Itegboje, president, Chartered Institute of Stockbrokers, fear that the capital market might not witness meaningful activities long after the elections are concluded. Foreign investors are reportedly also watching and waiting to see how the elections would go and their impact on the economy, expressing fear that if something negative came up as a result of the elections, they might find it difficult to move their funds from the market.

Olufemi Awoyemi, managing director, Proshare Nigeria, was emphatic last week that the period of elections was a bad time for the Nigerian economy. Analysts at Meristem Nigeria, a securities firm, forecast that the downturn in the capital market might continue well after the elections. They said apart from the fact that many investors sold their shares to fund their campaigns; others had adopted a sit-and-watch attitude to know the direction that things would take.

Daniel Nkwocha, lecturer, Criminology, Evan Enwerem University, Owerri, also said that on the days the various elections were held, all business premises, offices and shops within the country were shut down, even as international flights were restricted, which resulted in heavy losses to operators in all the sectors of the economy. He hinted that an average of N90 million was lost by a single airline, while at the Lagos ports, a lot of money was lost to demurrage as about 1,500 containers could not be cleared.

It is almost impossible to correctly quantify in numerical terms the losses suffered by businessmen, government agencies and the economy generally while the country was shut down on election days. However, the Lagos Chamber of Commerce and Industry, LCCI, estimated that Nigeria lost N210 billion. The organisation figures that for each day of the election that the economy was shut down, losses totalling N70 billion were recorded in terms of output and income, mainly in the informal sector businesses, which depend on daily incomes. The calculation is that since the nation's gross domestic product, GDP, is $173 billion, about N26 trillion, Nigeria would have lost N71 billion in one day.

Long before the elections, experts observed that government officials had jettisoned governance, relegating the problems of the country and the management of the economy to the background. For many months before the elections, the National Executive Council, NEC, presided over by the President Goodluck Jonathan, failed to meet regularly and when it met, no critical economic decisions were taken nor progress made. Public sector projects and contracts were not attended to. The President once castigated his ministers who often left their duty posts for campaign trips.

Indeed, the election dealt a heavy blow on the 2011 budget, which is yet to be passed, making Nigerians to doubt the performance of the budget if eventually passed. The budget may yet suffer more delay, as the President will be preoccupied with appointments and the task of forming a new government up till May. "This has implications for projects that should be executed to improve the investment environment as well as the welfare of the people because planning and productivity are affected in some segments of the private sector," observed Femi Deru, president, LCCI.

The colossal cost of the elections to the economy has led to calls by Nigerians that President Jonathan must work with the national and state assemblies to restructure the electoral process because Nigeria cannot afford the current cost of elections to the economy. "For each day the economy was shut down, losses are suffered in terms of output and incomes. Informal sector businesses are even harder hit as many of them depend on daily incomes," Deru said. He noted that investors' confidence was weakened before and during the elections due to uncertainties that come with elections, particularly since the country has a poor track record in managing political transitions.

Many Nigerians considered it absolutely unnecessary to declare election days work-free. Nigeria is described in some quarters as a holiday nation, which Ugo Stevenson, an Owerri-based actor, decried last week. "Consciously or unconsciously, we push ourselves into celebrating more instead of working. I don't think it should be so because it takes a heavy toll on the economy," explained Stevenson. According to him, as a nation in dire need of economic growth and development, Nigerians should work more especially since there are only two ways an economy thrives: from the services it renders and the products or goods it produces. "So, if we are not producing anything as was the case during the holidays for elections, and leaning on what other economies are giving us, it means we are losing and it is affecting the economy," continued Stevenson.

Oladapo Awosokanre, executive director, African Development and Advocacy Centre, AFRIDAC, United Kingdom, UK, who was in the country to monitor the elections, said it was quite unfortunate that the elections were carried out without consideration of its effect on the economy. "It is quite unfortunate that we actually had to halt all commercial activities. Elsewhere, especially in the UK and the United States, US, elections are held while all commercial activities go side by side. That was why it was quite alarming when Attahiru Jega, chairman of the Independent National Electoral Commission, INEC, cancelled the April 2 election suggesting a postponement to Monday, the first working day of a week. I see that as quite unfortunate because the cost of losing so much money in the economy is not something that our leaders actually consider when they are doing things," said Awosokanre.

According to him, it is only in Nigeria that "we have holidays at random without any concern for the economy. I understand that we lose almost N70 billion everyday there is a halt in commercial activities. And I am sure that is just a conservative estimate in a country where we don't usually keep data." While recalling his experience in the last election in the UK, which brought in David Cameron into power, Awosokanre said people were able to cast their votes and at the same time carry on with their normal commercial activities, "because all you need to do in an election is to go to the polling booth at the appointed election hours, and vote accordingly. We do not have total clampdown like it operates in Nigeria.”

Yusuf Adamu, manager, Red Roses Restaurant, Kano, is of the view that Nigeria has not reached a level where emphasis is placed on time. “We have not yet come to the recognition that time is money. Restriction of movement during elections amounts to shutting down the economy because it leads to loss of man-hours, which inflicts an incalculable damage to the economy,” he noted.

In countries like the UK, Adamu said businesses were allowed to go on while elections held between 8 am and 10 pm. “The time span usually allocated to the exercise allows everyone to vote at their own convenience without necessarily shutting down the economy. In our own case, the fear of rigging is the reason why this cannot be done for now,” he added.

Just like the UK and the US, elections in Ghana do not require restriction of movement and shutting down the economy. Adu Koranteng, a Ghanaian journalist, said the Ghanaian government did not declare a holiday during the presidential election in 2008. “We vote every 7th day of December in an election year, businesses are not closed and people go and vote only to resume back to their work. So, the election does not shed anything from the economy apart from the money spent on it,” Koranteng said.

Chuks Okoroezi, Lagos-based businessman, advised the federal government to show more interest in the impact of restriction of movement on the economy during elections. “What government needs to do is to set up a study to find out exactly what the country loses each time movement is restricted to conduct an election. If we know that X billion is usually lost on a single day when movement is restricted, we would be able to say whether the economy can cope when this is done four times consecutively within a month in an election year. Otherwise, we may have to stagger the elections for different levels to hold in different years, so that we can give the economy time to recover before we inflict another damage to it by way of a fresh restriction of movement,” he argued.

Stevenson expressed optimism that with the increasing level of political consciousness demonstrated by Nigerians during the elections, the country would soon toe the line of its counterparts in the developed world, by embracing a voting pattern that would not necessitate shutting down the economy. “In the future, Nigerians would definitely go to vote while they are working with the level of political awareness now raised unlike in the past. Maybe technology would have been introduced where people can go in, slot in their cards, do their voting and go back to their offices or back home," he stated.

Kola Jamodu, president, Manufacturers Association of Nigeria, MAN, however, believes that it is a price worth paying for an enduring democracy, which will promote a business-friendly environment through the election of capable hands. “MAN has a long-term view of Nigeria. So, we cannot be laying emphasis on short-term losses incurred during elections. Our members understand that our businesses would be better for it if the elections work out well and Nigeria becomes better entrenched in the comity of nations. If there is no Nigeria, there will be no MAN,” he said.

In his view, it was not out of place for INEC to restrict movement during elections; the ultimate target should be that in the future people would be able to vote online. Nkwocha also believes that if the elections at the end of the day produced credible leaders at all levels, it would more than make up for whatever the economy lost as a result of the temporary shut down.

The lessons for the federal government and Nigerians generally is to borrow a leaf from advanced countries and, perhaps, Ghana and refine the process of conducting elections without grounding the economy. The consensus is that the overriding objective of preventing rigging by restricting movement on election days would no longer justify the colossal losses to the economy.