Nigerian election delays hit investor confidence

Stocks tanked on the Nigerian stock exchange following the postponement of the presidential election on 16 February. This underscores the need to ensure Africa’s elections remain as credible and efficient as possible.

On the scheduled day of Nigeria’s presidential election in February, candidates prepared for a last-minute voter push, organisers readied ballot boxes for dispatch, and some enthusiastic citizens even headed to the polls early. 

But with just hours to go until voting officially opened, the Independent National Electoral Commission (INEC) dramatically postponed the contest by a week, citing logistical challenges that they said stood in the way of a free, fair and credible election.

With tensions running high amid a tight contest between incumbent Muhammadu Buhari and challenger Atiku Abubakar, the last minute delay sparked voter apoplexy and familiar accusations of malfeasance and undue political pressure on the electoral commission.

Nobody should underestimate the huge logistical challenges of running a credible election in a country of over 200m people that stretches across nearly 100,000sq km.

In the weeks before the contest, several INEC offices were burned to the ground, destroying electronic smart card readers and voter cards and putting undue strain on the organisers.

Yet with years to prepare for the tight and tense contest, citizens and investors have a right to ask INEC how it came to this.

The delay set off the biggest decline in the country’s stock market in six months, putting pressure on Nigeria’s bonds and currency.

While the elections eventually went ahead, for investors, the delay destroyed value, stoked fears of a contested result and cast doubt on the credibility of the process.

“The economic consequences of this decision will be felt significantly, as what was supposed to be a smooth process is now mired in lengthened uncertainty and controversy, shaking investor confidence and eroding the renewed interest from both foreign and domestic investors,” analysts at Vetiva Capital wrote in a note following the initial delay.

Overcoming The Challenges

Despite the welcome regularity of elections in Africa – in 2019, more than a dozen national elections will be held, including in South Africa, Botswana and Senegal – delays, postponements and cancellations remain all too common in major states.

In 2017, Kenya was forced to re-run its election after the Supreme Court overturned Uhuru Kenyatta’s initial victory.

He won the re-run after it was boycotted by opposition leader Raila Odinga.

In December 2018, Democratic Republic of Congo held a controversial presidential election – originally planned for 2016 – that installed Félix Tshisekedi as president following delays in the release of results.

Despite these challenges, investors in the continent remain sanguine about Africa’s electoral realities.

Most are realistic enough to expect bumps along the way given the immense budgetary and logistical challenges of election organisation in developing nations.

Yet investors will be reluctant to allocate capital on the continent if they fear badly run elections will too readily turn into protracted battles with contested outcomes.

Governments, opposition parties, electoral commissions and citizens should renew their efforts to ensure that Africa’s elections remain as credible – and efficient – as possible.