The decision of the Independent National Electoral Commission (INEC) to postpone the presidential and National Assembly elections earlier scheduled for yesterday will cost businesses in the country about $7.605 billion (N2.737 trillion). The amount is about two per cent of the country’s Gross Domestic Product (GDP), which is approximately $427 billion.
Some states had declared Friday a work-free day, which has clear economic implications. In addition, many businesses and financial institutions also operated half-day last Friday because of the elections, just as the three tiers of government deployed their personnel to special assignments in relation to the elections.
More so, university lecturers as well as international observers had been deployed to states, lodged in hotels, ready for deployment to the polling centres. All these have dire cost implications for the economy.
Speaking in a telephone chat with THISDAY yesterday, Chief Executive of the Financial Derivatives Company Limited, Mr. Bismarck Rewane, listed the costs associated with the postponement of the elections to include direct cost, disruption cost, opportunity cost, consequential cost, and reputational cost.
Rewane explained: “With Nigeria’s GDP at about $427 billion, divide that by 365 days, you will get the GDP per day of $1.170 billion.
“So, the fact that everybody stopped work today (Saturday), there is a direct cost of $1.170 billion. Then, there is the disruption cost. “Disruption cost is that you multiply the daily cost by three. That is because if I had booked a wedding today and now I have to shift the date again. So, that is $1.170 billion multiplied by three.
“Then, there is what is called the opportunity cost. That is, the things people would have done today, which is about 50 per cent of the direct cost. Then, there is what is called the consequential cost, which is usually twice the direct cost. “That is a total of almost $8 billion, which is about two per cent of Nigeria’s GDP.”
Furthermore, he identified reputational cost, which according to him, could not be quantified. This has to do with the damage the election postponement would have done to the country’s reputation considering, especially from the perspective of foreign investors and the foreign election observers.
“We have investors that have made their projections about this election and they never factored in this postponement,” he said, just as he expressed disappointment over the development.
According to Rewane, “Normally, if you have a project, you ought to be reviewing it every day. So, the fact that they (INEC) knew and announced the postponement five hours to the election, shows total lack of preparedness and it is disappointing.
“But the hope is that what they haven’t achieved in four years, we can achieve in seven days. Our hope is that they would do something dramatic.
“Remember that in 2015, the outcome was more important than the process, but in 2019, the process is more important than the outcome.
Therefore, if for any reason, what you have done is to jeopardise the process, it only makes the fact that there is going to be a contest by all aggrieved parties after the election.
“So, the costs are mounting and the clock is ticking and we hope the clock is not a time bomb.”