NIGERIA’S ECONOMY COULD LOSE $10 BILLION, EXPERTS WARN

ABUJA-By midday, yesterday, the colossal loss to the nation’s economy, arising from the postponement of the general elections, hours before the exercise was scheduled to begin, was obvious.

Nigeria Economy Analysts said the nation could lose about $10 billion due to slow down in business activities caused by the one week postponement.

But in the estimation of the Director-General of Lagos Chambre of Commerce and Industry (LCCI), Mr Muda Yusuf, the economy could have lost about $1.5 billion. Sources at the ports put the losses in the sector alone at a minimum of N600 million.

The ports across the nation had been shut down on Friday ahead of the Saturday’s polls. One of the major implications of the general elections’ shift, according to experts, was an immediate threat to investors’ confidence which was speculatively building up in the financial markets in the past two weeks.

Apart from the maritime sector, other major sector of the economy worst hit by the election day that was not to be include aviation, banking, gas and oil, and road transport.

According to some analysts, the postponement will heighten uncertainty in the economy, erode investors’ confidence in the Nigerian economy and possibly trigger rise in fixed income yields and increased pressure on the external reserves.

Commenting on the impact of the development on the economy, Managing Director/Chief Executive officer, Financial Derivatives Company, Mr. Bismarck Rewane, said: “The total cost, including opportunity cost, direct cost, consequential cost, disruption cost and what we call reputational cost, if you put it together, everything will give you about 2 to 2.5 percent of Gross Domestic Product (GDP), which is about $9 billion to $10 billion dollars.”

Ayo Akinwunmi, Head of Research, FSDH Merchant Bank, on his part, noted that the postponement will lead to reduction in the nation’s GDP.

- VANGUARD