- A report by SMB Intel analyses the cost implications of postponing the 2019 general elections on political parties, INEC and the economy.
- The Intelligence service also estimates that various key sectors of the Nigerian economy lost more than $1 billion.
- Bismarck Rewane, CEO of Financial Derivatives Company Limited, put the cost implications at almost $8 billion which include direct cost (at $1.17 billion), disruption cost (three times the direct cost), consequential cost (twice the direct cost ), reputational and opportunity cost (50%% of direct cost).
For postponing the Saturday, February 16 and March 2019 elections, Nigeria, Africa’s biggest economy, may lose about 2% of its GDP to the delays and other electioneering activities, analysts have projected.
SBM Intel, a geopolitical intelligence platform, estimated that various key sectors of the Nigerian economy lost more than $1 billion (N360.24 billion), using the country’s GDP figure at $420 billion.
In its report, titled ‘INEC Postponement Cost Analysis,’ the intelligence platform analysed the cost implications based on publicly available data. It analysed financial losses resulting from postponing the 2019 elections on the Nigerian economy, political parties and the Independent National Electoral Commission (INEC).
In a similar perspective with Thisday Newspaper, Bismarck Rewane, CEO of Financial Derivatives Company Limited, put the cost implications at almost $8 billion which include direct cost (at $1.17 billion), disruption cost (three times the direct cost), consequential cost (twice the direct cost ), reputational and opportunity cost (50% of direct cost).
Rewane stated that “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 on 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% 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.”
SBM Intel also analysed the impact of postponement on political parties and the electoral body It estimates political parties’ loss at N42.70 billion and INEC at N6.2 billion.
Few hours to the commencement of the poll on Saturday, Nigeria’s electoral commission announced the postponement of the Presidential, Senate and House of Representatives elections and simultaneously announced new dates. The move generated controversy as the Nigerian economy practically shut down and many counted their losses due to the halt in economic activities.