Nigeria Loses Over N800bn To Election Postpone

Stakeholders in the nation’s economy said on Sunday that the country lost over N800 billion to Saturday’s postponement of the presidential and National Assembly elections by the Independent National Electoral Commission (INEC).

Besides, they lamented that the development was too much for a staggering economy hoping for a possible revival.

In the aviation sector alone, experts said Nigeria lost at least N8 billion.

Affected by the loss were Air Peace, Dana Air, Max Air, Azman Air, Overland Airways, Med-View, Skyway Aviation Handling Company (SAHCO) Plc, and the Nigerian Aviation Handling Company (NAHCO) Plc.

Others were the Federal Airports Authority of Nigeria (FAAN), the Nigerian Civil Aviation Authority (NCAA), the Nigerian Airspace Management Agency (NAMA), the Murtala Mohammed Airport Two (MMA2), Lagos, including catering services.

Investigation carried out by Daily Independent indicated that the airline sub-sector alone lost over N3 billion as they could not operate on Saturday, the ground handling companies lost close to N500 million, government agencies lost over N2 billion arising from charges, while the catering services and MMA2 management, among others, lost about N2.5 billion.

A source close to one of the airlines told Daily Independent that the loss could have been higher if the election was slated between Monday and Friday.

According to the source, the airlines hardly operate at full capacity on weekends: Saturdays and Sundays.

Group Capt. John Ojikutu (rtd), the Chief Executive Officer (CEO) of Centurion Securities, confirmed to Daily Independent that the total loss recorded by the airlines may be over N8 billion.

According to him, being a weekend, the loss by organisations in the sector may be reduced, stressing that it may have been more on week days.

Apart from the domestic airlines, he said, some of the regional and international operators recorded huge losses, stressing that 80 percent of the agencies’ revenues were from international airlines.

He said: “It was weekend; so, for domestic airlines, the cost may not be much, but for the foreign airlines, ground handlers, it would be a big loss if they did not operate.

“Usually, the domestic airlines don’t have too many flights on Saturdays and Sundays. Moreover, whatever is their loss today, has been substantial gains to them in the last two to four weeks, arising from political campaigns and movement of politicians over the length and breath of the country by air.

“The effect on the foreign airlines today, too, is substantial if you consider the fact that 80 percent of our earnings in aviation come largely from the foreign airlines.

“The loss to aviation cannot be less than N8 billion to airlines, handlers, service providers, and others in the system.”

Besides, Basil Agboarumi, the Managing Director, SAHCO, decried the closure of operations and eventual postponement of the elections.

He, however, said the loss could not be quantified in terms of naira and kobo, but emphasised that its warehouses at the Lagos airport, which ought to have been open to airlines and ground customs agents, remained shut on Saturday.

Agboarumi pointed out that the ground handling company could not handle any of the domestic airline operators on Saturday, which further increased the losses of the company, stressing that all the flights of its clients were cancelled.

He added: “None of the regional airlines could operate to full capacity on Saturday.

“Some of them had to reduce their frequencies, but some of the international operators came in very early on Saturday, while the others later arrived the country in the evening of Saturday.

“Although the warehouse was opened, there was no patronage as agents didn’t turn up. So, it had to be closed earlier.”

Gale Of Losses In Real Sector

The Lagos Chamber of Commerce and Industry (LCCI) has stated that the postponement has cost the nation’s real sector no less than $1.2 billion owing to the disruption of activities across the states.

The Director General of the Chamber, Muda Yusuf, noted that several activities were disrupted as a result of the postponement, adding that a slowdown should be expected in the days ahead till the elections are conducted.

Yusuf stated that many SMEs’ activities were affected; the airports and seaports were shut down, while many people had to move from one location to another.

He added that the impact of the loss would be felt across the sectors of the economy, especially for activities scheduled for February 23, the new date for the elections.

The vice president, National Association of Chamber of Commerce, Industry, Mines, and Agriculture (NACCIMA), Tony Ejinkeonye, said Nigeria would lose billions of naira due to the postponement of the general election.

Ejinkeonye, who is also the Director, Business Development for Africa, Esilknet Africa Network Ltd., told Daily Independent in Abuja that the postponement would affect the economy adversely.

“It is quite unfortunate that the election was postponed. Economically, billions of naira have been lost and will be lost in the coming weeks. Industries, businesses, including airlines, were affected by the movement restriction.

“We expect also the same thing happening in the coming weeks. Most important effect is the perception of the international financial community.

“Situations like this will create panic with massive withdrawal and stoppage of funds inflow to Nigeria. I dread the effects in the stock market on Monday,” he said.

Ejinkeonye said that it would be difficult to determine the actual figure of the loss but noted that it would be in billions of naira.

He said, however, that the real cost would be the loss of investor confidence.

President, National Association of Nigerian Traders (NANTs), Ken Ukaoha, said the country would lose more than N140 billion in his sector due to the postponement.

Ukaoha noted that the postponement would affect the economy adversely in terms of money that the government, political parties, and ordinary Nigerians had already expended on logistics and otherwise.

He described the election postponement as appalling and unfortunate which could make the nation become a laughing stock in the comity of nations.

“The loss is monumental if you look at the economic consequences, essentially if you look at trading; Nigeria depends so much on daily turning of funds through distribution and redistribution of goods and commodity.”

Oil, Maritime Sectors Count Losses Too

Stakeholders in the oil and gas sector, as well as maritime sub-sector of the economy, also said the losses suffered due to the eleventh hour postponement of the election were unprecedented and worrisome.

A Petroleum Engineer, Martin Onovo, told Daily Independent that Nigeria indeed lost billions in the oil sector and other sectors due to the electoral hitch.

He regretted that Nigeria’s economic index revolves round its politics and its actors, adding that the development would continue to bleed the economy anytime there was friction.

Also, the South West Chairman of Independent Petroleum Marketers Association (IPMAN), Alhaji Debo Ahmed, said the sector was not immune from losses suffered from other sectors of the economy as a result of the botched elections.

Speaking on the financial implications of the postponed election, Deputy National President, Headquarters, National Association of Government Approved Freight Forwarders, Simeon Nwosu, said that individuals and organisations lost millions of naira.

According to him, several containers that were supposed to have been cleared out of the ports were still lying in the ports, adding that INEC’s action showed their shoddy preparation for the election.

He said these goods lying un-cleared definitely would attract demurrages to the detriment of the importers and the freight forwarders as the shipping companies and terminal operators would not waive the charges or penalties.

Speaking in the same vein, Sam Onyemelukwu, President, International Freight Forwarders Association (IFFA), said what was lost was huge.

According to him, the anxiety and fear of what the election may bring have made so many expatriates to travel to their various countries with the hope to return the following week after the election, only to hear while still in their countries that the election had been postponed.

Financial Sector Frets

Stakeholders and analysts also quantified the financial implications of the postponement. Those who spoke to Daily Independent quantified the loss in relation to the country’s gross domestic products (GDP) to be to the tune of billions of dollars.

Ayodeji Ebo, Managing Director of Afrinvest Securities Limited, said the loss to the economy may be difficult to be quantified at the moment because of the ripple of effects it would have on the economy in the long run.

He said: “We have to look at it in terms of dividing the country’s GDP by the number of days that the postponement will affect and if we look at this, then the loss will be in billions of dollars. Some companies were forced to really shut down on Friday. Some had half day on the same day.”

Implications On Foreign Investment

On the implication on foreign investment, Ebo said this would have a negative implication as foreign investors may not take Nigeria serious anymore.

“It also sends a very wrong signal to foreign investors. They will not take us serious as a country. Because of that perception, they may want to slow down in their investment and this is not good for our economy,” he said.

Ambrose Omorodion, Chief Research Officer at InvestData Consulting Limited, said business owners who had made plans for the new dates would have to change the dates and it would be difficult to quantify the loss.

To Cyril Ampka, an Abuja-based economist, the cost of the postponement is escalated by the fact that the announcement came on the very day the elections were to be held after a number of irreversible steps had been taken by various economic agents and actors.

Prof. Uche Uwaleke, Head, Banking and Finance Department, Nasarawa State University, Keffi, said the development could widen the fiscal deficit, stressing that this doesn’t amount to additional borrowing by the government.

“It also raises country risk for Nigeria. Any attempt to borrow externally will be at a higher cost.

“The information-sensitive stock market will be at the receiving end as I expect a bearish trend in the days ahead following this development.

“There is no doubt that this will have the effect of weakening investors’ sentiments and may even trigger further capital flight.

“I won’t be surprised if this first quarter of the year is characterised by lower capital importation and slower GDP growth.

“In the same vein, the Purchasing Managers Index reading for the month of February 2019 is bound to come in lower when compared to previous months.

“Overall, the postponement of the elections due to ‘logistic reasons’ was avoidable and does not bode well for the nation’s economy,” he concluded.

source:Independent