HERE’S WHAT HAPPENS TO THE ECONOMY AND NAIRA JUST BEFORE AN ELECTION YEAR

HERE’S WHAT HAPPENS TO THE ECONOMY AND NAIRA JUST BEFORE AN ELECTION YEAR

AUTHOR:

Mayowa Tijani 

JANUARY 12, 2022 8:06 AM

 *Oknews* 

It’s official, the campaign season is upon us full swing; Bola Tinubu, the former governor of Lagos state and self-acclaimed ‘kingmaker’ of the All Progressives Congress (APC) has thrown his hat into the ring for the 2023 presidential contest. Less than 24 hours after Tinubu, David Umahi, governor of Ebonyi state, also took the Aso Rock declaration stage to tell us he would be running for president.

Many more of these would continue well into 2022, but that is not our focus today. Since the year began, I have been looking at the numbers and they tell a beautiful story. They speak of what happens before an election year, and we would be analysing those under three main themes today, starting with gross domestic product.

The gross domestic product (GDP) of the country increases almost every year before an election — and this has happened since the return of democracy in 1999. In fact, GDP grew in 1992, in anticipation of the 1993 elections. The 1998 growth may seem like a fluke; we can say the transition from the military regime to a democracy would naturally have a great effect on the economy, hence the GDP growth.

But let us go to 2002, just before the 2003 elections. The Nigerian economy grew by 3.8 percent. While this may seem like a lot today, the year 2003 saw a big jump. The years 2003 and 2019 are the only election years in the last six election cycles that the nation did not record a drop in GDP growth rate. Major credit goes to the telecom revolution/maturity recorded in 2003.

For the rest of the elections; GDP growth rate increases in the year before the election, and drops slightly in the election year. In 2006, GDP grew by 8.2 percent, and dropped slightly in 2007 to 6.8 percent. In 2010, the GDP grew by 7.8 percent and dropped to 4.9 percent in the 2011 election year. By 2014, GDP grew by 6.3 percent, becoming one of the best performing economy around the world that year. If you remember, this was the year Nigeria became the biggest economy in Africa. The economic growth tapered to 4.9 percent in 2015.

In 2019, the story did change slightly; GDP grew by 1.9 percent before the election year. But even more in 2019. We recorded a 2.2 percent growth in the election year.

What we can establish for sure is that the Nigerian economy never experiences a recession before an election year. But the more interesting part of these indices is that Nigeria’s manufacturing indices often reduces before an election year — yet GDP grows. In simple English, we often manufacture less in the year before an election year, but GDP grows. You see the magic? The magic is spending. Consumption.