20th February, 2015
The postponement of Nigeria’s general election has hit the country’s faltering economy, adding to existing pressures caused by the global fall in oil prices, analysts said.
The six-week suspension was granted to give the military more time to secure and stabilise the northeast, which has been under assault by Boko Haram Islamists since 2009.
But doubts about whether that goal can be achieved, fears that a further delay may be necessary and suspense over who will actually win the March 28 vote has buffeted markets and left investors jittery.
“It (the delay) has sent a panicky signal to investors of an unsure tomorrow in our economy,” economist and author Vincent Nwanma told AFP.
On February 6 — the day before the postponement announcement — the Nigerian All-Share Index closed at 29,985, and had dropped 2,399 points or 8.0 percent one week later.
Top losers included blue chip firms such as National Salt Company Nigeria, a number of leading banks, Flour Mills Nigeria, the conglomerate UAC and Guinness Nigeria.
Bloomberg said in a February 9 report that the Nigerian stock market was the worst-performing in the world this year.
“The uncertainty occasioned by the six-week extension has taken its toll on the stock market,” said Gabriel Ilori Akinyemi, managing director of stockbroker firm Valmon Securities Ltd.
“People are selling their stocks at a loss,” Rotimi Fakayejo, the managing director of Enterprise Capital, told a local television station in Lagos.
Nwanma said the share losses were to be expected given the overwhelming negative sentiment.
“Buyers reduce their exposure in stocks and in the economy. The market is currently witnessing a lot of sell-off of their portfolio,” he said.