Thursday, November 01, 2018  01.38pM  / By Doyin Salami / WebTV  

From the presentation presented on October 25, 2018 at the LBS alumni Networking Lunch by Dr. Doyin Salami, Chiar, NESG Economics Faculty and member of faculty, Lagos Business School, which focused on the theme  “2019 Elections And Your Business”.

In this second part, we follow up with a look at the build-up to the elections and the impact it will be likely have on the business environment.

Critical Issues During and After the Elections

1.       Will there be stability and smooth transition or disruption???

2.      How will key indicators react to the signals communicated by electioneering?

3.      How will the policy conversation be (re-)framed by the elections and their possible outcome?

• New helmsman at the CBN? Incumbent governor’s tenure expires June 2019, with possibility of renewal
  
• New administration [new perspectives] or… 2nd term for incumbent 
  
• Signals communicated by first steps – including composition of “core” or “kitchen” cabinet
  

So, How do Macroeconomic Indicators Respond to Electoral Uncertainty?

Source: LBS/ Doyin Salami

Now, What Plausible Scenarios for the Exchange Rate?

Source: LBS/ Doyin Salami

Projections

·         We see an 8–10% over-valuation of the Naira given the present differential between domestic and US inflation rates

·         However, in our view, exchange rate adjustment is contingent on pressure on the FX reserve holdings

·         We estimate US$34.33bn (Gross FX Reserves) as the threshold below which pressure on the Naira would be difficult for CBN to accommodate

Source: LBS/ Doyin Salami

How do Elections Affect Investor Sentiment?

Source: LBS/ Doyin Salami

·         Elections and Electioneering

·         Uncertainty vs Predictability

·         Candidate/Party Ideology & Policy Antecedents

·         Investor Class

-         Portfolio Investors

-         Direct Investors

·         Stability vs Disruption

·         Electoral and Post-Electoral Conditions

 Equities market experiences significant correction owing to heightened domestic uncertaintyt

Source: LBS/ Doyin Salami

 Salami surmised that the Equities market experienced significant correction owing to heightened domestic uncertainty leading to a net correction Year-to-date  of -15.13% and -11.64% Year-On-Year.

Coverage of the Presentation

1.      Ahead of Elections 2019: Where is the Economy Now? The State of the Nigerian Economy – Doyin Salami

2.      What Will Be The Impact Of #Elections2019 On Business - Critical Issues Identified By Doyin Salami

3.      How Corporates Are Faring Going into #Elections2019 – Doyin Salami

Download Presentation

PDF : The 2019 Elections And Your Business - Doyin Salami, LBS - Oct 25, 2019

Other Related Post From Doyin Salami

1.       #NES24: Leveraging Domestic Resource Mobilization For Sustainable Development(2) Oct 29, 2018

2.       #NES24: Fiscal Governance And Taxation in Nigeria - Dr. Doyin Salami Oct 25, 2018

3.       #NES24: Economic Questions for Nigeria’s Transition from Poverty to Prosperity – Dr. Doyin Salami Oct 24, 2018

4. #NES24:Stakeholders Explore Leveraging Domestic Resource Mobilisation for Sustainable Development Oct 24, 2018

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