The U.S. State Department has hailed Nigeria’s new president, elect Bola Ahmed Tinubu’s victory in a “competitive election” that “represents a new period for Nigerian politics and democracy.” Though opposition politicians may soon attempt to contest the result of the election, their efforts are unlikely to as previous election victories in Nigeria have been challenged in Nigeria’s court though a result has never been overturned. Though opposition leaders in Nigeria have taken to brandishing Kenyan and Malawian flags in recent days. That is because courts Kenya in 2017 and Malawi in 2019 over-turned election results such a result is unlikely in Nigeria.
Here is what business leaders need to know about the Nigeria’s economic election.
The Bonds Market Has Responded Positively To The Election Result
Nigeria’s bond markets have rebounded following the election. In part, this was due to the way that, despite some difficulties – Nigeria’s election was held largely peacefully. This is a signal that investors inspect the new president will continue the policies of outgoing President Mohammed Buhari. This includes efforts to improve infrastructure and financial reforms such as a move towards a cashless society. Many also hope that will go forward with a much-needed end to the country’s fuel subsidies. “This news shows that there is investor interest in the Nigerian economy and people. It’s a good omen that also suggests that observers expect the new president to build on his success as a governor of Lagos,” said Ajuri Ngelale, spokesperson for Nigeria’s president-elect Bola Tinubu.
Anti-Money Laundering Efforts Will Continue
Last month the Financial Action Task Force (FATF), a intergovernmental organization committed to fighting financial crimes, put Nigeria on its “grey list” of countries where dirty money is a concern along with South Africa. Grey listing means that the country is at least attempting to comply with the FATF unlike the three nation’s on the black list Myanmar, North Korea and Iran. The announcement may make investors wary of Nigeria. Indeed, according to an International Monetary Fund study some countries have seen outflows equal to 7.6% of GDP following a grey listing.
Ngelale acknowledged areas of poor compliance and noncompliance in the past. “We recognize the situation and the concerns of our international partners; the administration of President Bukhari is and is committed tidy and improve these things… We recognized Nigeria is moving toward a cashless society…the less cash in circulation, the less probability for malpractice and the fewer instances of money laundering,” said Ngelale who also said he expects the next president to continue these policies.
The Next President Will Seek To Develop A Consumer Credit System In Nigeria
The incoming administration President elect Bola Tinubu is committed to developing a consumer credit system. Despite various interventions by the Nigerian state in the economy in recent years, many industries in Nigeria remain in nascent stages. Such a system could spur more investments in local manufacturers, and real estate proponents say. Critics worry about the implementation of such a system in an under-banked economy like Nigeria.
“There has never been, up to now, a consumer credit system in Nigeria. So consumers have to pay upfront even for large purchases such as a car or house. This has had an adverse impact on the living standards of our people while preserving the hold of certain elites in Nigeria. A credit system will benefit all Nigerians and unlock jobs in manufacturing and housing construction…as part of an aggressive move to replace goods imported from overseas,” said Ngelale.