by Godwin Akanfe

As we speak, the 2015 budget has not been passed. Why is this? It is because the legislators, who should pass it, are a little too busy electioneering.

There are two things that are worrying me seriously. For the better part of a year now, I have been paying some of my bills in US Dollars, and I can tell you without equivocation that the personal cost to me has gone up in the last three months. It has been a little unbearable.

Second, I am a part of a small consultancy, which specialises in market research. 2014 was a decent year for us, and we had looked forward to 2015 being even better. But there was a small snag, the elections. Towards the end of 2014, we negotiated two deals, which when we are done, would put us on the map, and more importantly, give us a lot of, err, profit. But there was a clause in both agreements: neither would kick in until the General Elections, previously scheduled for February 14 and 28, had come and gone.

We will soon know if our contracts will go on on the agreed dates, or if we will have to postpone until after the new election dates. I suspect it will be the latter. I also suspect that it is very much the same for a lot of other small businesses in Nigeria. It is definitely much the same, for our economy.

As we speak, the 2015 budget has not been passed. Why is this? It is because the legislators, who should pass it, are a little too busy electioneering. Please note the following: our financial year ends at the end of March, so it may be safe to assume that there will be no 2015 budget by the time the financial year ends. This may not be too much of a problem on the surface as there are fail-safes built in just in case the budget does not get passed on time. However, the fail-safes did not take into account the much reduced oil prices, which will no matter how you look at it, affect our national income.

The fail-safes also did not consider the collapsing value of our national currency, the naira. Which as of the close of business on Friday, 6 February 2015, was retailing at NGN213.50 to USD1 in some locations. Remember that the Central Bank is spending quite a ton of our national foreign reserves to maintain its slightly false value of NGN168 per USD1, while on the interbank market, the value fluctuates between NGN189 and NGN191. These little inconsistencies become very huge when time and demand are taken into consideration, and for the sake of my blood pressure, I’d rather not make a guess as to the damage that will be done to our reserves in the next six weeks. Nigeria, remains an import dependent economy…

While our Stock Exchange’s impact on our daily lives is still not as it should be, the uncertainty that we have just entered into can very easily lead to a major collapse of the All Share Index. Markets do not like uncertainty, and this one, is manufactured by our ruling political class.

Then there is the investor situation. There is zero doubt in anyone’s mind that there has been major capital flight from our country in the last few weeks, this capital flight is going to accelerate because of, you guessed it, uncertainty.

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Isime Esene