Election-related spends may worsen inflationary pressures, distract governance — CPPE cautions

95% of Nigeria’s economic woes from the fiscal side — Expert

BESIDES the perennial issues of inflation, high interest rates, dwindling credit to the real sector, insecurity and others, bedevilling the nation’s economy, experts have expressed fresh concerns that increasing political activities, and the attendant election-related spendings may take their tolls on the economy, too.

The experts, while giving their assessments of the state of the economy and its prospects, as individuals and businesses enter the second half of the year, noted that while inflation, insecurity and other factors had continued to hold down the growth of the economy, the increasing intensity of political and electioneering activities ahead of the 2027 elections, may affect the pace of reforms, budget implementation or the quality of economic management.

For instance, in a report, presented at the 2026 Mid-Year Economic Outlook Conference, organised by the Lagos Chamber of Commerce and Industry (LCCI), the Chief Executive Officer, Centre for Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, argued that election-related spending, in a build-up to the general elections, scheduled for the first quarter of Year 2027, could inject additional liquidity into the economy.

This, he added, might result in possible implications for inflationary pressures, foreign exchange demand and macroeconomic management.

The CPPE boss, who expressed ‘cautious optimism’ regarding the H2, 2026 Outlook, argued that growing political activity could distract policymakers from economic governance, reform implementation and the execution of critical fiscal and structural policy initiatives.

While urging the federal government to focus on lowering production costs, improving productivity and strengthening the competitiveness of Nigerian enterprises, he, therefore, counselled on the need to preserve policy consistency, despite increasing political activities ahead of the 2027 elections.

“It is equally important to minimise governance distractions and ensure that electioneering does not weaken the pace of reforms, budget implementation or the quality of economic management,” he added.

In his state of the nation’s economy assessment, development economist, Dr. Nnaemeka Obiaraeri, would want the government to address the foundational issues, hindering the growth of the economy.

“The issues are foundational, and for us to move forward, those issues must be effectively addressed,” he stated.

Obiareri stressed the imperative of rejigging the fiscal, governance, constitutional and electoral processes of Nigeria; since those factors had constituted a hindrance to the growth of the economy.

The development economist, who is also the MD/CEO, Taurus Capital and Advisory Services Limited, noted that while the monetary side, through the Central Bank of Nigeria (CBN), had continued to pull its weight in ensuring financial stability, such efforts were not being complemented on the fiscal side to enhance productivity.

“On the macro-economic side, we have had stability in the past three years, but 95 percent of the problems we have now are from the fiscal side. The government of the day is not doing anything on the fiscal side. There is no coordination between the federal, state and local governments.

“When you have financial stability, what you need to do is to go on the fiscal side to enhance productivity. Unfortunately, the national and sub-national governments that should have done this are found wanting.

“That is why I believe we should go back to the foundations by rejigging fiscal, governance, constitutional and electoral processes to what obtained in 1963, since the first republic remains the glorious days in Nigeria,” he added. (TRIBUNE)

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