Introduction
The concern about investing during an election cycle is understandable, especially in a country where politics often influences economic outcomes. However, while political uncertainty can affect short-term market sentiment, long-term investment performance is driven more by economic fundamentals, policy reforms, and structural improvements. This rebuttal explains why Nigeria’s current economic indicators still present promising opportunities for patient and informed investors, even as the 2027 elections approach.
Original comment from Dr. Usman Isyaku:
"These are thoughtful details, Prof. My concern is still valid. You can't enter a market at the beginning of an election cycle. Politics and economics work together. Let's see how much profit people will declare in 2028."
I completely understand your concern — entering a market at the beginning of an election cycle can feel risky, and it is true that politics and economics interact. But saying that one cannot enter the market because of elections oversimplifies how markets behave and ignores key macroeconomic strengths and structural reforms already underway.
Let’s unpack this with economic realities rather than fear-based assumptions.
Disclaimer:
On a lighter note, Dr., I am well aware of your political leanings and your support for Atiku ahead of the 2027 elections, just as I know you are not a supporter of the current APC administration under President Bola Ahmed Tinubu. I genuinely respect your political convictions and your right to express them freely. Out of the same respect, I have always chosen not to engage with your political posts, as I am neither a politician nor aligned with any political party.
Therefore, my advocacy for stock market investment should not be misconstrued as an endorsement of the Tinubu administration. It is purely an expression of my personal journey as a beginner investor who has come to appreciate the stock market as a legitimate tool for building financial independence, regardless of the prevailing political climate.
1. Political Cycles Don’t Dictate Market Returns Alone
While elections introduce uncertainty, history shows that elections do not automatically derail markets — especially when the economy is supported by strong fundamentals.
For example:
• After the 2015 elections, the NGX continued to attract investors and delivered positive returns in subsequent years.
• In 2019, despite a tightly contested election, companies with strong earnings still delivered dividends and price gains.
Elections may add noise, but markets react more consistently to economic performance than headlines.
2. Stable FX Rate = Better Business Planning
Exchange rate stability is critical for corporate performance and investor confidence. Recently, Nigeria has seen:
• More stable FX rates relative to recent volatility, reducing uncertainty for importers and exporters.
• Less erratic naira depreciation in official windows, helping companies plan earnings, costs, and dividend distributions.
A stable FX helps:
✔ Multinationals operating in Nigeria
✔ Export-oriented businesses
✔ Consumer goods companies with imported inputs
This supports earnings predictability, which investors value highly.
3. Decreasing Inflation Rate Supports Real Growth
Inflation is one of the biggest enemies of investment returns. When inflation begins to fall:
• Real wages improve
• Consumer demand stabilizes
• Cost pressures on companies ease
A sustained downward trend in inflation helps improve:
✔ Consumer confidence
✔ Corporate profitability
✔ Long-term capital formation
Investors are more willing to put money to work when inflation pressure eases — even during election cycles.
4. Removal of Fuel Subsidy = Market Discipline
The removal of the fuel subsidy may be politically sensitive, but economically it:
✔ Reduces fiscal drain on government budgets
✔ Encourages private sector participation in energy markets
✔ Improves government revenue allocation to infrastructure, security, and social services
This may cause short-term price pain, but it forces market efficiency and reduces long-term fiscal imbalance.
Fiscal discipline strengthens macro stability, which is good for markets.
5. Dangote Oil Refinery = Domestic Energy Security
With the Dangote oil refinery coming online:
• Nigeria no longer needs to import refined petroleum products
• Fuel scarcity could become a thing of the past
• Cost of energy for industries could drop over time
This is a game-changing structural development with far-reaching economic implications:
✔ Lower production costs
✔ Better profitability for energy-intensive sectors
✔ Potential foreign-currency savings on import bills
Investors reward economies that reduce dependency and improve internal value chains.
6. Stronger Capital Market Regulation = Healthier Market
Post-2008 and post-2020 reforms reflect a more mature regulatory environment:
• Banks face recapitalization and stress tests
• Capital market reforms tighten governance
• Broker-dealer oversight is stronger
• Corporate disclosures are more transparent
Stronger regulation reduces systemic risk — which is exactly what long-term investors want.
A regulated and disciplined market attracts:
✔ Institutional investors
✔ Foreign portfolio flows
✔ Pension funds and insurance capital
These are the engines of sustainable capital market growth.
7. Elections Don’t Cancel Economic Momentum
Economic growth drivers often outlast the election cycle:
📌 GDP recovery & broadening
📌 Increased private investment
📌 Infrastructure expansion
📌 Corporate earnings growth
📌 Consumer demand resilience
Yes, elections matter — but markets are forward-looking. They price future expectations, not just present uncertainty.
In many countries, markets have:
• Rallied before elections
• Recovered quickly after
• Rewarded companies with strong earnings continuity
The Nigerian market is no different in principle.
8. Looking to 2028: A Promising Outlook
Despite political noise, there are several structural forces supporting market growth into 2028 and beyond:
🚀 Stable FX — supports corporate predictability
🚀 Lower inflation — boosts real returns
🚀 Fiscal reform — strengthens macro stability
🚀 Dangote refinery — enhances energy security
🚀 Tighter regulation — healthier market
🚀 Rising local and institutional participation
🚀 Strong dividend culture in many companies
🚀 Growth prospects in consumer, industrials, banking, and energy sectors
These are economic drivers, not just political sentiment.
Final Thought
No investment environment is risk-free — especially in emerging markets. But risk is not the same as uninvestable.
The smart investor does not wait for certainty — they manage risk through:
• fundamental analysis
• diversification
• strategic entry and exit
• long-term perspective
Elections may add uncertainty, but they don’t erase economic fundamentals. And markets always look ahead — not backwards.
So the real question isn’t:
Can we invest during an election cycle?
It’s:
Do we understand the underlying drivers of growth?
And today, the evidence suggests there are real structural opportunities for growth through 2028 and beyond, despite the political calendar.
