An analysis of political activities and financial stability in Nigeria

Abstract

In this study, a comprehensive analysis was undertaken to examine the impact of political activities in Nigeria, particularly primary elections (for the APC and PDP parties) and the General Election, on various economic indicators and financial markets. Comparative research design was used to investigate the effects of the parties’ primary and general elections in 2023 on different economic indicators in Nigeria, namely inter-bank rates, exchange rates, all share index, and crude oil price. Data gathered for 30 days prior and 30 days subsequent to the party primaries and 2023 general election were evaluated for potential alterations or disparities that arose as a consequence of the election. The collective findings underscore the interplay between political events, economic indicators, and financial markets. They support the notion that political events, particularly elections, have strong synergies on economic and financial variables. The consistent pattern of significant differences in interbank rates, All-Share Index, crude oil prices, and exchange rates between pre-election and post-election periods suggests that investors and market participants are attuned to the potential economic and policy implications of political transitions. These findings have practical implications for stakeholders in Nigeria's financial and economic landscape, including policymakers, investors, and analysts. Understanding the dynamics between politics and economic indicators can inform investment decisions, risk management strategies, and policy planning.