Another of my favorite African news sites is Quartz Africa, which has consistently insightful reporting on relatively underdiscussed issues. This recent piece on political business cycles across Africa is a great example. As authors Abdi Latif Dahir and Yoni Kazeem note,
It’s a recurring theme across Nigeria, Kenya and many other African countries where elections and the accompanying political uncertainty have usually had adverse effects on big and small businesses—impacting short-term growth…
Having contracts stalled and major projects abandoned is “very common” in Nigeria leading up to the polls, the Lagos consultant tells Quartz. “Election becomes a priority, and all money goes into that,” he adds. In the months leading up to polls in several African countries, governance is practically deferred with politicking largely taking over at significant expense. This holdout has even made phrases like “after elections” a colloquial mainstay during voting periods. Amid the uncertainty, businesses and investors also often adopt a wait-and-see approach—dampening economic activity.
The ambiguity over regulatory and policy direction during elections can also have an adverse effect on economies. In election years, governments can either be parsimonious or generous, depending on their desire to complete legacy projects. This affects how companies and investors, working directly with the government (through public-private projects) or indirectly (sourcing, from say, farmers who receive government funding), make plans, says Kenyan angel investor Stephen Gugu.
Read the whole piece, and don’t miss out on their weekly Quartz Africa Brief email as well.