Impact of general elections on financial market in Nigeria

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Oyinlola Akinyede
Temitope Worimegbe
Thomas Ayodele


This study investigated the pre-and-post-event impact (PEI) of general elections on the financial market in Nigeria. Specifically, the study investigated the impact of the general elections on stock returns; money market and the currency market in Nigeria. Political instability increases financial vulnerability in countries having weak economic fundamentals and these are peculiar with emerging economies where political-institutional instability is on the rise. Twenty-four months data was analyzed comprising twelve months pre and twelve months post-election with the election month as the base month. The monthly all shares index, certificate of deposit issued, notes and deposit certificates, and official exchange rates for 1999, 2003, 2007, 2011 and 2015 election years were used to examine the impact of the general elections on financial markets in Nigeria using event study. The findings showed that the political environment has strong synergies with the economic and real sectors of the economy. Therefore, the general election had a significant impact on the three markets. Findings also showed that the stock, money and currency markets’ returns were influenced by money supply and change in election periods. Therefore, the study recommends that government should engage in effective regulation of the financial market and electoral institution as well as stimulate the economy after the election through appropriate expansionary policies.


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