Oct 20 (Lagos) - Political risk has suddenly risen in Nigeria over the past couple of days as the news that there had been an attempt to overthrow the government by the Army came out.
It was revealed by "Sahara-reporters" that the Independence day parade in Abuja was cancelled due to a plot to assassinate the President. They also reported that 16 officers had been arrested in connection with the attempted coup.
This news could send local and foreign investors into a new dimension of risk that the Country has not experienced in the past 27-28 years. They could run away or they could take solace in the fact that the attempt was thwarted.
It will take re-analysis of the investment thesis for certain. This is because the current government has not been able to control the insurgency in various parts.
On the macro-economic front, things look better with rising external reserves, a bit of a bounce in the Naira and lower inflation. The rise in Taxation is a worry for Nigerians who are already dealing with greatly diminished buying power. People earning more than N 800,000 are going to be pay higher taxes from next year. The masses are not feeling it yet as food and transport fares are up multiple times then prior to 2023, and that means they may not oppose the take-over if it happened is the real worry for the investors.
We could be in for a re-assessment of risks.
Nigeria has gone through 5 coups in the past. The last one was more than 30 years ago. In Sub-Saharan Africa, there has been a rise in coups over the past 2-3 years including our Northern neighbors' Niger republic, Mali and Chad.
Political risk is very real risk at the moment. It must be addressed and covered well in advance of any unfortunate incidents. Analyst's will tend to study this risk over this week if they are not currently doing so already.
A lot of people in Nigeria at the moment have to no idea about that aspect of Nigerian history and have never been part of it. What we currently enjoy in Nigeria we are lucky to enjoy compared with what people went through say 30 yrs ago.