An Election Everyone Thinks Is Settled Is a Risk to Your Cost of Living

Let me be clear about what this article is and is not. It is not an endorsement, a prediction, or a case for or against any candidate. RainingMoney does not tell readers who to vote for.

It is an argument about incentives, and about a specific economic risk that builds whenever a political outcome is widely assumed to be a formality. That risk exists regardless of which party is the assumed winner, and it would be just as real if the positions were reversed.

Here is the situation. President Bola Tinubu won the APC presidential primary in May 2026 and is seeking a second term, framing the bid around continuing structural reform. The opposition is fragmented in ways that echo 2023: the African Democratic Congress has positioned Atiku Abubakar as its candidate, with its spokesman Bolaji Abdullahi arguing publicly that the party does not require a broad coalition to win, while other opposition figures dispute both the strategy and the platform. Several analysts covering Nigeria for international investors have already written the race up as settled.

I have no view on whether they are right. I have a view on what happens to public money while everyone believes they are.

Why elections are economic events

Three mechanisms, all well documented in Nigeria and everywhere else.

Spending accelerates. Governments approaching an election spend more, and they spend it on things that are visible — road commissioning, palliatives, transfers, contract awards. The CBN has itself flagged election-cycle spending pressures as a challenge to the inflation outlook for this year. More money chasing the same goods is the textbook definition of inflationary pressure, and it lands on households as prices.

Hard decisions get postponed. Any reform that hurts before it helps becomes politically radioactive as a vote approaches. Tariff adjustments, subsidy decisions, tax enforcement, loss-making state enterprises: the natural instinct is to park them until after the count.

Policy uncertainty prices itself in. Investors deciding whether to commit capital to a five-year project want to know whether the rules survive the election. The less clear the answer, the higher the return they demand, and that shows up as more expensive borrowing for the government and ultimately for everyone else.

None of this is Nigeria-specific or unique to any administration. It is what democracies do.

The part that is counterintuitive

Now here is where the argument gets interesting, and where I expect disagreement.

The conventional view — and the one most foreign investors hold — is that a settled outcome is good for the economy. It means continuity. It means the reform programme survives. It removes the political risk premium that markets attach to an uncertain transition. On that reading, a fragmented opposition is a gift to macro stability, and investors should welcome it.

I think that view is half right, and the half it misses is the half that determines whether reforms actually deliver.

A competitive election is uncomfortable for a government. It is also the only recurring mechanism that forces one to demonstrate results on a deadline. When a government believes it must persuade voters that living standards have improved, it has a powerful reason to make sure they have. When it believes the outcome is secure regardless, the incentive weakens — not because anyone is malicious, but because human institutions respond to pressure, and an institution under no pressure drifts toward the comfortable option.

The comfortable option in a pre-election year is almost always the same: spend more, explain less, defer the difficult item.

Continuity without accountability is not stability. It is momentum. The two look identical until something needs to change.

The fiscal picture this lands on

This matters more than usual right now, because of where the macro numbers sit.

Inflation has cooled for three consecutive months to 15.39% in August. External reserves are near their highest in eighteen years at around $54.67 billion. The policy rate stands at 26.50%, with real pressure building from businesses to cut. Growth of about 4.49% is projected for 2026, while the Finance Ministry has talked about wanting something closer to 7%.

This is a delicately balanced position, and every part of it is sensitive to fiscal loosening. A significant pre-election spending surge would push against the disinflation trend. It would complicate the CBN's ability to cut rates, because a central bank cannot ease into a fiscal expansion without risking the currency. And it would arrive while the US Federal Reserve is raising rates — it moved on 16 September for the first time since 2023 — which is already tightening external conditions for every emerging market.

In other words: the room to be fiscally generous before this election is unusually small, and the political temptation to be fiscally generous is unusually large. That is the tension worth watching, and it has nothing to do with who wins.

The tax reform is the live test

There is a useful, concrete case study already underway.

Nigeria's four new tax acts took effect on 1 January 2026, the most substantial rewrite of the system in decades. Small companies — those under ₦100 million turnover and ₦250 million in fixed assets — were exempted from company income tax. The VAT registration threshold doubled to ₦50 million while the rate stayed at 7.5%. Multiple overlapping levies were consolidated into a single 4% development levy. Filing penalties rose sharply, from ₦25,000 to ₦100,000 for a first month of default plus ₦50,000 for each month thereafter.

On 18 September the federal government opened a six-week technical review of those laws, with the Presidential Fiscal Policy and Tax Reforms Committee chairman, Taiwo Oyedele, describing the review as moving from restructuring the system to improving how it is implemented, and noting that the real test begins when the law meets the economy.

I think that is the right instinct and deserves credit rather than mockery. Reviewing legislation nine months in is what serious governments do.

It is also exactly the kind of process that gets politically compromised in the year before a vote. A review can tighten enforcement where leakages are real, which is unpopular and correct. Or it can quietly soften obligations for the loudest constituencies, which is popular and expensive. Which way it goes over the next six weeks is a genuinely informative signal about whether policy discipline is holding.

What to watch, rather than what to believe

If you want to judge this yourself rather than take anyone's word for it, four things will tell you more than any campaign speech.

The 2027 budget deficit and how it is financed. Size matters less than whether it is funded by borrowing at current yields.

Capital versus recurrent spending. Capital projects build capacity. Transfers and recurrent spending buy goodwill. The ratio is the honest indicator of intent.

Whether subsidy questions reopen. Fuel policy remains the most expensive political promise available in Nigeria, and at least one opposition figure has committed to restoring a targeted fuel subsidy. Any move on this, from any direction, is a multi-trillion-naira fiscal event.

What the tax review concludes in six weeks. Enforcement tightened, or obligations quietly loosened.

The bottom line

My argument is not that anyone should win, or that anyone will. It is that a democracy's economic discipline depends partly on politicians believing they can lose, and that when large numbers of commentators declare a result decided seventeen months early, that belief weakens on every side.

The cost of that weakening does not show up in a political column. It shows up in a budget line, then in a borrowing programme, then in a rate decision, and finally in the price of a bag of rice.

That is the chain. It is worth watching all four links, not just the last one.