How Do Markets React to Political Elections During Periods of Insecurity and Governance Crises? Evidence from an African Emerging Democracy

This study investigates how issues around insecurity and corruption may affect citizen/investor mood during political elections, the impact this may have on the chances of an incumbent (opposition) candidate getting re-elected (elected), and how markets perceive the actual election outcomes. To do so, it analyzes two presidential elections in Nigeria that were held in 2015 and 2019. The results suggest that the market reacted strongly positively to a change in presidency from an incumbent to an opposition party candidate in the 2015 election but weakly positively, at best, to the re-election of the incumbent candidate in the 2019 election. Overall, the study provides empirical insights into how markets can have a different perception toward incumbent and opposition candidate electoral victories during periods of insecurity and governance crises