The Nation Newspaper

Tag: economic

  • Economic turmoil: From past to the present

    Economic turmoil: From past to the present

    SIR: Nigeria’s current economic woes are not isolated incidents but rather the peak of years of systemic challenges and policy missteps. From the decline of industries in the 1990s to the era of military rule marked by corruption and mismanagement, the nation has weathered numerous storms on its path to progress.

    In the vibrant tapestry of Nigeria’s economic history, the 1970s stood as a golden era, marked by robust growth, industrialization, and promise. However, the echoes of prosperity have gradually faded into the stark reality of economic downturns, leaving the populace grappling with unprecedented challenges.

    The 1970s witnessed Nigeria’s emergence as an economic powerhouse, fuelled by oil revenue and ambitious development projects. With a thriving manufacturing sector, a stable currency that cannot be competed with and strategic investments in infrastructure, the nation seemed poised for enduring prosperity.

    However, the dawn of the new millennium brought with it a stark reality check, as the nation grappled with a series of economic setbacks that threatened to undo decades of progress. Mismanagement, corruption, and global market fluctuations emerged as formidable adversaries, eroding confidence in Nigeria’s economic prowess and exposing deep-seated vulnerabilities.

    The decision to remove fuel subsidies, while well-intentioned, proved to be a double-edged sword, unleashing a torrent of consequences that reverberated throughout society. The subsequent free fall of the Naira sent shockwaves through the economy, triggering a cascade of hardships that tested the resilience of the populace.

    To understand the gravity of Nigeria’s economic predicament, one must delve into its root causes, which are as deep-seated as they are complex. Corruption, a scourge that has plagued the nation for decades, continues to gnaw away at its foundations, siphoning off resources meant for public good and fostering an environment of impunity.

    Inefficiency and a lack of diversification further compound the problem, leaving Nigeria’s economy dangerously reliant on oil revenue—a precarious position exacerbated by volatile global markets and shifting geopolitical dynamics.

    Despite ample opportunities for growth and development in sectors such as agriculture and manufacturing, inadequate investment and strategic planning have stymied progress and perpetuated cycles of poverty.

    Read Also: Nigeria’s economic transformation requires govt, citizens’ collaboration – First Lady

    The failure to address these systemic issues has left Nigeria vulnerable to external shocks and internal instability, undermining efforts to achieve sustainable development and improve the lives of its citizens. Without decisive action and a concerted effort to address the root causes of its economic woes, Nigeria risks being trapped in a cycle of decline, with far-reaching consequences for generations to come.

    As the leader of our great nation, the burden of Nigeria’s economic hardship weighs heavily on President Bola Ahmed Tinubu’s shoulders. In these trying times, we implore him to remain steadfast in his commitment to steer the country towards prosperity.

    However, solving Nigeria’s economic woes is not the sole responsibility of the government; it requires collective effort and sacrifice from all stakeholders. Citizens must hold their leaders accountable, demand transparency, and actively participate in nation-building initiatives. Only through unity and collaboration can we overcome the challenges that lie ahead.

    As Nigeria stands at a crossroads, the imperative for decisive action has never been clearer. Let us remain prayerful and hopeful that Nigeria will emerge stronger from this economic downturn. With resilience, determination, and a shared vision for a brighter future, we can overcome adversity and build a nation where prosperity is accessible to all.

    • Haroon Aremu Abiodun, NYSC, Abuja.
  • A blueprint for economic resurgence

    A blueprint for economic resurgence

    • By Ahmed Adamu

    The recent free fall of the Naira, plummeting from N460 to a staggering N1,600 at the official rate, has cast a dark shadow over Nigeria’s economic landscape. With inflation soaring from 22% to 30% within a year, the consequences are dire – exacerbating poverty, fostering frustration, desperation, and fuelling a surge in insecurity. The value of the Naira is the economic heartbeat of the nation, impacting the lives of every Nigerian. As the Naira weakens, so does the economic well-being of the average citizen.

    In this critical moment, the responsibility to protect and restore the Naira rests not only on the government but on the shoulders of every Nigerian. While the government bears a significant share of the responsibility, the path to redemption lies in collective action. Drawing inspiration from past experiences in countries like Germany, Zimbabwe, and Venezuela, the way out is straightforward and common. Here’s a comprehensive blueprint for restoring the Naira.

    Nigeria should first leverage foreign investment for large-scale agricultural production and solid minerals development. The oil sector is bringing foreign exchange because there is a massive foreign investment in the sector, so also, if we want to grow the agricultural and solid mineral sectors, large foreign investment must be injected into the sectors.

    Leasing agricultural fields to foreign investors, particularly for products with global demand, can stimulate economic growth. The federal and state governments must take the lead in the large-scale production of these global cash crops. We have high-potential cash crops that can generate a significant inflow of foreign exchange to Nigeria.

    For example, in 2022, Thailand generated up to $9 billion from exports of cassava alone. While Nigeria is the largest producer of cassava worldwide, a lack of storage and processing facilities results in the loss of more than 30% of the cassava produced, with the rest being consumed, contributing very little to our export basket.

    There’s no need to focus only on famous cash crops like cocoa, cotton, ginger, sesame, and maize; there are other products like cassia tora seeds, soybeans, palm oil, and others that also have high global demand. We can allocate a specific target of certain crops for some states, keeping a target export destination and quantity in mind.

    Regarding solid minerals, state governments must play a vital role in attracting large investors to exploit the licenses they hold for large-scale mining. They also need to address illegal mining, which drives away legitimate large-scale producers. The mining sector should be standardized, similar to the oil sector. One reason why state governments are not so active in the mining sector is the monthly allocation they receive from the federation, providing no incentive for the development of solid minerals. Allowing states more access to resources and powers and discontinuing or reducing federation allocations could encourage states to maximize the untapped potential in agriculture and solid minerals.

    Another strategy is reducing importation through import substitution to reduce the importation of non-essential goods that can be produced locally so that we can conserve foreign exchange. For example, within just last year’s second quarter (three months), we spent N3 trillion importing manufactured goods. Most of this bill could be substituted for locally produced goods or alternative demand. Within these three months, Nigerians spent N734 billion importing used cars. If we can build adequate mass transport systems, the demand for importation of used cars will reduce.

    Currency swap is an option too, but in a different way. This type of currency swap arrangement is where Nigeria receives foreign currency at an agreed-upon rate in exchange for access to agricultural and mineral resources, addressing both economic and resource needs. No country will agree to swap its currency for Naira, but many countries will accept swapping currency for agricultural and mineral resources.

    Nigerians must stop treating the dollar like a commodity. Purchasing dollars not for any foreign transaction but solely to store value must be stopped. Nigerians, especially the wealthy and those in government, must refrain from converting their excess Naira to dollars for storage. Nigerians must be patriotic and sacrifice these illusory gains to save the Naira. The hoarding of dollars must be stopped by limiting the Naira in circulation, encouraging digital currency, and strictly monitoring cash movement.

    There are more dollars in the hands of people than in the banks, which is why the Central Bank of Nigeria (CBN) cannot control the market. Since the CBN has limited control, Nigerians should only demand the dollar when there is a genuine need for it, specifically for foreign goods or services.

    Increased productivity, import substitution, and strict adherence to genuine demand for the dollar are essential. By doing so, the black market for dollars can be eliminated, as there will be enough dollars in the banking system to meet all legitimate demands.

    The government must cut its spending and prioritize key areas. A reduction in the deficit will free up more foreign exchange for market control. The government must cease borrowing, as the burden of debt makes it difficult to control the exchange rate when some of the available dollars are used for debt servicing.

    The CBN must halt the production of more Naira; making the Naira scarce could help improve its value. The scarcer the Naira, the more valuable it becomes. A scarcer and more valuable Naira will be critical in this strategy.

    Read Also: Be patient with us, Speaker Abbas appeals to Nigerians

    Redenominating the Naira notes could also be an option only after improving the export sector. This could be achieved by removing one zero from each Naira note to restore confidence in the currency. This would mean that a N1000 note would become N100 at its face value. If implemented today, the value of the dollar would become N160. This step could help build confidence in the Naira.

    People must have confidence in the Naira, regardless of the amount they possess. Confidence in the Naira is an essential feature of a strong currency. Other countries that faced similar challenges resorted to even reintroducing a new currency and, at some points, demonetizing their currencies, allowing any desirable foreign currency to be used as a means of exchange in their countries. This is the worst-case scenario.

    There are no two ways about it. The art of saving a currency is the art of production. No monetary or fiscal policy will work if we don’t produce for exports. A stronger Naira is possible only with stronger patriotism. Those hoarding dollars and using sentiment to inflate the value of the dollar are the true enemies of the economy; by hoarding the dollar, they are increasing inflation and thereby reducing the purchasing power of poor people’s income and the purchasing power of what they will eventually gain in Naira value. So, they are digging a hole for themselves, too. With patriotism, increased production for exports, reduced importation, and adequate dollars in the banking system, the dollar could be pegged at below N200.

    •Adamu is associate professor of Economics, Nile University of Nigeria, Abuja.

  • ‘Provide solution to economic challenges’

    ‘Provide solution to economic challenges’

    Senator Shuaib Salisu (Ogun Central) has admonished the National Economic Team to suggest fresh ideas that will help government quell the economic hardship being faced by many Nigerians.

    Salisu spoke during a briefing by the National Economic Team to the Joint Senate Committee on Finance, National Planning, and Banking, Insurance, and other Financial Institutions in Abuja at the weekend.

    He said the team must inform Nigerians when their pains and economic hardship will subside.

    He said: “My people in Abeokuta and their counterparts in Ajaokuta do not care about the Monetary Policy Committee (MPC) rate coming out in February; they are not at home with the nuances of the foreign reserve. The question they want me to ask the economic team is, when will this pain subside? When will your strategy begin to materialise in their welfare and well-being?”

    Read Also: Why Tinubu should not be blamed for Nigeria’s economic hardship – Sanusi

    Salisu, who is the Senate Committee Chairman on ICT and Cyber Security, described the economic situation as unbearable and called on the Economic Team to adopt a unified communication approach to address the country on the way out of the current economic challenges.

    He added: “Your team needs to be unified. You must have a conversation with our people because they are the ones feeling the pain, so they need to understand what you have done so far and what still needs to be done to mitigate their sufferings.”

    At the session with the Senators were the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, his counterparts in Budget and National Planning, Agriculture and Food Security, Abubakar Kyari and Governor of the Central Bank of Nigeria, Yemi Cardoso.

    Senator Salisu also urged Coordinating Minister of the Economy and his team to begin looking at the 2024 budget and identify the priority areas that will bring relief to the people for immediate implementation.

  • Economic crisis simmered for too long

    Economic crisis simmered for too long

    Food prices are running amok, stoking inflationary pressures; forex rates (official and parallel) have gone berserk; discontent is growing on the back of hunger, misinformation and ignorance; and the system is pervaded by political chicanery taking advantage of government’s fitful remedial measures. The Bola Tinubu administration refuses to yield to paranoia but reposes inexplicable confidence in palliatives and financial dole-out that probably complicate the crisis. President Tinubu’s economic managers convince themselves, the president, and experts that they are tackling Nigeria’s misshapen economic fundamentals, but because the benefits have not quite trickled down to the poor and downtrodden, the country is in uproar. Having simmered for far too long, Nigeria’s economic crisis has seemed on the surface frustratingly unresponsive. This apparent lack of responsiveness is now complicated and deepened by hoarders, speculators and kidnappers.

    It is not clear how sanguine the public would remain in the face of a statistical depiction of the crisis, but at least Nigeria’s economic managers are beginning to recognise the need to explain just how long the crisis had been simmering, the scope of the problem, and the advantage of tackling the problem from the root, regardless of how slow in coming the final resolutions might be. Refusing to grapple with the fuel subsidy issue at the onset of the Tinubu administration would have been catastrophic. Tiptoeing around those who masterminded the horrifying pillage of national resources would have been politically safe but a recipe for future disaster. And ignoring needed and urgent reforms of the financial sector might have proved sensible in the short run but disastrous in the medium to long run. Last Tuesday, at the House of Representatives, Central Bank of Nigeria(CBN) governor Yemi Cardoso contextualised the economic nightmare confronting the country when he disclosed just how badly and poorly and irresponsibly the economy had been mismanaged.

    It would require magic to expect Nigeria’s economic mismanagement to lead to anything but the disaster experienced in the past few years, which have now come to a dismal and catastrophic head in the first year of the Tinubu administration. For instance, said Mr Cardoso, in about 10 years, Nigerians spent close to a hundred billion dollars on personal travelling allowance, education and medical treatment abroad. This was at a time when forex from oil exports declined from a little over $93bn in 2011 to about $31bn in 2020. The other forex indicators were much worse and frightening, indicating that Nigeria had splurged its wealth for decades hoping implausibly that a day of reckoning would not come. Take food imports for instance. In 1980, the country required about $2.8bn to import food; but by 2019, it was spending $14.84bn. Putting it more graphically, the CBN governor said that in 1980, Nigeria’s import expenditure stood at $16.65bn while exports amounted to some$25.97bn, a surplus of about $9.32bn. He also added that between 2003 and 2013, Nigeria enjoyed a surplus of $7.98bn which helped stabilised the exchange rate. Then, to clinch the argument and put things in dramatic perspective, he said that in 1980, more than 75 percent of vehicles used in Nigeria were locally produced. But today, over 90 percent of vehicles driven in the country are imported. The same economic madness permeates the clothing sector. In short, the forex pressures have clear and unmistakable underpinnings.

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    Clawing its way back from the precipice will not be a cakewalk lasting a few months or even a few years. But a lot of ignorance is peddled on social media, and discontent is fuelled by malevolent opposition peddling distorted and self-serving statistics and outrageous ratiocinations. It is not yet known how capable the Tinubu administration is at weathering the pressures to adopt quick fixes, including pressures from organised Labour and opposition politicians intent on discrediting the administration. The Tinubu government has been in office for only eight months or so; even if it is disposed to magic, there is a limit to how it can conjure forex and satisfy hoarders and speculators. It must, therefore, begin to steel itself to run the gauntlet between saboteurs and speculators on one hand and critics and angry poor on the other hand. Doling out cash in the manner it currently does in the name of palliatives is of doubtful efficacy. Dealing with malevolent opposition and unions with kid gloves can also be counterproductive, especially in the manner the government yields ground and concedes arguments it knows are either wholly wrong or inapplicable.

    There can be no magic, not by anyone or party, least of all by ex-vice president Atiku Abubakar and his opportunistic and disunited Peoples Democratic Party (PDP) nor by the more starry-eyed sloganeer Peter Obi of the Labour Party (LP). The challenge before the Tinubu administration is to find better and more impactful ways of ameliorating the sufferings of the poor. But that there would be no hardship, in fact of the most pernicious variety, is wishful thinking. The scale of past economic depredation had been astronomical; remedying the disaster will take more than a few economic ambulances over a few years. The administration must steady its nerves and look for ways of communicating to the public the disasters written and enacted by past administrations, which disasters it is methodically trying to untangle.

  • Economic outlook: ‘2024 will be better by far but…’

    Economic outlook: ‘2024 will be better by far but…’

    Eben Joels is Managing Partner, Stransact Audit and RSM Correspondent firm in Nigeria. In this interview with Ibrahim Apekhade Yusuf, the upwardly mobile executive who leads a team of experts with experience across different verticals of the financial sectors offers interesting insights on how to turn around the economy with useful suggestions in the short, medium to long term. Excerpts:

    The economic outlook for 2024 is contingent on proactive economic policies and global dynamics. A comprehensive strategy addressing inflation, exchange rates, and security challenges is crucial for steering the nation towards sustainable economic growth. Overall, I can say that the economy will be better this year, though not a total transformation but it will be better. The local economic environment will be better than 2023, this is tied to the gradual phasing out of the current impact of petrol subsidy and FX reforms on the non-oil sector, and higher crude oil production relative to 2023 levels amid supportive oil prices.

    If CBN is able to have a better grip on inflation and exchange rates, it will be positive for the economy. If inflation continues to trend downwards globally, then it will be good for the economy because it will reduce the extent to which imported inflation will affect local prices.

    Besides, there are expectations for tighter fiscal policies and peak monetary restrictions align with the need for stability. Therefore balancing these policies to manage inflation aimed at promoting economic growth will be crucial to the economy in the long run. We also observe that risks to the inflation outlook in the year will be significantly driven by various factors including global economic conditions, oil prices, and supply chain disruptions. Mitigating these risks demands a holistic approach, combining prudent fiscal measures with effective monetary policies.

    Assessment of Tinubu’s seven months in office

    As you know, we Nigerians are not too difficult to please. We need only the barest proof of commitment to our collective well-being from political office holders to be satisfied.  In his inaugural speech, the President stated that he intended to hit the ground running immediately. In less than a month he had shown more bite than the previous government going by the bold reforms he initiated in removing fuel subsidies and moving towards unified exchange rates. Of course these reforms have eroded our purchasing power in the short term, but we are hoping that the pains will not go on for the entire term of this government.  We also need more reforms in our security set up.  We need to have community policing and a National Guard or some other form of Military, outside the army and the police, that will focus on armed bandits and other terrorist militias. We also need more encouraging signs that official corruption may one day no longer be the norm.  These are dreams only at this time.

    Appointments into MDAs

    The President’s appointments to key financial MDAs should inspire confidence, provided that the appointees possess the necessary expertise and commitment to address the economic challenges. Competence, transparency, and accountability are pivotal for steering the economy away from precarious situations. Recently, the EFCC chairman hosted the Executive Secretary of the Financial Reporting Council of Nigeria, FRCN, and the EFCC chair publicly affirmed that financial reporting and integrity are key to economic growth and development in Nigeria.  That is very interesting because more than a decade ago when we made the case that if the tax Authority- Federal Inland Revenue Service (FIRS) focuses on the integrity of financial reporting among companies doing business in Nigeria, it will be easier to find and punish most of the corruption in this country. Has it occurred to you that most monies stolen in Nigeria are routed through one incorporated entity or the other? The issue is that we have Regulators and Tax authorities that deploy most of their arsenal to over-audit genuine businesses that are ordinarily compliant while ignoring many entities that are nothing more than special purpose vehicles used to steal public funds because these Special Purpose vehicles (SPVs) are owned by highly placed politicians. Until appointees of the President show the spine and resolve needed to cleanse this country of corruption, we ordinary citizens will not believe the statements from government officials. They will be mere rhetoric.

    How to pull economy from doldrums

    The government should undertake major structural reforms. For example, this country is long overdue for a Federal Personal income Tax. It is sad that all the egg heads are unable to see this obvious fix.  It is even more sad that the most recent public corruption case in Nigeria is that of funds meant for humanitarian and poverty alleviation activities.  To steal directly from the less privileged appears most callous to any enlightened person.  We can fix this by simply requiring every individual adult of a certain age and above to file a tax return to the center and they get any poverty alleviation payments through their banking and other official information submitted in a tax return. This is how it works in other advanced societies where stealing of public funds is not as ubiquitous. There are many other obvious fixes, but the issue is that politics and state capture has been the biggest industry in Nigeria since 1998 when we returned to democracy. There is no genuine intention to fix this country by a critical mass of its political leaders and its people.

    The biggest issue we have is the absence of industry and enterprise. There are few motivations to be entrepreneurial in Nigeria when you can make more money and live an easier life by taking a political office. Until the incentive for political office is no longer the opportunity to acquire wealth and power, we would all continue to wallow in our poverty.  There will be only a minimal amount of Foreign Direct Investment (FDI), if there are no examples of big brands that have come into Nigeria and prospered.

    Tackling corruption

    President Tinubu started well, he dissolved all non-statutory boards to select new ones. To be candid, the fight against corruption in the country can only be won if there are consequences for official corruption.  The recent actions of the government that includes sanctioning a Minister in a so-called juicy ministry is a good step in the right direction.

    How Stransact and RSM are booting FDI inflows in Nigeria

    According to the United Nations, the population of Nigeria could reach 730 million inhabitants in 2100. The country’s growing young population means that public infrastructure is stressed but this presents an opportunity for future economic growth under the right political environment. It was not difficult to let RSM see the importance of Nigeria if the network intends to deliver on its strategy to be a leading global accounting, tax and consulting organisation globally. RSM has been around for over a century. They are the fifth largest accounting firm in the USA, the world’s largest economy.  RSM is also probably number five in Germany in terms of revenue after Ebener Stolz, Germany’s 6th largest firm, joined our network.  What is important for the network is the commitment of the member firms to certain values which we call the RSM DNA. Upon interaction with RSM four years ago, the network was convinced that Stransact is a firm that shares its DNA. We built our firm on values. Unleashing the human potential is why we exist.  We are still improving our processes and methodologies and as soon as our internal quality attains the global standards set by RSM, we shall be rebranding as RSM in Nigeria.

    How naira can gain fresh momentum

    The government should summon the same political courage it used to remove fuel subsidies to eliminate the sale of dollars on the streets. USD should only be held by banks and changed into Naira via bank accounts at a market determined rate. If we can implement a cashless policy  for the Naira, we should  be able to do the same for the USD held in cash by private individuals. The current black market scenario has made cash forex holdings the major avenue for money laundering in Nigeria. As the Naira fluctuates, most upper-class Nigerians now hold their liquid assets in forex here in Nigeria. Of course this is not the major. Until we stop importing fuel, and increase our forex earnings significantly, the Naira will continue to be unstable.

    In search of a trillion-dollar economy

    Such targets are a good start. It is good to have good dreams and to set ambitious targets.  While the ambition to achieve a trillion-dollar economy is commendable, it’s essential to recognise that the size of the economy alone may not be the sole determinant of national prosperity. The emphasis should be on the qualitative aspects of economic growth, focusing on improving the standard of living for citizens and fostering inclusive development. More importantly, the government should harness the UN’s Human development indices and build a program around them.

    What Dangote Refinery will bring to the table

    The commencement of the Dangote Refinery represents a milestone for Nigeria’s energy sector, promising to reshape the nation’s petroleum industry. As one of Africa’s largest refineries, its successful operation holds the potential to significantly boost local refining capacity, diminishing Nigeria’s reliance on imported petroleum products.  Hopefully we will never see fuel queues again. It contributes to our energy security and presents an opportunity for substantial savings on foreign exchange, positively impacting the country’s economic dynamics.

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    Short, medium to long term measures to galvanise economy

    In the short term, immediate measures to galvanise the economy should include targeted fiscal stimulus packages aimed at specific sectors most affected by current challenges. These can be tax incentives, grants, or subsidies to encourage businesses to retain employees and invest in operational efficiency. Additionally, expedited infrastructure projects can provide quick employment opportunities and inject liquidity into the economy.

    In the medium term, the government should focus on enhancing the ease of doing business to attract foreign investment. Implementing regulatory reforms, streamlining bureaucratic processes, and ensuring a stable and predictable policy environment can significantly boost investor confidence. Medium-term strategies should also include comprehensive skills development programs to equip the workforce with the capabilities needed for emerging industries.

    Looking to the long term, fostering innovation through research and development initiatives is crucial. Investing in education and technology infrastructure can create a knowledge-driven economy, positioning the nation for sustained growth. Moreover, the government should actively pursue sustainable development goals, emphasising environmentally friendly practices and promoting industries that align with global trends.

    Strategic partnerships, both domestically and internationally, will play a pivotal role in all phases of economic revitalisation. Collaborations with private enterprises, research institutions, and international organisations can bring diverse expertise and resources to support comprehensive economic growth.

  • Sharia Council and govt’s economic policies

    Sharia Council and govt’s economic policies

    It is strange how the Supreme Council for Sharia in Nigeria conflates economic policy and religion, in this day and age, and in a democracy, not a theocracy. The organisation’s president, AbdurRrasheed Hadiyyatullah, disclosed at its recent national conference that they supported and voted for the Muslim-Muslim ticket in order to help the country achieve progress, success and triumph. Instead, he wailed, the nation had sunk deeper into economic hardship.

    Edo 2024: I will get APC’s ticket, win gov election – Ize-Iyamu declares

    He did not say why he thought a religious ticket could achiev the miracle the Council craved. The APC presidential ticket made no such claims, drew no correlation between religion and economic and social progress, and indeed emphasised to the contrary that the party’s same-faith ticket was nothing more than a strategy to win the presidential poll. Clearly not many people were listening to the party’s standard-bearers; instead, groups like the Sharia Council were looking only at the face of the ticket. If it is any consolation to the Council, he should be informed that the wealthiest and most powerful countries in the world neither pray nor have a state religion.

  • Bagudu challenges Shari’ah council on viable economic suggestions

    Bagudu challenges Shari’ah council on viable economic suggestions

    The Minister of Budget and National Planning, Sen. Abubakar Bagudu, has urged the Supreme Council for Shari’ah in Nigeria (SCSN) to support President Bola Tinubu’s administration with viable economic suggestions.

    Bagudu gave the advice yesterday at a two-day National Conference organised by the SCSN in Abuja

    The theme of the conference titled “Matters Arising from 2023 elections and Associated Socio-economic challenges”

    According to the minister, the priority of the Federal Government is economy that works for all.

    “I will urge that as we deliberate, we should do so with conviction that what we say matters and interrogate programmes that we are doing.

    “So, you can provide us with maybe an alternative way or ways of improving those programmes or ways of boosting domestic production.

    “We trust in your capacity to bring to bear on those programmes that we do. The Supreme Council for Shari’ah in Nigeria plays a very vital role.

    “Let me assure you on something we know of, President Bola Tinubu is a democrat, he listens and he engages.

    “We appreciate that your love for the administration will necessitate you being bold and courageous to tell us what you think, what you felt is wrong so that if we have explanation or if we don’t have, we can be shape it together.

    “We don’t think of anything that you say as criticism or distancing yourself from us,’’ Bagudu said.

    He said that Tinubu’s administration was working hard in the last few months by taking difficult decisions that were necessary to restore microeconomic stability.

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    Earlier, Deputy Secretary-General, Nigerian Supreme Council for Islamic Affairs (NSCIA), Prof. Salisu Shehu, expressed concern over the rates of lesbians, gay, bisexual, transgender, queer (LGBTQ) among the youths in the country.

    In his presentation entitled, Lesbian, Gay, Bisexual, Transgender, Queer (LGBTQ) in Nigeria, Their Challenges to the Muslim communities and the nation: From the Islamic Perspective, Shehu advocated massive advocacy campaign against the menace.

    He said: “LGBTQ is a monumental unprecedented sexual pervasion that has the potency of destroying humanity in its entirety.

    “It is going to decimate the human species, truncate procreation and quicken the overall annihilation of human communities. So, there is nothing that has come to the human race that is an evil greater than the LGBTQ.’’

    Also, Prof. Ishaq Akintola, Director, Muslim Rights Concern (MURIC) said MURIC rejected LGBTQ in its totality and condemned countries who were promoting it.

    According to don, countries that support and promote LGBTQ should respect the culture, civilisation and the sovereignty of Nigeria.

  • Positive global rating raises macro economic prospects

    Positive global rating raises macro economic prospects

    • Moody’s rating confirms early reform gains
    • Supports for forex, foreign investments, lower costs

    The upgrade of Nigeria’s sovereign credit rating from ‘stable’ to ‘positive’ by global rating agency, Moody’s Investors Service, has boosted Nigeria’s macroeconomic outlook as early gains of ongoing reforms send positive signals of imminent economic turnaround.

    Moody’s, at the weekend, upgraded Nigeria’s rating up a notch from ‘stable’ to ‘positive’ citing prospects of a reversal of the deterioration in the country’s fiscal and external positions due to ongoing reforms.

    The global rating agency cited foreign exchange (forex) and petrol subsidy reforms as part of the consideration for the upgrade. 

    Moody’s also affirmed its “Caa1” long-term foreign currency and local currency issuer ratings for Nigeria.

    The latest rating upgrade came on the back of earlier upgrade by S & P Global Ratings in August 2023, which revised Nigeria’s outlook from ‘negative’ to ‘stable’ from negative, while affirming its rating of ‘B-/B’.  

    Fitch Ratings had last month affirmed Nigeria’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B-’ with a ‘stable outlook’.

    Fitch noted that the stable outlook underlined important steps taken by the government on fuel subsidies and forex reforms, which had happened “much more quickly” than anticipated, as well as government’s ambitions to substantially raise revenue.

    President Bola Tinubu’s government has received commendations for what an analyst described as “boldest reforms”, including the removal of subsidy on premium motor spirit, popularly known as petrol; the abolition of multiple foreign exchange (forex) rates, adoption of a relative market forex model, tax reforms and efforts to raise revenue and cut down debts proportionately.

    “These policy changes, and those potentially to come, have raised the prospects of a fiscal and external improvement in the country’s credit profile,” Moody’s stated at the weekend.

    Finance and economic experts were unanimous yesterday that the rating upgrade would impact positively on government and corporates’ access to cheaper funds, improve foreign direct and portfolio investments and help to steady the reforms environment.

    They however cautioned government to remain steadfast on the path of reforms in order not to send wrong signals to the markets.

    The experts who spoke yesterday included Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe; Group Executive Director, Investment Banking, Cordros Capital Group, Mr. Femi Ademola; Managing Director, TrustArthur, Dr. Basheer Oshodi; Managing Director, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf; Chief Operating Officer, GTI Capital Group, Mr. Hassan Kehinde and President, Association of Capital Market Academics, Professor Uche Uwaleke.

    Amolegbe said the upgrade was “a positive light at the end of the dark tunnel”.

    “For one, it means countries and businesses looking to do business in and with Nigeria and Nigerian entities will have confidence in our ability to meet our obligations as at when due. This also means our cost of borrowing, at least internationally, is likely to drop on the back a stronger outlook. It is also a positive sign for attraction of foreign direct investment into the economy,” Amolegbe said.

    According to him, the upgrade could lead to greater inflow of foreign investments as foreign portfolio investors will look at Nigeria in more favourable light as an investment destination, which could help sustain the bullish momentum the Nigerian capital market has been enjoying for the last few months.

    He noted that the rating upgrade was also a good signal for Nigerian banks, which might need to raise capital under a new drive of recapitalisation being planned by the Central Bank of Nigeria (CBN). 

    “If the outlook continues to improve, the relative cost of Tier 2 capital for those banks looking to raise funds to boost their capital could be cheaper on aggregate while improved equity valuation coming from this outlook could also help those looking to sell shares to the public to comply with the new capitalisation requirements,” Amolegbe said.

    Ademola said the rating upgrade by Moody’s was a good development which would motivate the government to undergo more reforms to the benefit of the country.

    According to him, while the upgrade is not significant, it is morally uplifting to the government and provides a balance to the uproar generated by the pains of the reforms, such as the resultant increase in high cost of living due to removal of subsidies.

    “The rating upgrade shows that the reforms are effective in getting the right attention and should attract investors back into the country in the near future. It is also expected that the populace would see the potential good turnaround for the economic and therefore support the government reforms,” Ademola said.

    He urged the government to further engage the people and explain the planned reforms and other actions that would lift the economic situations of all the citizens of Nigeria.

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    He added that government should also set expectations for each of its reform actions and carry the people along by engaging them through information sessions and mass media mobilisations.

    Oshodi said the rating upgrade would generally lead to improvements in public and private access to funds and further help to drive the reforms aimed at improving people’s conditions of living.

    “Where rating is better, pricing on foreign funds will be lower, overall conditions will be lighter, financial institutions and businesses will also have better funding terms from the global market,” Oshodi said.

    Yusuf said the revised outlook for Nigeria was “an acknowledgement of the impact of current economic reforms”. 

    According to him, the fiscal performance over the past few months had shown signs of remarkable recovery. 

    “Fiscal deficit ratios have improved, outstanding forex obligations have been substantially cleared policy distortions are being corrected. The impact on macroeconomic outlook in the short to medium term will be positive. The increasing prospects of domestic refining of petroleum products and improvement in crude oil output are consistent with Moody’s positive projection for the Nigerian economy,” Yusuf said.

    He however noted the urgent need to address the challenge of rising cost of living, pointing out that social outcomes are very unfavourable, particularly the surging food inflation.

    According to him, in addressing the challenge of rising cost of living, government may need adopt variety of policy interventions, including non-orthodox policy measures.

    Kehinde said the upgrade was a welcome development in the economic recovery journey and the implementation of the Renewed Hope Agenda of the government.

    He however noted that the Tinubu-led government needs to be deliberate in addressing insecurity in the country to stem the inflationary trend in the economy.

    “I expect enhanced rating with clear fiscal discipline around government expenditures, consolidation of gains from oil subsidy removal, purposeful borrowings, efficient management of oil revenues, and sincerity of purpose on government policies and their implementation,” Kehinde said.

    Uwaleke said the upgrade was “something to cheer about”.

    According to him, the upgrade is bound to have a salutary effect on foreign investments in Nigeria and, by implication, help to improve external reserves and liquidity in the forex market.

    “Its signalling effect could result in the rise in the price of Nigeria’s sovereign bonds, leading to lower yields and reduced cost of servicing Eurobonds.

    “The stock market is likely to witness increased participation of foreign investors, which is a welcome development against the backdrop of the planned banking sector recapitalisation,” Uwaleke said.

  • Nigeria full of manpower for economic, national development

    Nigeria full of manpower for economic, national development

    President Bola Tinubu said Nigeria has the requisite and sufficient manpower to spur development across all sectors of the economy.

    Tinubu stated this while receiving a report titled: ‘Industrialisation, Energy Security, and Climate Change: Issues, Challenges and Prospects,’ submitted by the Senior Executive Course 45 of the National Institute for Policy and Strategic Studies (NIPSS) at the State House, Abuja.

    According to a statement by his Special Adviser on Media and Publicity, Ajuri Ngelale, the President said his administration will review the document and integrate salient recommendations into ongoing policies and programmes within the Renewed Hope Agenda.

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    Commending the report’s wealth of research and recommendations, Tinubu said: ”I give you credit for a good job done. This report will be treated with all seriousness. You have fished out the issues. You have noted the challenges, and you have recommended very constructive solutions and showed the roadmap to achieve sustainable development goals for our country. Definitely, our hope is renewed.

    ”Who says that we do not have it as a country? Commitment to research and development; that high level of inquisitiveness, the manpower needed is here.”

    Director-General of the Institute, Prof. Ayo Omotayo, said during the ten-month period of the course, participants engaged in a series of lectures and seminars, brainstorming sessions, as well as study tours to 13 countries and seven states in Nigeria.

    He said the Senior Executive Course 45 comprised of 97 participants drawn from federal and sub-national governments, security and intelligence agencies, civil society, private sector and labour unions.

  • Experts stress on modelling for economic development

    Experts stress on modelling for economic development

    A former Director General of Nigerian Institute for Social and Economic Research (NISER), Prof. Olu Ajakaiye, President of Nigeria Association of Macroeconomic Modellers (NAMM), Prof. Adeola Adenikinju, a petroleum economist, Prof. Akin Iwayemi and the Dean, Faculty of Economics and Management Sciences, University of Ibadan, Prof. Abiodun Folawewo have stressed the need for effective modelling, to make sound economic decisions and set the country on the trajectory of development.

    They spoke at the opening of a two-day hybrid conference organised by NAMM, held at the seminar room of Centre for Petroleum, Energy Economics & Law (CPEEL), University of Ibadan, Ibadan, Oyo State.

    Iwayemi, Adenikinju, Philip Alegbe, Ajakaiye and Prof. Bernard Decaluwe, a Belgian scholar with Canadian residency, were given Fellowship of the association.

    Iwayemi, the chairman of the event, said shocks, both global and domestic, were not good for the country, adding that for the nation to develop like Singapore, it needed to increase its productivity and capacity.

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    Ajakaiye, the guest speaker, said the first thing that should be done was to improve the productivity of Nigerian economy like that of Singapore.

    Adenikinju said optimum decision making must be grounded in models and evidence as done in developed economies.

    Folawewo said with right modelling, Nigeria could be developed like Singapore and even outshine it, adding that there was little or nothing the country could do without modelling.

    The Director of CPEEL, Prof. Olugbenga Falode, who called for a paradigm shift in the ways economists do their modelling, said, ”shocks do a lot of damage to systems, economic, political and others.

    The Special Adviser to the President on Economic Affairs, Tope Fasua, said no economy could immune itself from shocks, noting that the country needed to look on more diversification.