Just a year after Buhari was elected into office on a mantra of ‘change’ it appears to be more of the same for Nigerians as the country is buffeted by ill winds from the global markets. Martins Azuwike reports on the shrinking of Africa’s biggest economy.
A year into Muhammadu Buhati’s tenure as president and com- mander-in-chief, his approval rating has sagged remarkably. According to a monthly survey recently published by the Governance Advancement Initiative for Nigeria (Gain), which follows governments’ performance at various levels, the president’s rating dropped to 32.8 per cent in February. It was 63.4 per cent in January. No one is
surprised; the economy has gone haywire. The poll, which was published at the end of February, showed for the first time since December 2015 that more Nigerians have become disenchanted with the “change” mantra on which Buhari rode to power last year, scoring President Buhari low on job creation, the economy and power supply. Bears still retain their hold on the Nigerian bourse. The equities market completed a hat-trick of negative closes on March 16 as
the All Share Index shed 0.3 per cent to close at 25,657.48 points while market capitalisation also dropped N30.1bn to settle at N8.8tn increasing YTD loss of the index to -10.4 per cent. Analysts maintain that the continuous retreat into the red zone is driven by the unremitting decline in key banking counters.
Market activity also waned as traded volume and value declined 31.9 per cent and 44.4 per cent to settle at 185.3m units and Nl.Sbn. That’s not all. Market sentiments also continued to be negative as the market breadth defined by the ratio of advancers over decliners (advancers’/decliners’ ratio) closed at 0.4x as a result of nine advancing stocks against 23 declining stocks. Afrinvest West Africa Limited, however, said: “The three-day losing streak in the benchmark index despite resilient FY:2015 results declared by some blue-chips is mainly due to profit-tation of weaker forward earnings (especially in the banking and consumer goods sectors) against the weak macroeconomic backdrop. Nevertheless, we continue to see value in the broader market for investors with a medium to long term horizon.”
The economic situation in the country has gone completely out of the control of government as a result of the global economy’s negative spiral effect on it, the minister of information and culture,
Lai Mohammed was quoted to have said recently during a radio broadcast in Abuja. The minister explained that this is because Nigeria cannot determine the price of crude or gas, maintaining that Buhari’s administration deserved credit from stakeholders for still managing to drive the economy amid the adversity. Mohammed has since repudiated a statement that has generated so much controversy among Nigerians, implying that his remarks had been taken out of context. “I don’t know the reason behind the gross distortion of my comments on
the radio today, but, whatever the motive is,
I GDP growth in Q4’15 down sharply to 2.11 per cent- a 17 year low
I FY’15 growth rate of 2.79 per cent compared to 5-year average o 6.24 per cent I Contraction in oil and gas sector
■ Contribution to GDP down to 8.06 per cent in Q4’15 from 10.27 per cent in Q3’15
■ Growth was negative at (-8.28 per cent)
■ Economic growth will pick up marginally from Q4'15
■ Ql: 16 growth projection of 2.4 per cent
■ Compared to five year average of 6.79 per cent
■ Factors that would constrain growth
■ Currency Exchange Pressures
■ Oil Price Slump
■ Inflationary pressure
■ Headline Inflation flat at 9.6 per cent in January
■ Estimated to spike to 12.3 per cent in February
■ Highest level since December 2012
■ Way above the CBN target of 6 - 9 per cent
I Nigeria is now among the 10 highest inflation countries in SSA Economic growth will pick up marginally from Q4’ 15 I Ql: 16 growth projection of 2.4 per cent
■ Compared to five year average of 6.79 per cent I Factors that would constrain growth
■ Currency Exchange Pressures
■ Oil Price Slump
Nigerians should disregard such distortion and continue to support our president and his administration to take the country out of the woods,” he said.
Things are so bad that some disgruntled Nigerians now refer to the “change” slogan as “chain”. Meanwhile, it has been reported that when Nigerian entrepreneurs visit global commercial hubs such as China and Dubai they find it difficult to buy the goods they want to import into the country. One of them, Deb Uchechukwu, told NewsAfrica after a trip to Dubai: “I could not buy anything out there. I took four Nigerian credit cards along with me but only one worked when I got there. When I made enquiries from the banks, their officials told me there was nothing they could do for me since the order to block such cards had come from the Central Bank.”
He added: “I hardly had money for my upkeep while I was there. If I had access to the money on those cards to buy goods, I would have sold them here to make some profit.”
Perhaps minister Mohammed’s mindset underscores the curious assertion by the president at a recent book presentation in Abuja that Nigeria “has the fastest growing economy in Africa and one of the fastest in the world. Our dominance is not so much because of our wealth, but because of the tremendous energy and resourcefulness of our people”. As far as most people are concerned, the president’s remarks are hardly in sync with the harsh realities on the ground — an interplay of oil price slump, surging inflationary pressures, fuzzy exchange rates, a lame-duck manufacturing sector, a weak agriculture sector, lingering power sector problems, and massive unemployment.
In an article entitled ‘Nigeria as the Fastest Growing Economy’, columnist Levi Obijiofor, asked, “Where are the facts?” Buhari’s assertion that Nigeria is the fastest growing economy could easily be challenged. If the Nigeria economy is as the president claims, why is it that some states have failed to perform their basic financial obligations? he continued. “Some states are unable to service their debts. And yet others are unable to provide funds to service state-owned institutions and departments. Many states are not in position to pay regular salaries and allowances to public servants. Teachers in many states are repeatedly owed monthly salaries or paid in arrears.”
He added: “If Buhari’s postulation were to be credible, we shouldn’t be caught in the currency quagmire. Sadly, our economy has gone into n inoperable phase. An economy in a terminal state cannot be described s being in a paramount position. Everyone is complaining about the high prices of foodstuff. Is that evidence of a nation whose economy is growing faster than the rest of the world?
“At a time of adverse performance by all sectors of the economy, the government should pay attention to how the economy should be stimulated, to assist in the revival of the local currency, and to promote national interest in agriculture and the solid minerals sector. Enhanced socioeconomic development is the key to every country’s advancement.
“An improvement in the economic conditions of the people will draw the benefits of democracy closer to the people. A democracy that deprives citizens of their basic needs, a democracy that makes people bankrupt, a democracy that contributes nothing to the welfare, wellbeing and security of the people is a poisoned prize. It is of no use to anyone. A democracy works best when it enhances the conditions of living of citizens and gives people hope for the future.”
The Lagos Chamber of Commerce and Industry (LCCI) said in a lengthy statement: “Today, the economy is confronted with persistent difficulties in the business environment especially in relation to insecurity in parts of the country, infrastructural conditions, foreign exchange crisis, funding issues, consistency of policy and the quality of institutions. Uncertainties and risks created by the political transition and the elections last year exacerbate the challenges.
“Data from the National Bureau of Statistics, suggest that the country’s real GDP dropped to 2.84 per cent in the third quarter of 2015, compared to 6.23 per cent in the same period in 2014. Sectors such as manufacturing and the services slid into recession after recording successive declines over the last three quarters in 2015.
“Even with the successful democratic transition that heralded a new political administration and presented a new wave of optimism on the back of the inherent goodwill of the administration at the federal level, business activities remind largely sluggish for a better part of the year following uncertainties around the general economic policy direction of the present administration. Nigeria currendy has a high dependence of imports supported by the huge amount of foreign currency needed to facilitate these transactions.”
A former president of the National Association of Nigerian Travelling Agents
Irregular power supply continues to be a problem across the country