• Pathetic! How Nigeria Crashed Out as Africa’s Biggest Economy Under Buhari

    11/Aug/2016 // 533 Viewers

     

    After the much celebrated declaration of the Nigerian economy as the largest in Africa and 26th in the world, South Africa has pushed the country back, climbing to the top position on the African continent.

    The International Monetary Fund, IMF, using the Gross Domestic Product, GDP, at the end of its 2015 report, rated South Africa as the biggest economy in Africa, taking back the first position it lost to Nigeria with a GDP of $301 billion, while Nigeria’s GDP stood at $296 billion.

    According to a report by Bloomberg, the South African currency, rand, has gained more than 16% against the US currency since the start of 2016, while the naira has lost more than a third of its value.

    South Africa’s economy has regained the position of Africa’s largest in dollar terms, more than two years after losing it to Nigeria, as the value of the nations’ currencies moved in opposite directions.

    Based on GDP at the end of 2015 report published by IMF, the size of South Africa’s economy is $301 billion at the rand’s current exchange rate, while Nigeria’s GDP is $296 billion.

    That’s after the rand gained more than 16 percent against the dollar, since the start of 2016, and Nigeria’s naira lost more than a third of its value after the central bank removed a currency peg in June.

    Both nations face the risk of a recession after contracting in the first quarter of the year. The Nigerian economy shrank by 0.4 percent in the three months through March, from a year earlier amid low oil prices and shortage of foreign currency. That curbed imports, including fuel.

    In South Africa, GDP contracted by 0.2 percent from a year earlier, as farming and mining output declined.

    “More than the growth outlook, in the short term the ranking of these economies is likely to be determined by exchange rate movements,” Alan Cameron, an economist at Exotix Partners LLP, said.

    Although, Nigeria is unlikely to be unseated as Africa’s largest economy in the long run, “the momentum that took it there in the first place is now long gone”.

    The South African rand rallied as investors turned to emerging markets with liquid capital markets to seek returns after Britain voted to leave the European Union on June 23, even as the central bank forecast the economy won’t expand this year and the nation risks losing its investment-grade credit rating.

    In Nigeria, investors did not flock to buy naira-based assets after authorities removed the peg of 197-199 naira per dollar. The Central Bank of Nigeria, CBN, raised its benchmark interest rate to a record in July, to lure foreign money, even as the IMF forecast the economy will contract 1.8 percent this year.

    Nigeria was assessed as the continent’s largest economy in April 2014, when authorities overhauled its GDP data for the first time in two decades.

    The recalculation saw the Nigerian economy in 2013 expand by three-quarters to an estimated N80 trillion. The rand gained 1 percent to 13.2805 per dollar at 4:03 p.m. in Johannesburg on Wednesday. The naira weakened 2.7 percent to N320 per dollar. - POST NIGERIA


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  • End of the Road As Buhari Hands Over Nigeria’s Economy To Foreigners

    11/Sep/2016 // 3328 Viewers

     

    POST.NG: In a bid to help Nigeria come out of her economic recession as quick as possible, the United Nation Secretary-General, Ban Ki-moon, has pledged to send a special envoy to the Nigerian Young Professionals Forum, NYPF, Summit, scheduled to take place in New York on September 24.

    U.N. Secretary-General, Ban Ki-moon, made this gesture during a press conference at the United Nations headquarters in Geneva, Switzerland.

    “The world should act with great urgency and compassion to ease economic distress”, Ban Ki Moon said.

    A statement issued on Saturday in Abuja, by Miss Owomilere Obe, Director of Communications of the forum, said that the summit was aimed at providing solutions to the recession facing the country.

    The UN Secretary-General, former Central Bank of Nigeria, CBN, Governor, Charles Soludo and Minister of Finance, Kemi Adeosun, are expected to attend the summit, according to the statement.

    “The summit is part of efforts to resolve the present economic crisis in Nigeria, and assist with credible projects that could potentially elevate Nigeria from its current status, as a third world country.

    “The theme of the summit is X-raying the Current Nigeria’s Economic Challenges and Our Foreign Policy, Prospect and Solution.

    “We can no longer pretend that Nigeria is not in a recession. This is evident by the dip in government revenues, drop in consumer spending, decline in economic activities, job losses, and most importantly inflation rate.

    “This is why we have come together as young professionals to address these issues, on the way forward for Nigeria,” Obe said.

    She added, that the summit would hold concurrently with the United Nations General Assembly, and it would feature discussions that border on inclusive growth, food security, economy diversification, and foreign direct investment.

    Obe, said that representatives of the International Monetary Fund, IMF, World Bank Group, African Development Bank, Bill Gates Foundation, EU, and Rockefeller Foundation, would feature in panel discussions.

    NYPF, founded by Moses Siasia, is a non-governmental organisation with more than three million young Nigerian professionals from diverse professions and perspectives.

    It recently inaugurated a special seed fund, ‘Young Entrepreneurs and Student Grant Scheme’, for young Nigerians, as part of efforts to grow more indigenous entrepreneurs, and encourage self-reliance.


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  • Outrage, anxiety as planned devaluation in 6 month's time pushes NAIRA to N600 /$

    12/Feb/2017 // 2346 Viewers

     

    Lukman Otunuga, a macroeconomics expert and research analyst at FXTM, says the Central Bank of Nigeria (CBN) may devalue the naira to 400 against the dollar on the official side.

    In an interview with TheCable, Otunuga said the situation might make the Nigerian currency rise to N600 at the parallel market.

    Otunuga, who forecast the devaluation of the naira in 2016, said the apex bank should conserve rising foreign reserves, while letting the naira depreciate to N400 per dollar.

    On the nature of Nigeria’s inflation, he said the country is dealing with cost-push inflation.

    “In December, it was 18.55 percent. The problem behind this is that we have a situation where producers do not have the ability to get dollars at the official rate,” he said.

    “So they use the black market and by using the black market, they push the cost back to consumers.

    “This is what is happening, and this is almost very hard for the CBN to tame. So in three to six months, there is a very string possibility of the Central Bank of Nigeria devaluing the naira, yet again, from 305 to probably 350 to 400 to increase liquidity and attract investors.

    “In this situation, the best is for the Central Bank of Nigeria (CBN) to hold reserves. The major thing is that they are actually buying, keeping the naira artificially at 305, this has created scarcity. I think it is best to let the reserves grow, and effectively devalue the naira.

    “If they do that, it has the ability to pushing the parallel market further to 550 to 600. You have to keep in mind, that the main reason why the parallel market exploded into uncharted territories was because we had recession fears, hike in US rates, and weak oil.”

    He said the optimism in the system, with positive forecast from the World Bank and the International Monetary Fund (IMF) about the economy, will minimise the effect of the imminent devaluation.

    Otunuga said Nigerians will understand that the intent is to attract foreign direct investment and solve liquidity problems.


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  • Nigerians groan as NECA boss, Larry Ettah, finally breaks silence, punches Nigerians' hopes by distressing revelation

    12/Sep/2016 // 411 Viewers

     

    PARIS, SEPTEMBER 12, 2016: (DGW) NIGERIA loses about $2 billion monthly as a result of the falling oil price, official figures from the Nigerian Employers Consultative Association of Nigeria (NECA) show. 

    Hopes of economic recovery were again dashed as the said that what the Nigerian government actually need to keep the government afloat is nothing less than $3 billion monthly while advising the government to find ways of addressing the economic challenges tearing the country down adding the price of crude would remain low remain low.

    The disclosure was made by NECA President, Larry Ettah. he reminded Nigerian that the world is developing new technologies as an alternative to oil and for that reason,  the price of oil would remain very low for a very long time. 

    He said: “The oil price will not go up to $100 per barrel as we used to enjoy. Gone are the days when we used to buy it for $80, $90 or $100  per barrel. We have to be living in a restructure environment in which case we have to be looking into how to diversify the economy. And I think this is a painful opportunity for us which we have to take.”

    To have a stable economy, Mr. Ettah advised the government to work on the power sector saying that Nigeria needs between 15,000 and 20,000 megawatts under the existing circumstances to stabilize the economy.

    “It is a shameful thing that while South Africa is talking of 40,000Mw, we are still celebrating 3,000Mw. The minimum we should be generating is between 15,000Mw and 20,000Mw. What it means is that there will be a lot of spending on power generation,” Etta said.

    He also blamed the ongoing economic downturn on what he described as a wrong economic  policy of the Buhari's administration.

    “For instance, if we are talking of deregulating, the foreign exchange (forex) market, imagine if we have done this one year ago, the foreign capital inflow would have  fared better,” adding that we should not forget that the problem of the Niger Delta, which has also affected our production, is there,” he added


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  • Foreign investors, companies flee Nigeria, stock market turnover drops to N10.3bn as Buhari's economic policies backfire

    12/Sep/2016 // 554 Viewers

     

    The country’s stock market recorded a drop in liquidity to the tune of N411m in one month.

    The drop reflected on the volume and value of shares traded between August 12 and September 9, 2016.

    A turnover of 1.183 billion shares worth N10.300bn in 16,522 deals were traded last weekend by investors on the floor of the Nigerian Stock Exchange. This, however, is in contrast with a turnover of 1.361 billion shares worth N10.711bn in 16,070 deals, which were traded four weeks ago (one month) by investors on the Exchange.

    Share turnover is a measure of stock liquidity calculated by dividing the total number of shares traded over a period by the average number of shares outstanding for the period. Thus, the lower the share turnover, the less liquid the shares of companies quoted on the Exchange and vice versa. 
    As of September 9, the financial services industry (measured by volume) led the activity chart with 1.015 billion shares valued at N7.136bn traded in 11,012 deals; thus contributing 85.83 per cent and 69.28 per cent to the total equity turnover volume and value respectively.

    The conglomerates industry also followed with 69.777 million shares worth N473.308m in 564 deals.

    The third place was occupied by the services industry with a turnover of 42.223 million shares worth N75.881m in 202 deals.

    Trading in the top three equities namely – United Bank for Africa Plc, Guaranty Trust Bank Plc and FBN Holdings Plc (measured by volume) accounted for 444.004 million shares worth N4.958bn in 4,153 deals, contributing 37.53 per cent and 48.13 per cent to the total equity turnover volume and value, respectively.

    However, as of August 12, the financial services industry (measured by volume) led the activity chart with 1.237 billion shares valued at N7.913bn, traded in 9,544 deals; thus, contributing 90.87 per cent and 73.88 per cent to the total equity turnover volume and value, respectively.

    The conglomerates industry followed with 46.182 million shares worth N77.192m in 637 deals. The third place was occupied by the consumer goods industry with a turnover of 38.102 million shares worth N1.372bn in 2,907 deals.

    Trading in the top three equities namely – Wapic Insurance Plc, FBN Holdings Plc and Guaranty Trust Bank Plc (measured by volume) accounted for 666.721 million shares worth N5.064bn in 3,205 deals, contributing 48.99 per cent and 47.27 per cent to the total equity turnover volume and value, respectively.

    The Chief Executive Officer of the NSE, Mr. Oscar Onyema, at the end of last month, said the Exchange would continue to do its part in ensuring that a competitive platform was provided for players to participate in the financial market.

    He said in addition to the Minimum Operating Standards recently launched by the Exchange, “We have executed several initiatives to strengthen the operations of our dealing members and to make them comparable with their foreign counterparts.

    One of the initiatives, according to him, is X-Boss, which automates and enhances the regulatory and oversight function of the NSE over its dealing members in the area of rendition of regulatory filings, analysis of financial renditions, capital and liquidity monitoring as well as compliance monitoring and reporting in line with global best practices.

    Onyema further explained that the Exchange had implemented a strong regulatory environment to protect investors against infractions while enhancing investor confidence in the market.

    The National Bureau of Statistics had said the country in the second quarter of this year recorded its lowest investment inflow in nine years.

    The participation of foreign investors in the NSE fell by 15 per cent between January and February this year, according to data from the bourse.

    The NSE had put the level of participation by the foreigners at 51.57 per cent for January 2016. But for February 2016, the number dropped to 36.48 per cent.

    To this end, the President and Chairman, Governing Council of the Chartered Institute of Stockbrokers, Mr. Oluwaseyi Abe, in an interview, said Nigeria’s natural endowments still made it a very attractive investment destination.

    However, he noted that this must be strategically supported by well thought-out policies.

    He added, “The truth of the matter is that many foreign investors still regard Nigeria as a good investment destination because of our current political stability. However, they will be further encouraged if we also have some consistency with our foreign exchange policies in line with the global best practices. At the heart of the capital market is the issue of participation of local investors. Expectedly, it is the local investors who ultimately will bring stability to the equity market.”

    He said the stakeholders in the market were bound to worry when the market was in a downward swing.

    But this, he noted, was one of the attributes of stock markets globally, stressing that it was only normal for the market to swing upward and downward because “that is what makes it a market.”

    Abe explained that the direction of the capital market at any given time was a reflection of the economy and “it’s been known that the economy has not been doing too well lately.  In this regard, it is even the best time to invest in the capital market because once the economy gets better, the capital market will recover as well.”

    Some of the factors that draw investors into the capital market, according to him, are positive expectation about the economy; adequate and positive information about the market; security of investment; good returns in the form of dividends and / or capital gains, and favourable government policies.


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  • Nigerians will lose millions if MMM collapses - Founder warns

    13/Dec/2016 // 701 Viewers

     

    The founder of Mavrodi Mondial Movement, popularly known as MMM, Sergey Mavrodi,  has warned that millions of Nigerians will suffer, because “the scheme is their only means of livelihood”.

    In a letter written to the Nigerian government to justify the importance of the popular Ponzi scheme, seen by the News Agency of Nigeria (NAN), Mavrodi warned the federal government should not allow the Ponzi scheme to collapse.  NAN said the letter was displayed on the page of all participants of the scheme.

    He stated that the money being made from the scheme was being redistributed among Nigerians as a way of “restoring social justice”.

    The letter reads in part: “So far MMM has come under a constant attack from you. In this regard, I would like to ask you a few simple questions. Since you are concerned with the interests of millions of your fellow citizens, I hope that you would be so kind to answer them.

    “What are you trying to get? Do you want the MMM System to collapse and millions of people to suffer? Who will support them then if now MMM is their only means of livelihood? Will you? You even don’t pay wages to people? Or might you not care about them? Might you be using a trendy topic to make a good name for yourselves? What will you say to a mother who will have no money to buy food for her child? Will you let her child die for the sake of the higher interests of the economy?

    “You say that MMM is a scam. What is the scam here, if all members are warned in advance about all the risks, the possible and impossible ones? They know there are no investments at all. The warning is a red text on a yellow background placed on most prominent place of the website.

    “You say that MMM is bad. Why? Yes, it produces nothing, but nothing gets out of the country either. The money is just redistributed among the citizens of Nigeria. It gets from those who are richer to poorer ones, in this way restoring social justice. What’s wrong with that?

    “You have repeatedly stated that “it should be investigated!.. researched!..” It means you know nothing about this System yet; you even haven’t understood how it works.

    “And finally. If you know what is right for people, why is the life so bad in the country?”

    He further noted that the MMM “has been working in Nigeria for a year, and according to your estimates, the total number of members now is about 3 million people”.

    The Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) have previously warned Nigerians against participating in the scheme while the House of Representatives also ordered an investigation into the operation of the scheme, in October.


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  • ‘Calm down and watch MMM unfreeze accounts in January’

    13/Dec/2016 // 328 Viewers

     

    An MMM participant has told other members that the freeze will help the community weed out the “bad eggs”.

    He also said the freeze will be lifted in January.

    The participant, who introduced himself as “Alpha Romeo”, assured participants that their money is safe with the scheme.

    News broke on Tuesday that the accounts of “Mavros” have been frozen and withdrawals have been suspended till January.

    “I want you to understand that MMM began in November 2015, it saw December 2015 and crossed into 2016,” he wrote.

    “Today, 2016 December, we are faced with many challenges. So many people are running multiple accounts and this is killing the system. They take money from A and pay to B, then C and D without bringing new spare money into the system thereby shortchanging the system and this has caused a lot of issues.

    “In situations where they are unable to pay, they upload a fake BOP. Many of us have issues of fake BOP and the issue of fake BOP is in thousands. CRO has too many fake BOP issues in their hands and that is why they have been unable to reply us quickly as they used to.

    “When I joined MMM in March, there was nothing like fake BOP, all those who were matched to pay were payed. Everything was fine until the bad eggs came into the system.”

    According to him, the freezing is a welcome development.

    “Now, this freezing of confirmed Marvodi is a very welcome development because it will the community and CRO the opportunity to weed out the bad eggs. Those people who have multiple accounts, who are cheating the system and uploading fake BOP will be trashed out this December.

    “Even guiders are very strong culprits of having multiple accounts and when participants are unable to meet up payments, they upload fake BOP thereby killing and wasting another participant’s time. I can assure everybody that the issue of fake BOP will be resolved this December maybe before 20th.

    “It is better to have 1 million faithful participants than to have 3 million participants where 2 million are criminals.

    “Be calm, be happy and know that your Mavrodi is safe. The freeze will be lifted in January and those of us who are genuine can GH in peace. By next year, there will be nothing like fake BOP. MMM cares about you.”


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  • No longer at ease, FG urged to declare state of emergency on economy to halt free fall of NAIRA

    13/Feb/2017 // 1301 Viewers

     

    PARIS, FEBRUARY 13, 2017: (DGW) AS the naira continues to fall resulting from the crippling effect of failed economic policies of the Federal Government , a Lagos-based lawyer Obiora Akabogu has bared his mind by calling attention to and suggested far-reaching measures to stem the tide. 

    He frowned upon handling of the situation with kid gloves by allowing the free fall of the naira to continue for such a long time, unleashing untold hardship on Nigerians when the president could have taken proactive emergency price control measures to force down inflation and halt the free fall of the naira.

    Nigeria is facing three quarters of negative Gross Domestic Product (GDP) growth and experiencing one of its worst inflation and revenue drops in over a decade. Inflation rate currently stands at 18.55 per cent, according to the National Bureau of Statistics (NBS). The naira is also facing serious pressure against the dollar, with exchange rate as high as N306 and N497 at the official and parallel markets, respectively.

    “Buhari’s failure to ameliorate the harsh effects of the crisis on Nigerians through the declaration of economic emergency or provision of social security networks was regrettable,” he said.


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  • President Buhari records major victory as World Bank makes heart-warming prediction on Nigerian economy

    13/Oct/2016 // 484 Viewers

     

    After going through economic recession in 2016, Nigeria will experience moderate rebound in 2017, the World Bank has said.

    The bank, which stated this in its report, Africa’s Pulse, anchored the nation’s revival on the Federal Government’s expansionary budget, expected to begin to yield result only in 2017 because of slow implementation.

    It also hinged its optimism of early exit from recession on stable oil prices in the international oil market as well as expected increased production of oil.
     
    The World Bank report said, “Among the region’s three largest economies, Nigeria is expected to endure an economic contraction in 2016, as declining oil production and manufacturing weigh on activity.

    “The economy is expected to rebound moderately in 2017 as the long-delayed expansionary budget begins to be implemented, oil prices stabilise, and oil production increases. The shift to a more flexible exchange rate regime is also expected to encourage some Foreign Direct Investment to return.

    “Investment growth is expected to pick up gradually in commodity exporters in 2017, following a sharp slowdown in 2016. In Nigeria, policy reforms are helping to improve the environment for private investment.

    “The fuel shortages that had severely impacted activity in the first half of 2016 have eased following an increase in fuel prices. The tightening of monetary policy should help stabilise the naira, strengthen real interest rates, and encourage a return of international investment in the economy.”

    It added, “Private consumption growth in commodity exporters, which weakened significantly over the past two years, is expected to improve gradually. The increase in headline inflation and hike in the interest rate by the Central Bank of Nigeria, which have accompanied the shift to a more flexible exchange rate, have weighed on private consumption in the country.

    “However, the exchange rate policy adjustment, coupled with the modest improvement in oil prices, should help boost oil revenues in naira terms.”

    This, in turn, it said, should enable the federal and state governments to meet their financial obligations, including the clearance of salary arrears, and help boost demand.


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  • Nigerians have no option but to be patient because we took the best economic decision - CBN Governor

    14/Aug/2016 // 263 Viewers

     

    The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, on Saturday said the apex bank took the best monetary policy option in addressing the current economic challenges facing the country.

    He also said that except Nigerians embrace fully the concept of diversification, the country would not be able to generate enough foreign exchange to cushion the effect of the drop in the value of the naira.

    He further said the inability of the country to increase its stock of foreign exchange, owing to the drop in global oil prices, was the major reason for the persistent decline in the value of the naira against the dollar.
     
    Emefiele, while speaking during an interview on the sidelines of a career conference in Abuja, said the Monetary Policy Committee of the CBN could not have taken a better decision in view of the current challenges facing the country.

    The event, put together by The Everlasting Arms Parish of the Redeemed Christian Church of God, had as its theme,” Your life, your future — not a laughing matter.”

    The CBN governor who was responding to a question from journalists on the criticism of the CBN policy by eminent Nigerians, including the Governor of Kaduna State, Nasir el-Rufai, said it would be difficult for the apex bank to achieve price stability without the current monetary policy stance.

    el-Rufai had on Wednesday faulted the decision of the Central Bank of Nigeria to increase the Monetary Policy Rate from 12 per cent to 14 per cent.

    He had said, “We have a Central Bank that has an MPR at 14 per cent and banks lending at 20 per cent. I have said it before and I will repeat it again, unless the Central Bank and the banking system make a conscious decision to bring the interest rate down, one day it would be legislated.”

    Represented at the event by the Deputy Governor, Economic Policy, Mrs. Sarah Alade, the CBN governor said once the objective of price stability was achieved, the economy would begin to experience growth.

    He said, “At this moment, what we are doing is what is best for the economy. The concern even among the youth is the slide in the value of the naira and I told them that we also need to diversify the economy so that we could have more exports; we are also supporting the efforts of the government on this. Once we are able to achieve this, we would have the kind of interest rate that we want.

    “But at this particular time, to be able to get through the situation, we would have to take the decisions. And the Monetary Policy Committee considers all these factors before we take decisions.”

    Earlier, the governor admonished the youth on the importance of hard work, dedication to excellence and perseverance in achieving one’s goal.

    He said by imbibing these qualities, coupled with the requisite skills, they would be able to become great leaders in any area of their endeavours.


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