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Analysis: Nigeria’s economy under Buhari…for better or worse?

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Lukman Otunuga, Research Analyst at FXTM, comments on Nigeria’s economy under Buhari…for better or worse?

It is quite thought-provoking how this month marks just over three years since President Muhammadu Buhari secured a historic victory in Nigeria’s state elections.

There was a high degree of optimism over Buhari changing Nigeria for the better by reviving economic growth and fighting corruption &insecurity.

Much has happened over the past few years under the Buhari regime, with the nation going through various trials and tribulations. Confidence over the health of Nigeria’s economy was dealt a painful blow after a currency crisis threatened to cripple the nation. Inflation skyrocketed to worrying levels as the Naira tumbled and economic growth slowedfor the first time in 25 years. While it could be easy to blame the APC for Nigeria’s woes, it must be kept in mind that falling oil prices may have played a leading role.

What remains highly worrying is that the National Assembly has just recently passed a record N9.2 trillion budget for 2018. Such a development could negatively impact confidence over the nation’s political landscape, especially when considering how this budget was the most delayed in 19 years. It is worth noting that the 2017 budget followed a similarly disappointing pattern of delays which could have negatively impacted economic growth.

Speaking about economic growth, for the first time in over two decades Nigeria experienced a recession thanks to the combination of falling oil prices, political uncertainty and a sharply depreciating local currency. A strong suspicion remains that Buhari’s six-month delay to select a cabinet after being sworn in as President on 29 May 2015 weighed heavily on the nation.

His refusal to allow the Central Bank of Nigeria to devalue the Naira when falling oil prices were eroding the nation’s external reserves compounded to Nigeria’s woes. When the CBN eventually de-pegged the Naira in June 2016, the local currency depreciated so badly that the economy and citizens felt the pain.

The ripple effect ultimately created restrictions on international payments while crippling liquidity and repelling foreign investors.

Focusing on the macro economics, Nigeria’s unemployment rate has jumped 18.8% over the past three years, while youth unemployment rate is currently around 33.1%. Inflation rose to gravity-defying levels, from 9.8% in May 2015 to a 12-year high of 18.72% in January 2017.

Although inflation has moderated, dropping to 12.5% April thanks to the CBN’s efforts to promote FX stability, the effects can still be felt on the economy. While the country displayed its resilience againstthe global arena by staging a rebound in 2017 thanks to higher oil prices, the latest GDP report for Q1 of 2018 disappointed, by sliding 0.16%.

The truth is, Nigeria needs to implement more fiscal and monetary measures with a strong focus on agricultural development to boost economic growth.

Today, the nation proudly boasts foreign exchange stability and moderating inflationary pressures;this could be off the back of recovering oil prices.

Painful lessons fromthe past regarding falling oil prices should act as a wake-up call for the nation to break away from oil reliance and diversify into a self-sustaining economy.

The World Bank Group has expressed satisfaction over the performance of the Nigerian economy, while Fitch Ratings has affirmed Nigeria’s long-term foreign currency Issuer Default Rating (IDR) at B+ with a negative outlook.

With the implementation of the new Economic Growth and Recovery Plan (EGRP) supporting trade and capital flows, the outlook for Nigeria remains encouraging.

The Central Bank of Nigeria has the ability to boost economic growth by cutting interest rates. With inflationary pressures slowly becoming a theme of the past and economic data improving, it becomes a matter of when, rather than if, interest rates are cut.

President Buhari will be seeking a second term in office in elections next year and it will be interesting to see if he secures another historic victory. Whatever the outcome of the election, the future remains bright for Nigeria.

GrassRoots.ng is on a critical mission; to objectively and honestly represent the voice of ‘grassrooters’ in International, Federal, State and Local Government fora; heralding the achievements of political and other leaders and investors alike, without discrimination. This daily, digital news publication platform serves as the leading source of up-to-date information on how people and events reflect on the global community. The pragmatic articles reflect on the life of the community people, covering news/current affairs, business, technology, culture and fashion, entertainment, sports, State, National and International issues that directly impact the locals.

Finance

AISA Has Refunded The Fees Paid By Yahaya Bello To EFCC

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The Economic and Financial Crimes Commission (EFCC) says the American International School Abuja (AISA) has refunded the fees paid by the immediate past governor of Kogi state, Yahaya Bello, for his children attending the school.

In response to a letter addressed to the Lagos zonal commander of the EFCC, the school said $845,852 was paid in tuition “since the 7th of September 2021 to date”.

AISA said the sum to be refunded is $760,910 because it had deducted educational services already rendered.

“Please forward to us an official written request, with the authentic banking details of the EFCC, for the refund of the above-mentioned funds as previously indicated as part of your investigation into the alleged money laundering activities by the Bello family.

Since the 7th September 2021 to date, $845,852.84 (Eight Hundred and Forty-Five Thousand, Eight Hundred and Fifty Two US Dollars and eighty four cents) in tuition and other fees has been deposited into our Bank account.

We have calculated the net amount to be transferred and refunded to the State, after deducting the educational services rendered as $760,910.84. (Seven Hundred and Sixty Thousand, Nine Hundred and Ten US Dollars and Eighty Four cents).

No further additional fees are expected in respect of tuition as the students’ fees have now been settled until they graduate from ASIA.”

In a chat with The Cable, the spokesperson of the EFCC, Dele Oyewale, confirmed that the school has refunded the money.

‘’The money has been paid into public account,” Dele Oyewale was quoted as saying

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Finance

Godwin Emefiele Disobeyed Direction Of Law With Intent To Harm The Public, He Printed ₦684.5M Using ₦18.9B Says EFCC in fresh charge

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The Economic and Financial Crimes Commission has filed a fresh charge at the High Court of the Federal Capital Territory against the embattled former governor of the Central Bank of Nigeria, Godwin Emefiele.

EFCC in the charge accused Emefiele of approving the printing of N684,590,000 at the rate of N18.96 billion.

EFCC also alleged that Emefiele broke the law with intent to harm the public during his implementation of the naira swap policy of the administration of former President Muhammadu Buhari.

The anti-graft agency also accused Emefiele of unlawfully approving the withdrawal of N124.8 billion from the Consolidated Revenue Fund of the Federation.

EFCC’s top prosecutor, Rotimi Oyedepo, SAN revealed that Emefiele will be arraigned on a new four-count charge before Justice Hamza Muazu

Counts one to four of the charge, read,

“STATEMENT OF OFFENCE: Public Servant disobeying direction of law with intent to cause injury to the public contrary to and punishable under Section 123 of the Penal Code Law, Cap. 89 Laws of the Federation, 1990.

“PARTICULARS OF THE OFFENCE: That you GODWIN IFEANYI EMEFIELE between the 19th day of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the CBN Act, 2007, by approving the printing of N375,520,000.00 pieces of colour swapped N1, 000, at the total cost of N11,052, 068,062 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.”

This and three other charges were stated against him. They read;

“COUNT 2: “That you, GODWIN IFEANYI EMEFIELE, between the 19th of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the Central Bank of Nigeria Act, 2007, by approving the printing of 172,000,000 pieces of colour swapped N500 (Five Hundred Naira) Notes, at the total cost of N4, 471,066,040 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.

“COUNT 3: “That you GODWIN IFEANYI EMEFIELE between the 19th day of October 2022 and 5th March 2023 in Abuja, knowingly disobeyed the direction of Section 19 of the CBN Act, 2007, by approving the printing of 137,070,000 pieces of colour swapped N200 (Two Hundred Naira) Note, at the total cost of N3, 441, 005, 280 without the recommendation of the Board of Central Bank and the strict approval of the President, Federal Republic of Nigeria which conduct of yours caused injury to the public and you thereby committed an offence.”

“COUNT 4: “That you, GODWIN IFEANYI EMEFIELE, on or about the 7th day of October 2020, in Abuja, within the jurisdiction of this Honorable Court, knowingly disobeyed the direction of Section 80 of the Constitution of the Federal Republic of Nigeria, 1999 (As Amended), by approving the withdrawal of the total sum of N124, 860, 227, 865.16 from the Consolidated Revenue Fund of the Federation in a manner not prescribed by the National Assembly, which conduct of yours caused injury to the public and you thereby committed an offence.”

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Transport

Federal Government To Launch Out 2700 CNG Buses, Tricycles Ahead Of First anniversary Of Tinubu’s Administration

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The Presidency on Sunday said it was ready to launch about 2,700 CNG-powered buses and tricycles before May 29 when President Bola Tinubu turns one year in office.

“All is now ready for delivery of the first set of critical assets for deployment and launch of the CNG initiative ahead of the first anniversary of the Tinubu administration on May 29.”

It said the Federal Government is set to deliver 100 conversion workshops and 60 refuelling sites spread across 18 states before the end of 2024.

The Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, revealed this in a statement he signed Sunday titled ‘Presidential CNG initiative set for rollout.’

“From the end of May, Nigeria will take some baby steps to join such nations that already have large fleets of CNG vehicles.

The CNG tricycle
The CNG buses

“All is now ready for delivery of the first set of critical assets for deployment and launch of the CNG initiative ahead of the first anniversary of the Tinubu administration on May 29.

“About 2,500 of the tricycles will be ready before May 29, 2024…working towards delivering 200 units before the first anniversary of the Tinubu administration,” said the Presidency.

He also said that over 600 buses are targeted for production in the first phase which will be accomplished in 2024.

In October 2023, about five months after the removal of the petrol subsidy, President Tinubu launched the Presidential CNG Initiative to deliver cheaper, safer and more climate-friendly energy.

The CNG Initiative was designed to deliver compressed natural gas, especially for mass transit.

The Federal Government earmarked N100bn (part of the N500bn palliative budget) to purchase 5500 CNG vehicles (buses and tricycles), 100 Electric buses and over 20,000 CNG conversion kits, with plans to develop CNG refilling stations and electric charging stations nationwide.

The FG had said the initiative would ease the burden of the increased pump price on the masses.More information added that the creation of a new plant on the Lagos-Ibadan Expressway that will assemble the tricycles while Brilliant EV will assemble electric vehicles when it receives the Semi Knocked Down components.

The Presidency explained further, “The SKD parts manufactured by the Chinese company LUOJIA in partnership with its local partner to support the consortium of local suppliers of CNG tricycles are set for shipment to Nigeria and expected to arrive early in May.

It is expected that before 2027, There’ll be a considerable wave of these buses and tricycles in use.

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