Whether by the continued frosty relationship between the executive and legislative arms of government resulting in near paralysis of governance, heightening political risks, typified by ‘politics of win at all costs’ policy reversals as in the case of the suspended Air Nigeria project with the attendant accusations and counter accusations, government at all levels and its agencies are seen as greatest threats to the economy.

Consequently, some analysts are of the opinion that purposeful leadership that would engender confidence of Nigerians and investors, increase the pace and level of growth and harnessing of some positive economic indicators such as increasing and rebuild fiscal buffers, strengthening government finances in the medium term and reversing the current trend of decline in output growth, among others, would prevent the country from sliding into another round of recession.

“We are concerned about the slow pace and uneven nature of growth since exiting recession in 2017, but we wouldn’t say the economy is at risk of an imminent recession. Heightened political risk ahead of the 2019 elections is worrying but expected, as elections bring uncertainty which is bad for investment and growth. Nonetheless, we are optimistic of a 2.1% growth in 2018, supported by election related spending, strong oil prices and stable oil production,” says Adedayo Bakare of Investment Research, Afrinvest Securities Limited.

Friday Ameh, Lagos based analyst said at the weekend that continued tightening monetary policy measures, ostensibly to lure foreign investors as well as encourage foreign direct investments are being hampered by rising political risks.

“Government should put its house in order and give Nigerians purposeful leadership rather than bickering and falsehood being demonstrated at virtually all levels of governance,” he said.

According to Dr. Hussaini Muhammed, chief executive of Muregi Associates, Abuja based financial and consultancy outfit, “First and foremost the regulator (CBN) itself cannot be entirely exonerated from the current worsening economic doldrums. Central bank as an institutional regulator must address its current activities that are entirely unnecessary such as numerous agricultural loans or assistance and some of the questionable bailout funds to some financial and nonfinancial institutions.

“Another institution that needs to buckle up is the Debt Management Office (DMO) that continuously encourages states and government to continue to take loans unabated   in the name of Debt sustainability.

Recession generally comes and goes, therefore, the discipline to check the activities of operators inclusive of politicians is by and large squarely lies with the effective policies adopted by the central bank itself.

Politicians will always be what they are by engaging in excessive spending. I believe with right policies and effective supervision by the regulatory bodies, we should be able to survive and manage recession when and if it comes, it can be managed.

We must therefore, manage to cope with it and take example from other jurisdictions globally.”

John Darlington, managing partner of JD capital also blamed CBN for some abuses of corporate governance in the banking sector, and in most cases, taking belated actions on important issues.

For instance, on the last week’s revocation of Skye Bank’s license and establishment of a bridge bank, the former pioneer chief executive of defunct Bond Bank said, “This same act which the governor announced yesterday – why was this decision not made 24 months ago, when the fraudulent board and management of Skye Bank was dissolved?  Do we realise this delay in taken the appropriate action by the regulator has cost the beloved tax payers of our country N800 billion? What is the best approach in tackling corporate fraud and rot in a private bank because of the systemic risk if allowed to fail and at what price should this be achieved?

“After two years of publicly naming and shaming the chairman and the three previous CEOs’ of Skye bank, what has the regulator done to them? Aren’t they still roaming the street of our country proudly and arrogantly? What have the regulator done with the forensic report by the two out of the big four accounting firms in the country that the management of the bank fraudulently was maintaining two books of account from the inception of the bank? Today it is a known public information that the previous chairman of the bank blatantly abused his position as the chairman of the board in funding his assets acquisitions and lifestyle. The way and manner the actors that ruined the entire shareholders assets and net worth are treated and penalised will either determine or further encourage more abuses of this nature in other institutions if these actors that perpetrated this grievous fraud are allowed to walk away freely.

In conclusion, how corrective was this action? Yes very decisively but certainly coming too late and unfortunately at a high cost to tax payers. Was the CBN action proactive? Definitely NO. The same action would have been taken 24 months ago and tax payers saved the unfortunate bill of N800 billion. Way forward, I have no doubt in the competence and professionalism of our central bank but what I cry out for and pray for is for this  great iconic institution to consistently act with courage, promptness, decisiveness, for the larger good of our society and the interest of the full spectrum of the entire stakeholder family.”

For instance, members of the Monetary Policy Committee (MPC) at their last week’s meeting observed among others that “With crude prices averaging $80 per barrels, about $29 above the budget benchmark price of $51per barrel, and oil production rising to about 2.3 million barrels per day, the IT was optimistic that external reserves would strengthen in the last quarter of 2018.

Also, the committee noted the rising inflationary pressures are due to the impact of the disruptions to the food supply chain in major food producing states due to the combined effects of poor infrastructure, flooding and the on-going security challenges.

The committee said these situations resulted in a rise in food prices, contributing to the uptick in headline inflation.

Latest data by the National Bureau of Statistics (NBS) said inflation figures showed a marginal increase from 11.14 per cent in July to 11.23 per cent last August, the first rise since a declining trend in January 2017.

According to the committee “it was concerned that the exit from recession may be under threat as the economy slowed to 1.95 and 1.50 per cent in Q1 and Q2 2018, respectively.”

Specifically, Godwin Emefiele, Central Bank of Nigeria (CBN) governor, after the MPC meeting came out with a strong warning that Nigeria’s economy risks slipping into another recession if there is no synergy between monetary and fiscal policies to ensure macroeconomic stability.

Emefiele, listed current challenges to growth to include rising inflation and pressure on external reserves as a result of capital flow reversals, development, which prompted the committee to continue tightening monetary policy by retaining all fundamentals.

Consequently, the Monetary Policy Rate (MPR), the controlling lending rate by banks and Cash Reserves Ratio (CRR), the cash reserve allowable by commercial banks to drive their lending operations are still maintaining their high postures of 14 and 22.5 percent respectively.

The committee said the decision to continue to tighten monetary policy was to tame inflationary pressures, stem the reversal in portfolio capital, improve the external reserves position and maintain stability in the foreign exchange market.

Emefiele, who briefed journalists at the end of the meeting, said the committee noted however, that inflationary pressures are rebuilding, while capital flow reversals have intensified, resulting in the bearish trend in the equities market despite the stability in Naira exchange rate.

Consequently, he further said that the gains of a robust external reserve, with inflation trending downwards for the 18th consecutive month noted during July meeting is “appearing to be under threat of reversal”.

Also, the new data from the National Bureau of Statistics (NBS) showed weakening fundamentals traced to the contraction in the oil sector in the second quarter of 2018, compared with the previous quarter.

“This was worsened by strong linkages to employment and growth in other key sectors of the economy,” he said.

Specifically, Emefiele was concerned that the exit from recession may be under threat as the economy slowed to 1.95 and 1.50 per cent in Q1 and Q2 2018, respectively.

“In this regard, the committee urged government to take advantage of the current rising oil prices to rebuild fiscal buffers, strengthen government finances in the medium term and reverse the current trend of decline in output growth,” he said.

Amid weakening growth, the CBN governor stressed the need to sustain the faithful implementation of the 2018 federal capital budget and policies to encourage credit delivery to the real sector of the economy.

He said this would help in boosting aggregate demand, stimulate economic activity and reduce unemployment in the country.

On what Nigeria and other developing countries must do to improve citizens lives, President of World Bank, Jim Kim, called on world leaders especially those from Africa and Asia to invest in human capital development as a means of improving the lives of younger generations.

This, he said, would enable young people improve their survival skills.

Mr Kim made this submission in New York last week Tuesday at the Global Citizens Movement Makers Summit.

Mr Kim, in an interview panel anchored by the business correspondent of MSNBC news, Ali Velshi, said for Africa and Asia to attain the sustainable development goals, they must refocus their agenda by investing more in human capital development.

He said the world is moving from what the donors need to donate but to what governments are investing in people in terms of education, health and empowerment which would allow them to be able to compete in the world.

He said no matter how generous donors are, Africa and some Asian countries might never attain the sustainable development goals if the people from these continents do not have equal opportunities to compete with the larger world.

He said in order for them to be able to compete, they must have good quality education which would translate to capacity building and economic development for the nations.

“Almost everyone in these countries now has a mobile phone and they can see almost everything going on. So there is the aspirations of wanting to achieve these things they see.

“It is when they can’t that they become agitated, restless and aggressive,” he said.

Mr Kim said the World Bank would be releasing a human capital index report on all the countries by October.

He said most countries would be shocked from the report as it shows governments how each fared in human capital development.

He said for a country like Nigeria where 30 per cent of its under five population are stunted and many malnourished, there is likely to be a problem in the future.

He said to forestall these, the governments need to restrategize and look inward to develop young generations in the lower and middle income countries for them to have equal opportunities to compete anywhere around the world.

“Poor countries still face tremendous challenges, as almost a quarter of the children under the age of five are malnourished, and 60 per cent of primary school children are failing to achieve even a rudimentary education.

“In fact, more than 260 million children and youth in poor countries are receiving no education at all. The moral case is that investing in health and education of all people will translate to economic one as well.

“This will make them ready to compete and thrive in a rapid changing environment. Human capital which is the potential of individuals is going to be the most important long term investment any country can make for its people’s future prosperity and quality of life,” he said.

Sunday INDEPENDENT gathered that this is not the first time Africa especially Nigeria would be advised to invest in human capital development as a means out of poverty which is believed to be eating deep into the country.

According to the Goalkeepers data report released by the Bill and Melinda Gates Foundation, by 2050, more than 40 per cent of the extremely poor people in the world will live in just two countries: Democratic Republic of the Congo and Nigeria.

In order to forestall this, Billionaire philanthropist and Co-founder, Bill and Melinda Gates Foundation, Bill Gates, earlier in the year called on Nigerian leaders to focus more on interventions in the education, health and agricultural sector.

He said most African countries especially Nigeria and DRC need to channel more investment towards health, family planning, agriculture and education as a means of human development as this is the only way in which poverty can be alleviated in the continent.


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