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All eyes on monetary and fiscal managers


Photographer: George Osodi/Bloomberg

Despite the apprehension hovering over the political terrain on account of the forthcoming general elections in Febriary, Year 2019 has ushered in a lot of expectations for better fortunes, given the doldrums, misses and near-successes that characterised 2018.

Analysts are hopeful that the economic managers through better monetary and fiscal policies would be able to sustain inflow and outflow of activities notwithstanding the environment upheavals and still be able to sustain growth and attract the requisite investments.

In retrospect, various issues across sectors actually shaped the economy in the out gone year, even as every segment felt the pinch as captured below:

Budget delay
Year in, year out, not only does the economy suffer from undue delay of the passage of the Appropriation Bills, eventual executions of the Acts are almost always below average.


Indeed, the national budgets have received some of the worst criticisms under the Buhari administration given its rift with the legislative arm, and the 2018 budget in particular got more than its fair share of bashing. The budget was delayed, the longest in history, and was only passed into law in May.

It became operational in June, just in time to prevent a government shutdown. Unlike the previous sessions, the National Assembly traded words with the executive over the failure of the Ministries, Departments and Agencies (MDAs) to defend the budget before the Committees of the Senate and the House of Representatives.

Initially, it looked like the usual blackmail from the lawmakers but when the situation got clarified, the Presidency had to issue orders to the MDAs to ensure their budget defense at the National Assembly. It was the first time such would be happening since the restart of democracy in 1999.

In 2019, besides being an election year, the foundation appeared also to have been laid for another round of budgetary delay. First, the Medium Term Expenditure Framework (MTEF) submitted to the lawmakers in November, was not passed until December 19, when the lawmakers eventually received the 2019 budget, they proceeded on recess.

That recess would last till mid-January 2019, when electioneering campaigns for the Presidential and National Assembly elections would be at the head.

Resurgence of high debts
The economy faced a record debt profile of N22.43 trillion ($73.213 billion) as at September 30, according to the Debt Management Office (DMO), which for analysts mostly assumed a more disproportionate weight against Nigeria’s growth, as the cost of servicing them leaves nothing for development initiatives, a situation that would dispose the country to perpetual borrowing.

While government claims huge investment in infrastructure, the challenges facing the real sector operators still remain, with financial service providers citing the same environmental risk factors, leaving many to doubt the authenticity of the claims.

The country’s dependence on oil sector offerings as major revenue earner and “sneezes” at every turn of event in the industry continues to betray claims of diversification, whilst 2018 ushers the economy into another brand of headwinds this year, courtesy of oil prices.

CBN increased items on Prohibition list
To further sanitise the foreign exchange market, the regulator, Central Bank of Nigeria (CBN), on December 10, made good its threat and increased items on the prohibition list to 42, with the addition of fertilizer, to raise local production of the product and save the foreign exchange expended on importation.

CBN Governor, Godwin Emefiele, had at the 2018 Bankers Dinner in Lagos, hinted of the move to increase the prohibition list, and warned that it would collaborate with the Economic and Financial Crimes Commission (EFCC) in investigating abuses, with sanctions in view.

The policy, which has been backdated to December 7, according to the apex bank, was also in continuation of efforts to sustain the achievement recorded from the classification of the 41 import items that are “not valid for foreign exchange” in the country’s foreign exchange market.

Banks’ takeover
In September, the licence for Skye Bank Plc was revoked and became Polaris Bank Limited as one of the latest distressed financial institutions in the country, under the direct intervention of the CBN and Nigerian Deposit Insurance Corporation (NDIC), but managed by the Asset Management Corporation of Nigeria (AMCON).

In the takeover, a fresh N786 billion soft and long-term financing at single digit interest rate was injected to keep the operations ongoing and rejuvenated.

Emefiele said the result of examinations and forensic audit of the bank revealed that it required urgent recapitalisation and could no longer continue to live on borrowed times with indefinite liquidity support from the apex bank, which the shareholders were unable to provide.

He said even if AMCON could not find new investors for the bank before 2024, the bank would continue to be under CBN’s management, being the major stakeholder in AMCON.

Similarly, after months of speculations, Diamond Bank Plc and Access Bank Plc finally admitted to merger talks that will transform the banks into the biggest financial institution in Nigeria and sub-Sahara Africa

While many believed the move was to bail Diamond Bank out of its current liquidity challenges, Access Bank insisted that the merger was for mutual benefits.

Nigeria marked as poverty capital
Perhaps the most significant situation that indicated that although out of recession, the Nigerian economy was still in the woods was the ranking of the country as the poverty capital of the world. The Brookings Institution, a Washington-based economic think-tank, had in October published a report of its latest projections, stating that Nigeria had overtaken India as the country with the largest number of extremely poor people.

The Brookings report suggested that Nigeria had about 87 million people in extreme poverty by May 2018 compared to India’s 73 million. The report corroborated that of the National Bureau of Statistics which in 2016 reported that no fewer than 112 million Nigerians live below the poverty line.


The latest projection casts doubt on the ability of Nigeria to meet the United Nations’ Sustainable Development Goal (SDG) to end extreme poverty by 2030. The report also affirmed the failure of government over the years to provide employment and lift out its citizens out of extreme poverty.

Buhari failed to assent PIGB
It’s no secret that the Nigerian economy is dependent on petro-dollar, yet it became a big surprise President Muhammadu Buhari withheld assent to the harmonised Petroleum Industry Governance Bill (PIGB), which sought to sanitise operations in the oil and gas sector.

The presidential aide on National Assembly Matters, Ita Enang, said the decision was for constitutional and legal reasons. The Senate had on June 8, 2018 sent to the President for final assent into law the harmonised draft Bill earlier approved by the House of Representatives in January.

But, the President declined assent to the draft law initiated to update the outdated Petroleum Act, and replace its provisions with a more comprehensive and current legal framework that aligned with global standards.

Going forward, international oil companies (IOCs) and some indigenous layers say the continued delay in passage of the Petroleum Industry Bill will continue to create uncertainties in the sector. The uncertainties, they noted, would delay the take off of fresh projects worth several billion of dollars that would grow industry capacity and reserves.

Nigeria surpassed broadband target
It may not be all thumbs down for the economy, as news broke in November that contrary to speculations, Nigeria had surpassed the 30 per cent broadband target by nine per cent. As at the period under review, there were 58,965,478 active broadband subscriptions on 3G and 4G platforms.

The country with active mobile subscriptions hitting 169 million in November, recorded 120 per cent teledensity.

The National Bureau of Statistics puts the contributions of telecommunications and information services to GDP from Q1 to Q3, 2018 at N4.7 Trillion. It however, put the Q3 figure at N1.5 Trillion.

But earlier in August, the CBN had demanded the refund of $8.1 billion from South Africa’s telecommunications firm, MTN in arrears of Certificate of Capital Importation (CCI) that the service provider failed to remit as and when due.

While that matter raged on, the Office of the Attorney-General of the Federation also came out to demand $2 billion tax arrears from the embattled telecommunications firm. After a long battle, which also involved the court, news filtered in December that the matter has been settled but MTN would need to pay $53 million (N19 billion).

Nigeria Air

Suspension of Nigeria Air
In July, the Federal Government through the Minister of State for Aviation, Senator Hadi Sirika, unveiled the branding for a new national carrier to be called Nigeria Air at a news conference during the Farnborough Air Show in London, and said the airline would be inaugurated before 2018 end.

The minister had stated that they obtained a Certificate of Compliance from the Nigerian Infrastructure Concession Regulatory Commission, adding that the branding and naming of the national carrier came after a social media campaign was undertaken by his ministry.

But in September, the minister also announced the cancellation of the project, owing to some yet to be revealed matters. The cancellation, according to him, was because the Economic Management Team (EMT), chaired by Vice President Yemi Osinbajo did not approve it when it was launched.


The cancellation announcement came barely two months after it was unveiled on July 18. But the Minister of Information and Culture, Lai Mohammed had disclosed that Nigeria Air was suspended due to investor’s apathy, adding that investors who were supposed to partner with the government on the project backed out.

Belaboured minimum wage
It was an avalanche of strikes among the workers’ unions in various sub-sectors. In September, the Nigeria Labour Congress (NLC), and Trade Union Congress (TUC), declared an indefinite nationwide warning strike to demand for increase of the monthly minimum wage from N18, 000. Another strike called by the unions was aborted after government invited them for a meeting, which ultimately yielded no concrete results.

The workers originally demanded an increase to about N50,000, but while the Federal Government appears willing to pay N30,000, the states have indicated their helplessness to do so due to paucity of funds, insisting on reducing their staff strength if they must pay.

The report of the joint negotiation committee is yet to be presented to the National Assembly for enactment into law for a new wage to take effect.

And since it was not factored into next year’s Appropriation Bill before the National Assembly, there are fears that the issue would continue to linger, even as a national strike looms early this year.

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