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Buhari’s ‘tougher times’ not new, expected

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President Muhammadu Buhari addressing APC Chieftains after INEC declared him President-elect.

The ‘tougher times’ ahead, as predicted by President Muhammad Buhari after his re-election, is rather a continuum than a fresh caution for Nigerians and the economy, as his first four years were dominated by difficulties, unemployment and low productivity, economic analysts have said.

Besides, his re-election is not inspiring financial market sentiments more than the perceived political stability experienced post-election, especially after the announcement, as most operators are worried that it would be a continuation of difficult policies.

A research by Afrinvest Securities Limited on post-election economic developments, at the weekend, noted that Buhari’s victory presents him a new opportunity to choose between setting the country on the path to prosperity or sustaining poor policy choices with economic consequences of a bleaker growth prospects.

The Head of Investment Research at Afrinvest Securities said Nigeria’s fiscal vulnerabilities, as well as economic structural faults may continue to worsen poverty levels (estimated at 91.3 million people), unemployment and economic growth, which require government’s decisive actions.

He said: “But given the socialist leaning of the current government, would Nigerians have to wait till 2023? The risk factors remain on the horizon and are poised to break the bonds of this tenuous seal. The country remains vulnerable to oil price shocks, as buffers remain weak.

“While crude oil production levels are expected to increase, latent security risks in the Niger-delta region, amid volatile oil prices, could put pressure on government finances. Crude oil receipts pressure would most definitely filter into foreign exchange liquidity risk, which would exert immense pressure on the economy. The issues are rife and seemingly insurmountable, if political expediency remains the first criteria for decision making.”

He noted that government should be raising confidence, not by mere expressions and wishful thinking, but through well thought-out economic plans that are understandable, with clear actions and timelines.

Similarly, the Head of Coronation Research, Guy Czartoryski, agreed that a feature of Mr. President’s first term was weak economic growth, which fell well below trend and into recession in 2016, as dependence and oil price crash put pressure on government revenues, exchange rate, trade account, and Nigeria’s ability to import critical industrial inputs.

While noting that the low growth was associated with rising unemployment, which continued to rise during the weak recovery that followed exit of recession, he said the new mandate presents opportunities to take up economic issues head-on.

For Cyprus-based FXTM research analyst, Lukman Otunuga, now that the Presidential elections are over, the key question on the mind of many investors is what this means for the economy in 2019 and beyond, with the focus turning on Nigeria’s efforts to diversify from oil reliance.

He said lessons from the past should encourage the administration to invest in infrastructure and step up efforts in finding growth from other sustainable sources.

Also, the Head of Research at FSDH Merchant Bank Limited, Ayodele Akinwunmi, said while promises and plans are important, the strategy and implementations will determine the financial market’s response, especially on pending economic and social issues.


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