Below is an excerpt of Money Master Class series by Tunji Andrews. Money Master Class is conducted every saturday my Tunji on twitter. You can follow his handle @TunjiAndrews or the hashtag #MoneyMasterClass. Topiv for the day was…Business Opportunities in APC’s policy direction
Hi guys, today’s class #MoneyMasterClass on Business Opportunities in APC’s policy direction would be based on an economic outlook
1. What I essentially mean is that i would be giving alot of economic indices as my basis for the assumptions herein
2. But, before that, i would quickly want to give my economic forecasts for the 2nd half of the year, as some have asked
3. Now, these are things that would happen irrespective of who was sworn in yesterday, based on the current realities
4. I expect that there would be increased foreign and domestic borrowing by government to fund budget deficit.
5. I also expect some states to continue to struggle with financial obligations, as FAAC allocations and ECA reduces
6. Despite capital controls, oil prices/glut, oil theft & low gross reserves would likely see another Naira devaluation
7. With this in mind, and current fuel crisis, i have revised my inflation expectations & expect double digits this year
8. I see the NSE improving over the H2 following the successful handover, hopefully PMB can speak clearity to this
9. Tight Monetary stance by MPC + international indices will continue to push Nigeria’s fixed income yields up
10. Now, on to the APC
This transition is Nigeria essentially moving from
Right of center
to
Left of center
11. While both are somewhat conservative, focus has changed from a capitalist/liberal form of govt to a welfare-ist govt
12. So while the mantra is anti-corruption, key focus is on job creation, welfare and elimination of inefficiencies
13. The big question really is how efficiently can the new government operate on an existing budget?
14. To create 3m jobs per year through industrialisation(Via Agriculture), public works and agricultural expansion
15. I hear that support to peasant farming will be at the core of this, with the hope of growing them to mechanized levels
16. I hear that support to peasant farming will be at the core of this, with the hope of growing them to mechanized levels
17. We can’t all be farmers, but we can plug into the value chain transport, storage, pesticide services, finance, etc
18. I see the value chain being far more profitable than the core business of farming, especially with an intent to export
19. Healthcare: Increase federal spending from 5.5% to 20%. And before you say you’re not a doctor
Think value chain
20. Medical supplies, sanitary services, real estate, labour outsourcing, etc. If you’re already in the service sector
21. Education: Spending to increase from 8.5% to 24.5%; free daily school meals; PPPs for schools; free education
22. To start with, this means more books and school supplies will be needed. More uniforms, More teachers, more apps
23. But this also opens up the feeding value chain. In my days Samco held my primary school down with milk supplies
24. The PPP also opens up investment opportunities for private and institutional investors, looking to invest in education
25. Housing & Urban Renewal: Reform land ownership, National Housing Policy, 1m new houses a year
26. Apart from the fact that it gives hope to more Nigerians owning homes, the real estate value chain is up to make cash
27. Tackle Poverty: Via Social Insurance Schemes and welfare payments to 25m people on N5k/month comes to N125bn/month
28.The govt obviously have these 25m people to line up to be paid cash N125bn/month & N1.5trn/year
29. This is where the likes of Paga and all other such transactional services providers, should lean up
30. These are the obvious areas, next week we’ll look at
Transportation
Taxation
Power Sector Reform Review
etc
31. However, before then, any questions?
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