President Muhammadu Buhari was seemingly dealt a bad deck in his first term, with the economy sliding into recession. This in turn triggered a foreign exchange crisis, which led to a sharp devaluation, after several demand management measures failed.
Many listed firms on the exchange suffered a double whammy: difficulty in accessing foreign exchange, and hampered consumer spending.
This time, things are much better, though the market has done poorly this year due to the first elections held in the first quarter, and global trade tensions.
The President will today be sworn in for his second and final term at the Eagle Square, Abuja. The election was a keenly contested one (with his main opponent Atiku Abubakar challenging the results in court).
As is typical, business activities slowed down in the first quarter of the year, with several parties adopting a wait and look posture. One hopes, that from today, it’s back to business.
Here are four key points, that may boost activities in the capital market, if implemented by the Buhari administration.
Appoint a board for the Securities and Exchange Commission
It is shameful that the Securities and Exchange Commission (SEC) has been without a board for the last four years. Key decisions required to move the market forward have thus been kept in abeyance. Beyond merely using board appointments as “rewards for the boys and girls,” the President must go further by placing round pegs in round holes.
Fast forward the privatization programme
The privatization programme has largely slowed in President Buhari’s first term. The snail pace is even more surprising considering the private sector antecedents of Vice President Yemi Osinbajo.
In their second term, the Buhari administration needs to fast forward the privatization of state owned enterprises and have them listed on the Nigerian Stock Exchange (NSE). Only one of such firms (Skyway Aviation Handling Company (SAHCO) was listed sometime this year.
Listing FG’s share of Joint Venture Oil Assets
In what seems to be a largely ceremonial activity, the Federal Government has once more mandated the Nigerian National Petroleum Corporation (NNPC) to sell down its stake in joint venture oil assets to 40% this year.
NNPC owns a 55 percent stake in its joint venture with Royal Dutch Shell, and 60 percent stakes in others.
While one hopes, that the corporation will for once walk the talk, the government can use this as an opportunity to deepen the stock market by listing on the NSE.
The Nigerian Stock Exchange (NSE) is in dire need of big ticket listings. MTN Nigeria and Dangote Cement account for roughly 30% of the market capitalization.
A clearer macro environment
Above all, the government must articulate a clearer macroeconomic policy. Reforms must be driven at a faster pace and institutionalized.
Despite the seeming lethargy, there have been a few positive moves. President Muhammadu Buhari signed the requisite laws enabling the demutualization of the Nigerian Stock Exchange (NSE).
Demutualization is the process by which an exchange is converted from a company owned by members or brokers, to one in which members of the public can buy shares.
Having led the country for four years as a civilian, President Buhari must hit the ground running. It would be a shame if the President has to wait for several months to appoint members of his cabinet.
GDP numbers for the first quarter of 2019, came in at 2.01%. While a slight improvement on a year on year basis, (2018 Q1 GDP growth was 1.89%), on a quarterly basis, they show a slow down compared to the 2.38% growth recorded in Q4 2018. If the Buhari administration does not get its acts faster this time, growth may slow even further.
Buhari in crucial meeting with Obasanjo, other former heads of state
President Buhari is presiding over a National Security Council meeting with some former heads of state and some security chiefs.
President Muhammadu Buhari is currently presiding over a National Security Council meeting with some former heads of state and some security chiefs.
Although the agenda of the meeting is not made public, issues bothering on the current security situation in the country are believed to top the agenda. This follows the outbreak of violence across the country during the protest against police brutality and extra-judicial killings, which has led to the loss of lives and destruction of public assets and private properties.
According to media reports, the meeting which is coordinated from the Council Chamber of the Presidential Villa, Abuja, has in virtual attendance General Yakubu Gowon (rtd.), former President Olusegun Obasanjo, Gen Abdulsalami Abubakar (rtd.), former President Goodluck Jonathan and former head of interim national government, Chief Ernest Shonekan.
Others who are physically present at the council chambers are Vice President Yemi Osinbajo; National Security Adviser, Major General Babagana Monguno (rtd.); Chief of Defence Staff, General Gabriel Olanisakin; Inspector-General of Police, Mohammed Adamu; Director-General, Department of State Services, Yusuf Bichi; and Director-General, National Intelligence Agency, Ahmed Rufai, among others are attending with the President.
This meeting is coming a day after President Buhari’s national broadcast on the security situation in the country calling for an end to the #EndSARS protests as their voices have been loudly heard.
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Senatorial, State House of Assembly bye-elections postponed – INEC
Senatorial and State House of Assembly bye-elections slated to hold on October 31 in 11 states have been postponed by INEC.
The 6 Senatorial and 9 State House of Assembly bye-elections slated to hold on October 31 in 11 states of the Federation has been postponed by the Independent National Electoral Commission (INEC). The vacancies were as a result of death and resignation of previous members.
According to the statement issued by its National Commissioner & Chairman, Information and Voter Education, Festus Okoye Esq., INEC said the decision was taken after meeting with the 37 Resident Electoral Commissioners (RECs) on Thursday.
— INEC Nigeria (@inecnigeria) October 22, 2020
Though the commission did not categorically state the reason for the postponement, feelers are that it may not be unconnected with the raging #EndSARS protests across the nation.
Some Nigerians mistook promptness of FG response as sign of weakness – Buhari
President Buhari has said that FG’s promptness to consent to the demands of the protesters was taken as a sign of weakness.
President Muhammadu Buhari has pointed out that the promptness with which the Federal Government acted in meeting the demands of the #EndSARS protesters seemed to have been misconstrued as a sign of weakness and twisted by some for their selfish unpatriotic interests.
This was disclosed by the president in his national broadcast on Thursday, October 22, 2020, on the current widespread violence which has engulfed the country following the protest against police brutality and extrajudicial killings.
The president said that the government listened to the protesters and after evaluating their five-point demands, they were accepted and some of them implemented, which includes the disbandment of SARS.
In his address to Nigerians, President Buhari said, “As a democratic government, we listened to, and carefully evaluated the five-point demands of the protesters. And, having accepted them, we immediately scrapped SARS and put measures in place to address the other demands of our youth.
“On approving the termination of SARS, I already made it clear that it was in line with our commitment to the implementation of extensive Police reforms.
“Sadly, the promptness with which we have acted seemed to have been misconstrued as a sign of weakness and twisted by some for their selfish unpatriotic interests.
The president said the actions of these elements has caused serious violence which has led to the loss of human lives, attack on correctional facilities, destruction and vandalization of public and private properties, attack on the palace of Oba of Lagos, invasion of International Airport and so on.
While acknowledging that the choice to demonstrate peacefully is a fundamental right of every citizen as enshrined in the constitution, the president pointed out that this right to protest also imposes on the demonstrators the responsibility to respect the rights of other citizens and the necessity to operate within the law.