A recent report released by Fitch Solutions on Nigeria’s country Risk for the third quarter of 2019 reveals Nigeria’s economy will struggle to return to the robust levels of economic growth, witnessed prior to the 2014 collapse in global oil prices, due to the economic policies of the Buhari led Government.
According to the report, the contraction and slow projection in Nigeria’s growth will be driven by Nigeria’s challenging operating environment and back economic policies.
“Over the next 10 years, Nigeria’s economy will struggle to return to the robust levels of real GDP growth recorded prior to the collapse in oil prices. With substantial increases in oil production unlikely, the country will have to develop alternative sectors, but this will likely prove difficult in Nigeria’s challenging operating environment and weak reforms.”
The report details some factors that will be responsible for the likely contracted and slow growth outlook for Nigeria’s economic outlook in the next 10 years. Here are some of the factors highlighted.
Business Unfriendly: The report revealed that there is a low expectation of oil production returning to the level witnessed between 2010-2014 for the next 10 years, and this will pose significant challenges to Nigeria’s economic outlook.
- However, it stated that the unfriendly business environment in Nigeria and the instability of the commodity-dependent economy will keep fixed investment below the levels required to move the country away from its oil dependence.
- According to Fitch report, the victory of incumbent Muhammudu Buhari in the February 2019 elections suggests little scope for structural reform in the years ahead, weighing on the economy’s long-term growth prospects.
- Hence, Nigeria’s economic growth forecast is put at 3.4% per year over the long-term outlook from 2019 to 2028, compared with 6.1% in the 2010-2014 oil boom years.
The report also shows that a combination of low prices and long-term constraints on production suggests that the oil sector will not be the economic driver that it was previously.
- Crude exports have historically accounted for 90.0-95.0% of total merchandise exports and around 70.0% of government revenues.
- While this has led to substantial economic growth in previous years, the outlook over the next decade is far less positive.
- However, it was stated that Nigeria’s economy will struggle to diversify away from its long-standing oil dependence, due to a poor operating environment hindering investment into alternative sectors.
“Given the country’s growing population, the most pressing sectors for the Nigerian economy to diversify into would be those that create significant opportunities for employment, such as agriculture and manufacturing.”
“However, developing these sectors requires substantial surrounding infrastructure, including a reliable power supply and adequate storage and transport links to move to produce to market. Nigeria will find it difficult to attract the level of investment it needs to develop this infrastructure while its operating environment remains such a headwind to businesses.”
Population Upsurge – Often viewed as a highlight of the Nigerian economy, the report ironically viewed Nigeria’s booming population as a time-bomb that will trigger unrest. According to Fitch,
- While Nigeria’s large population should boost growth significantly, in the absence of sufficient employment opportunities there is a substantial risk that the country’s demographic dividend will turn into a demographic time bomb, with potential for the booming population to threaten political stability.
- Meanwhile, it was noted that Nigeria’s large and fast-growing population (expected to reach 251.6 million by 2028) will ensure opportunities are on offer for investors willing to take on substantial risk
- This will see economic activity slowly accelerate from the recession recorded in 2016.
On Corruption: According to Transparency International, Nigeria ranks 144th out of 180 countries in its 2018 Corruption Perceptions Index. According to Fitch,
- With rampant corruption having concentrated wealth in the hands of political elites, the country suffers from significantly unequal wealth distribution and this makes policy implementation difficult.
- Hence, high-level corruption could further a sense of grievance and raises the potential for destabilising protests.
“Nigeria’s business environment is significantly weakened by rampant corruption, burdensome bureaucratic procedures, and a weak legal framework. Financial crimes such as fraud, embezzlement and money-laundering also continue to threaten businesses operating in Nigeria.”
The latest inflation report shows that Nigeria’s inflation rose to 11.40% in May. According to Fitch, while Nigeria’s inflation moderated to an average of 12.2% in 2018, price pressures remain elevated – in part due to continued disruptions of the food supply chains because of instability in key producing areas.
Hence, it was revealed that average inflation will remain above the central bank’s target high of 9.0% until 2022. Thereafter, the inflation rate is expected to fall into high single-digit levels with slow growth in the economy.
Labour set for showdown with FG, rejects plan to reduce salaries
The NLC president demanded an increase in the remunerations and allowances of Nigerian workers.
The Organised Labour appears set for a showdown with the Federal Government as they have condemned and rejected the government’s plan to cut down salaries of Nigerian workers.
This follows the recent statement credited to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, in which she revealed the Federal Government’s plan to reduce the cost of governance by cutting down workers’ salaries.
This disclosure was contained in a statement issued by the President of the Nigeria Labour Congress (NLC), Ayuba Waba, on Wednesday in Abuja, in which he expressed shock and noted that the plan was tantamount to a mass suicide wish for Nigerian workers.
What the NLC President is saying
Waba in his statement said, “The minister also allegedly directed the National Salaries, Incomes and Wages Commission (NSIWC), to immediately review the salaries of civil servants as well as the number of federal agencies in the country.
It is most unthinkable that the government would be contemplating to unilaterally slash the salaries of Nigerian workers at this time.
He added that “The question to ask is which salary is the government planning to slash? It certainly cannot be the meager national minimum wage of N30, 000, which right now cannot even buy a bag of rice.”
The NLC President said that he believed the proposed salary slash was certainly not targeted at the minimum wage and consequential adjustment in salaries that some state governors were still dragging their feet to pay.
He said that the multiple devaluations of the Naira in a short time, and the prevailing high inflation rate in Nigeria had negatively impacted on the salaries earned by Nigerian workers across the board.
He said, “Nigerian workers are only surviving by hair’s breadth. Indeed, Nigerian workers are miracles strutting on two legs.
“It is, therefore, extremely horrendous for a minister of the Federal Republic of Nigeria to pronounce salary slash for Nigerian workers currently. This call for salary slash by Mrs Zainab Ahmed is tantamount to a “mass suicide” wish, for Nigerian workers.”
While demanding an immediate retraction and apology by the Minister of Finance, the NLC president, however, said that if there was any salary that needed serious slashing, it was the humongous remuneration and allowances pocketed by political office holders in Nigeria, who did extraordinarily little but collected so much.
Wabba said, “Workers generate surplus value and revenue for the government. We do not constitute any unnecessary cost or burden to governance. It is also important to make the point that salaries are products of contracts governed by laws. They cannot be unilaterally adjusted.”
This move is not only at great odds with global best responses to the COVID-19 pandemic but also in violation of relevant ILO Conventions and Declarations on Wages and Decent Work. We urge the government as a social partner to quickly respond to the demands by Labour for an upward review of salaries of all Nigerian workers.
Nigerian workers have shown sufficient understanding with the government through the tough patches of the pandemic. Now, Nigerian workers demand reciprocity of our understanding. Nigerian workers demand an increase in their remunerations and allowances.”
Book launch: Built for the Storm by Bridget Oyefeso Odusami
‘Built for the storm’ is a must-have manual for those experiencing any kind of life adversity.
Bridget Oyefeso Odusami launches new book, Built for the Storm. In this book, the author takes us on a journey through the process of pain and healing. Using real-life experiences, she talks about the scars that remain afterwards, and how to live with these scars.
What first catches your attention is the title of the book. It emphasises the importance of a name – her name, “Bridget” is an Irish name which means the “Enduring one” – a recurring theme in her story. Bridget was named strong and so was her book. The book takes us through how to change your point of view when life seems hopeless and figure out what you can do to make everything better and find happiness.
‘Built for the storm’ is the ultimate game-changer. Step-by-step, readers are empowered and encouraged so that you can turn any setback into a major comeback while understanding that in life, there are times, seasons and reasons.
In this inspirational, but practical self-help book for women and men, Bridget Oyefeso-Odusami talks at length about her husband’s illness and how she copes. Bridget talks about several issues that pop up when the unexpected happens. She talks about her realisation that in caring for the sick, she herself needs help, needs healing to crawl back to life; to show up despite it all.
Bridget is also conscious of the fact that other ears are tuned to her musings and are likely to glean a few truths from her journey; so she uses anecdotes, analogies, even Bible verses and stories to season her musings. She uses her scars and their reminders to tell us about life, about love, about being a wife, a mother, a career woman and one determined to be herself regardless of her circumstances.
Built for the storm is a must-have manual for those experiencing any kind of life adversity. The book tells the story of how love is sweet but can be painful; love forgives, love keeps “no records of wrongs” but more importantly, love grows and when it is rooted in abiding faith, it blossoms like a rose among thorns.
Built for the storm comes to us during a time of deep unrest, a time when our empathy for others is so needed to guide the choices we will make. This book will open hearts. It teaches readers how to shift their mindset and do the internal work to discover the divine purpose of obstacles and how to position them to become their stepping stool for success. You can overcome any adversity and land back on top! There is a reason that you are still alive. You were built for the storm.
Built for the Storm is a searing and pain-filled musing on what can happen when life throws you a curveball. It is a simplified workbook and a sobering reminder that our life can seem no more than a lottery and winning or losing is often up to chance and fate and God, if you believe in him. And for those who believe in God, this is a book that will strengthen your faith and also try your faith beyond measure. This book will stir emotions in you that you did not realize you were capable of. This book will test your faith then make it strong.
This book is about hurt and healing, adversity and resilience as well as grace under pressure. ‘Wound’ appears 24 times, ‘wounded’ appears 9 times while ‘wounds’ is used 9 times. Reading through, what becomes increasingly obvious is that Bridget has taken vicious blows from life and has been wounded over and over again but through prayer and faith and the kindness of friends and strangers as well as a huge support system she has healed but the scars remain.
That is a summation of the most important lesson from this sobering and beautiful book; scars can be beautiful things and we need not be ashamed of them. Built for the Storm illuminates God’s faithfulness in the life of the author as He orchestrates times and seasons amidst the storms, setting people and situations in place to help her journey towards healing and purpose. Like a line in the book says, “this isn’t where your story ends… Seasons come, seasons go but God is constant.”
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- 2021 Q1 Results: FTN Cocoa Processor Plc reports loss after tax of N162.21 million
- Tantalizers Plc reports a loss after tax of N97.75 million in FY 2020 in Q1 2021.
- Courteville Business Solutions Plc proposes final dividend of 3 kobo per share for FY 2020.
- 2020 FY Results: UPDC Real Estate Investment Trust records over 500% growth in Profit after tax.
- Sovereign Trust Insurance records a 43% surge in profit after tax to N392.1 million in Q1 2021.