2018 Nigerian Economic Summit Holds October 22
By Dipo Olowookere
October 22 and 23, 2018 have been fixed for this year’s Nigerian Economic Summit (NES 24) taking place in Abuja.
Addressing newsmen on Tuesday, Minister of Budget and National Planning, Mr Udo Udoma, disclosed that this year’s event will focus on good governance as a path to sustainable human and economic development, tilting towards the Economic Recovery and Growth Plan (ERGP) of the federal government.
According to him, the ‘Poverty to Prosperity: Making Governance and Institutions to Work’ theme for 201 NES 24 is structured along five key thematic areas of corruption and rule of law: effective public institutions; sustainable economic opportunities; human development and; participation and citizens’ rights.
Mr Udoma said this present administration has sustained the fight against corruption and security has also been enhanced across the country to tackle all forms of criminal activities including kidnapping and terrorism; while reforms have been introduced to reduce the cost of governance, promote transparency in the management of public resources, block leakages, raise productivity and ensure value for money.
Others include efforts at moving the people from poverty to prosperity, creating employment and empowerment opportunities, combating hunger, improving health and educational infrastructure, enhancing transport and power infrastructure, among others, the Minister said this year’s gathering is designed to accelerate progress towards the implementation of the governance component of the ERGP.
“The ultimate goal is to stimulate discussions on accelerating implementation of ERGP strategies on governance in order to enhance the social welfare of the Nigerian people,” he stated.
The Minister was particularly pleased that the Startup Pitching Events which was introduced into the Summit programme last year to connect startups registered in Nigeria, as a platform for creating and expanding opportunities in the country, is already gaining traction.
“I am pleased to note that more than 745 startups have already submitted their applications through the applications portal which was opened on the 1st of August, 2018. Eight selected startups will be invited to pitch in front of venture capitalists and angel investors,” he revealed.
He was confident that this year’s Summit will present a good opportunity for discussion among leaders and citizens to deepen civic engagement on how to accelerate the achievement of the governance component of the ERGP.
Recalling the theme of last year’s Summit, ‘Opportunities, Productivity and Employment: Actualizing the Economic Recovery and Growth Plan,’ the Minister said that Summit was out to get stakeholder commitment to the structural and fiscal changes required to link policy to economic opportunities, skills and competencies that deliver them so as to achieve the aims of the ERGP.
The outcome of that Summit, according to him, inspired the focus of this year’s outing, noting that government has continued to implement the various strategies outlined in the ERGP and the outcomes of the Economic Summits towards enhancing good governance and strengthening of institutions; the results of which he said are encouraging.
Chief Executive Officer of the Nigerian Economic Summit Group (NESG), Mr ‘Laoye Jaiyeola, expressed the appreciation to the federal government for the collaboration that has seen the hosting of the Summit for the past 24 years.
The Nigerian Economic Summit is organized annually by the Nigerian Economic Summit Group (NESG) in collaboration with the Federal Government of Nigeria, represented by the Ministry of Budget and National Planning. It is a forum for dialogue amongst top policymakers and corporate leaders.
It brings together government officials, representatives of the private sector, development partners, the civil society and some members of academia to reflect on issues constraining Nigeria’s national development, with the aim of building consensus so as to evolve common strategies and policy frameworks for addressing the issues.
Stock Market Gains N1.5trn After Tinubu Vows to Jump-Start Economy
By Dipo Olowookere
The first trading session on the floor of the Nigerian Exchange (NGX) Limited after the inauguration of Mr Bola Tinubu as the new President of Nigeria closed higher by 5.22 per cent on Tuesday.
Yesterday, the stock market did not open its doors to investors due to the public holiday declared by the federal government for the inauguration of the country’s 16th President.
During his inaugural speech, Mr Tinubu promised to make the business environment friendly to investors, stating that he would ensure a minimum of 6 per cent economic growth, unify the exchange rate regimes, address multiple taxes, improve the electricity supply, and others.
These assurances touched the right places and spurred stock investors to buy up some equities in anticipation of good times ahead.
It was observed that most of the sectors of the bourse leapt to levels last seen in years, as the banking space rose by 8.20 per cent. The consumer goods improved by 6.48 per cent, the industrial goods sector appreciated by 6.08 per cent, the energy index increased by 4.04 per cent, and the insurance counter grew by 2.29 per cent.
Consequently, the All-Share Index (ASI) jumped by 2,764.47 to 55,738.35 points from 52,973.88 points, and the market capitalisation rose by N1.495 trillion to N30.340 trillion from N28.845 trillion.
Business Post reports that 64 equities appreciated in price at the close of business today, and 12 shares ended on the losers’ table, indicating a very strong investor sentiment boosted by a positive market breadth index.
The strong demand for stocks on Tuesday pushed the prices of Deap Capital, FCMB, Nigerian Breweries, Jaiz Bank and Eterna higher by 10.00 per cent to 22 Kobo, N4.62, N42.35, N1.10, and N7.70, respectively.
On the flip side, Ikeja Hotel lost 10.00 per cent to trade at N2.16, NCR Nigeria depreciated by 9.80 per cent to N2.76, Tantalizers fell by 8.00 per cent to 23 Kobo, International Energy Insurance went down by 6.98 per cent to N1.20, and Consolidated Hallmark Insurance depleted by 6.56 per cent to 57 Kobo.
The most active stock of the trading session was Access Holdings, transacting 199.6 million units valued at 2.5 billion, FBN Holdings traded 127.9 million units worth 1.8 billion, Transcorp sold 95.7 million units worth N309.2 million, UBA exchanged 82.0 million units valued at N831.5 million, and GTCO transacted 76.4 million units worth N2.2 billion.
Data showed that a total of 1.1 billion stocks worth N15.8 billion exchanged hands in 9,916 deals on Tuesday compared with the 461.8 million stocks valued at N7.7 billion traded in 6,520 deals last Friday, implying an increase in the trading volume, value and number of deals by 133.49 per cent, 105.20 per cent, and 52.09 per cent, respectively.
Adesina Tasks Tinubu on Fiscal Stability
By Adedapo Adesanya
The president of the African Development Bank (AfDB), Mr Akinwumi Adesina, has tasked President Bola Tinubu to reduce the high cost of governance and ensure fiscal stability.
He made the disclosure during his speech at the Inauguration Lecture for the New President of Nigeria on May 27, 2023, in Abuja, noting that, “The starting point must be macroeconomic and fiscal stability. Unless the economy is revived and fiscal challenges addressed boldly, resources to develop will not be there.”
He noted that Nigeria currently faces huge fiscal deficits, estimated at 6 per cent of the Gross Domestic Product (GDP).
“This has been due to huge federal and state government expenditures, lower receipts due to dwindling revenues from crude oil export, vandalism of pipelines, and illegal bunkering of crude oil.
“According to Nigeria’s Debt Management Office, Nigeria now spends 96 per cent of its revenue servicing debt, with the debt-to-revenue ratio rising from 83.2 per cent in 2021 to 96.3 per cent by 2022.
“Some will argue that the debt to GDP ratio at 34 per cent is still low compared to other countries in Africa, which is correct, but no one pays their debt using GDP.
“Debt is paid using revenue, and Nigeria’s revenues have been declining,” he warned.
He lamented that Nigeria now earns revenue to service debt—not to grow, and advised the government to remove the inefficient fuel subsidies, a decision he adhered to on Monday.
In his words, “Nigeria’s fuel subsidies benefit the rich, not the poor, fuelling their and government’s endless fleets of cars at the expense of the poor. Estimates show that the poorest 40 per cent of the population consume just 3 per cent of petrol.
“Fuel subsidies are killing the Nigerian economy, costing Nigeria $10 billion alone in 2022. That means Nigeria is borrowing what it does not have to if it simply eliminates the subsidies and uses the resources well for its national development.”
He advised that rather support should be given to private sector refineries and modular refineries to allow for efficiency and competitiveness to drive down fuel pump prices.
“The newly commissioned Dangote Refinery by President Buhari—the largest single train petroleum refinery in the world, as well as its Petrochemical Complex—will revolutionize Nigeria’s economy,” he announced.
The former Nigerian minister of agriculture also said the country must urgently look at the cost of governance.
“The cost of governance in Nigeria is way too high and should be drastically reduced to free up more resources for development. Nigeria is spending very little on development.
“Nigeria is ranked among countries with the lowest human development index in the world, with a rank of 167 among 174 countries globally, according to the World Bank 2022 Public Expenditure Review report.
“To meet Nigeria’s massive infrastructure needs, according to the report, will require $3 trillion by 2050. According to the report, at the current rate, it would take Nigeria 300 years to provide its minimum level of infrastructure needed for development.
“All living Nigerians today, and many generations to come, will be long gone by then! We must change this. Nigeria must rely more on the private sector for infrastructure development to reduce fiscal burdens on the government,” he hammered.
He also tasked the Tinubu administration to raise tax revenue, as the tax-to-GDP ratio is still low.
“This must include improving tax collection, tax administration, moving from tax exemption to tax redemption, ensuring that multinational companies pay appropriate royalties and taxes and that leakages in tax collection are closed.”
However, he noted that simply raising taxes is not enough, “as many question the value of paying taxes, hence the high level of tax avoidance. Many citizens provide their own electricity, sink boreholes to get access to water, and repair roads in their towns and neighbourhoods.”
“These are essentially high implicit taxes. Nigerians, therefore, pay the highest ‘implicit tax rates’ in the world.
“Governments need to assure effective social contracts by delivering quality public services. It is not the amount collected, it is how it is spent and what is delivered. Nations that grow better run effective governments that assure social contracts with their citizens,” he added.
Nigeria’s Dollar Bonds Rise After Tinubu Inauguration
By Adedapo Adesanya
Nigeria’s dollar bonds rallied after President Bola Tinubu was officially conferred as the 16th president of Nigeria, a day that he announced plans to scrap the fuel subsidy programme, unify the exchange rate regime, as well as reduce high interest rates.
Bonds with a maturity date of 2047 jumped 3.3 per cent to 66.750 cents on the Dollar.
The debt instrument due in 2049 gained 2.9 per cent, and those maturing in 2051 advanced 3.5 per cent.
The gains came as markets in London and the US reopened following national holidays as well as a day after Mr Tinubu’s speech at his inauguration on Monday.
On fuel subsidy, Mr Tinubu said, “Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime, which has increasingly favoured the rich more than the poor.”
He said that since there was no provision for subsidy in the budget from July 1, noting that the policy would be removed.
He also planned to bring Nigeria into a unilateral exchange rate regime to help staunch the continued FX crisis that has gripped investors and average Nigerians.
“The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy,” he said.
He also assured both local and foreign investors that his administration would move to reduce the high interest rate that has stymied faith in Nigeria being a destination for good investments.
“Interest rates need to be reduced to increase investment and consumer purchasing in ways that sustain the economy at a higher level,” Mr Tinubu said.
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