With a budget bill of N4.987 trillion pending at the National Assembly, coupled with the early appearance of some positive macro economic twinklers in the horizon at the twilight of 2012, there was no doubt that many Nigerians had hoped for a smoother outer for the country’s economy in 2013.

They had probably reckoned with a rising international crude oil price that would expand Excess Crude savings following the stretching of the Executive’s recommended benchmark price from $75 per barrel to $79 per barrel by the National Assembly.

In their outlook for 2013, Nigerians had hoped that the issue of production losses resulting from oil theft and pipeline vandalism would be tackled to a very reassuring level.

All these did not happen. Again, nobody foresaw the global economic effects of a temporary government shutdown in the United States based on bipartisan bickering over the raising of Washington’s borrowing limits.

The overall effect of these and other unforeseen factors was a frightening drop of Nigeria’s Excess Crude Account from about $11.5 billion at the end of 2012 to less than $5 billion in mid-November 2013.

Even so, the International Monetary Fund (IMF) wants Nigerians to believe that the country’s economy performed strongly in the preceding year. Part of a statement issued by Gene Leon, the Fund’s senior resident representative in Nigeria, at the end of a recent visit of IMF officials to the country read as follows:

“Nigeria’s economy has continued to perform strongly in 2013. Real GDP grew by 6.8 per cent in the third quarter of 2013 (compared to third quarter 2012), supported by robust performances in agriculture, service and trade. Oil theft/production losses have adversely impacted export receipts and government revenues, leading to a significant drawdown from the Excess Crude Account. Inflation declined to 7.8 per cent (end-September 2013) from 12 per cent at end 2012, in part owing to lower food prices and monetary policy implemented by the Central Bank of Nigeria (CBN). The exchange rate has been stable, and the banking sector is well capitalised with low levels of non-performing loans…”

It is convenient to classify Nigeria among the world’s fastest growing economies, especially with a gross domestic product (GDP) that is increasingly being driven by the non-oil sector and still targeting 7.5 per cent in 2014. But while a sector-by-sector review of major economic events in 2013 may not alter the figures, it will certainly reveal that there were also some hard knocks here and there.

Agriculture

Nigerians stepped into 2013 with large portions of their farmland still recovered by the massive flood of 2012. Even up to March, water was yet to fully recede from the alluvial banks of some major rivers in the country. Nor had the affected farmers returned from their various refugee camps to fully engage in any meaningful farming activities.

Not much was also heard about the Federal Government’s plan to distribute flood-resistant seeds and the controversial 10 million mobile phones to farmers across the country.

The Nigeria Incentive-based Risk sharing System for Agricultural Lending (NIRSAL) continued to thrive on paper just like its precursor, the Agricultural Credit Guarantee Scheme (ACGS). Banks have consistently refused to finance local farmers in spite of the Central Bank of Nigeria (CBN’s) readiness to underwrite such funds in the event of payment defaults.

The only cheering news from this sector came in the form of some major investments in fertilizer production by companies like Dangote Group, Indorama Eleme Petrochemicals and Notore Chemicals.

Insecurity in the country, especially the Boko Haram insurgency in the North, impacted negatively on the distribution of farm produce. The high cost of some farm produce like yams, cereals, vegetable fruits and livestock was attributed to this ugly development.

Banking/Financial Services

The banking sector remained stable all through the year as the CBN expanded its cashless policy beyond Lagos and Abuja to five states, including Abia, Anambra, Kano, Ogun and Rivers States.

One discovery in the year that was capable of causing panic among the banking public was the finding that 70 per cent of the sector was being controlled by the five biggest banks in terms of asset base and profit earnings. These are First Bank, Zenith Bank, UBA, Access Bank and GTBank.

The N100 Automated Teller Machine (ATM) charge for every interbank withdrawal was abolished during the year, likewise the N10 per SMS charge which was reduced to N4.00 even as complaints abound that the deposit money banks (DMBs) have introduced other hidden charges to augument.

ATM users were also known to have expressed their year-round frustrations with the cash dispensers. In fact, matters got to a head during the Yuletide as customers wandered in their droves from one bank branch to the other searching for functional machines. Of course, this led to overcrowded banking halls in some cities and created room for banks to surcharge those taking cash below the stipulated minimum over-the-counter withdrawals (mostly N20,000).

The CBN also directed that banks increased their cash reserve ratio (CRR) from 12 per cent to 50 per cent, drawing mainly from the balances of government ministries, departments and agencies (MDAs) as a way of mopping up the huge pile of idle funds domiciled with the banks. Apart from this monetary tightening measure, the apex bank had ensured macroeconomic stability by retaining the other monetary policy rates. It had held interest rate at 12 per cent, inflation rate at 7.8 per cent, cash reserve ratio at 12 per cent (except for public funds) and foreign exchange rate at around N157/dollar.

The Asset Management Corporation of Nigeria (AMCON) was not able to conclude the sale of any of the three nationalized banks in spite of claims of growing foreign investors’ interests in the banks. The banks are Mainstreet Bank (formerly Afribank), Keystone Bank (Bank PHB) and Enterprise Bank (Spring Bank).

The Capital Market

The 2013 Federal Government budget was not meant to benefit the Securities and Exchange Commission (SEC) following the refusal of the House of Representatives to approve allocations to the commission on account of its call for the Director General, MS Arunma Oteh, to resign for what the discerning public saw as a veiled vendetta for her attempt to disparage an honourable member of the hallowed chamber.

As indicated by the commission, this unwarranted punishment would naturally affect its demutualization programme for the Nigerian Stock Exchange (NSE) while also hampering the payment of staff salaries and benefits.

Nevertheless, capital market activities were reported to have witnessed an upswing due mainly to improved earnings and investor confidence in the ability of the CBN and other macro-economic managers, coupled with the substantial inflows of foreign investors who took advantage of the steady growth in the country’s domestic business environment.

The equities market provided the lead as the capital market sustained its rally for the most part of the year. The stock market’s main indicator, the All-Share Index (ASI) rose by 34.9 per cent from 28,079 on the last day of 2012 to 37,884 in mid-November 2013. Market capitalization was said to have increased by about the same margin (35 per cent) from N8.97 trillion to a little above N12 trillion in the same period.

Also in the outgone year, the United States made a $50 million direct investment in Nigerian stocks. A senior American envoy in Nigeria was said to have confirmed this during a courtesy visit to the Nigerian bourse in October.

The Power Sector

At last, the long-awaited privatisation of unbundled Poer Holding Company of Nigeria (PHCN) subsidiaries was finalised in 2013. In all, 10 electricity generating companies (GENCOs) built under the National Independent Power Projects (NIPP) scheme by the three tiers of government and 15 distribution companies (DISCOs) were sold to private investors who received their licences and certificates of ownership early October.

Discussions have also been initiated for the sale of an additional 10 GENCOs built by the Niger Delta Power Holding Company of Nigeria (NDPHCN).

It is however sad to note that two months after the handover, Nigerians are yet to notice any difference in power supply, customer relations and operational style.

Industry

This is perhaps one sector where the government seems not to have achieved much on a grand scale. Apart from intervention funds to small and medium enterprises (SMEs) and other subsectoral allocations, not much went the way of the organized private sector firms which have continued to groan under double taxation.

The government’s new auto policy has been described as laudable, but its implementation plan is what analysts are skeptical about.

Telecommunication

The telecommunications sector was a major driver of the 2013 economy even as network subscribers decried the mainly poor services rendered by the telecoms firms all through the year.

Migration via the mobile number portability is yet to bring any relief to those who have attempted. Even mobile banking which this sector is well positioned to serve is still struggling to kick off in the country.

Ibelema Jumbo