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Buhari’s Re-Election Dangerous To Economic Dev -HSBC …APC FG, Stinking Can Of Corruption -Timi Frank
Nigeria’s current economic struggles look set to continue if President Muhammadu Buhari wins a second term in office, the multinational banking and financial services company, HSBC, has said.
The company stated this in a report by its Global Research unit, entitled, “Nigeria, Papering Over the Cracks”, obtained by London-based Telegraph, yesterday.
According to the financial institution, although President Buhari’s “approval ratings sit near all-time low a development, it said, “largely reflects the impact of Nigeria’s painful recession in 2016-17 and the sustained economic hardship that has accompanied his presidency, including rapidly rising joblessness, and poverty,” the President will once again lead the APC into the 2019 elections.
It, however, stated: “A second term for Buhari raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”
The multinational banking group, which is Europe’s largest by total assets, noted that while higher oil prices have brightened Nigeria’s macro outlook, boosting export earnings, improving the supply of foreign exchange, and supporting naira stability, the Buhari administration was yet to address the economy’s structural shortcomings.
Specifically, it said: “Economic growth remains sluggish and reliant on the rebound in oil output while the non-oil economy, which accounts for about 90 per cent of GDP, continues to languish with many service sectors still mired in contraction. Joblessness continues to rise, up almost three-fold in three years to 19 per cent in Q3 2017, pushing the number in poverty to 87million.
“Meanwhile, current account improvements may have pivoted on higher oil prices, but they also derive from on-going import restrictions and limited FX access for many sectors of the economy. All told, we see growth capped at about 2.5 per cent over the next two years – a welcome recovery from the 2016 contraction, but less than half the rate of the previous cycle.”
It further stated that in addition to failing to address the country’s ongoing reliance on oil revenues and the issue of inadequate nonoil tax collection, the administration was also grappling with the challenge of having a large share of its budget directed to debt service.
The company noted that while the Federal Government’s debt management strategy of issuing external debt to redeem more expensive short-term government securities is helping reduce debt service costs in the near term, it “exposes the fiscal position to exchange rate risk in the event of a future decline in oil prices and naira devaluation.”
In addition, it stated that high oil prices has not translated into nonoil growth, adding that: “Nigeria’s reliance on fuel imports means rising international oil prices are pushing up the cost of fuel subsidies, estimated by the Petroleum Products Pricing Regulatory Agency (PPPRA) at USD250m in May alone.”
Besides, HSBC projected: “Oil prices at current levels therefore suggest a fuel subsidy that could total $1.5billion in H2 2018, and about $2.5billion for the year as a whole, which would equate to almost 20 per cent of last year’s gross oil revenue.”
It, however, stated that while the, “polls look set to be a closely contested affair” and the, “political environment favours a return to power for the PDP, yet the opposition remains weak and fragmented, and has yet to declare its presidential candidate.”
The Senior Special Assistant on Media and Publicity to the President, Mallam Garba Shehu, declined comments on the report but referred our correspondent to the Chief Economic Adviser to the President.
However, the referral could not be reached as at the time of filing this report.
Meanwhile, former Deputy National Publicity Secretary of the All Progressives Congress (APC), Comrade Timi Frank, has described the President Muhammadu Buhari’s-led administration of a stinking can of corruption.
Frank was reacting to claims by the Chairman, Presidential Advisory Committee Against Corruption (PACAC), Prof. Itse Sagay, in an interview with a national daily, that President Muhammadu Buhari was being soft on corrupt politicians in his cabinet and within the All Progressives Congress (APC) in order to “win the 2019 elections” and to “strengthen democracy.”
In a statement signed, yesterday, Frank insisted that it is fraudulent to cover-up graft and protect accused persons – who occupy enviable positions in this regime – under the guise of ensuring the re-election of Buhari or strengthening democracy.
Frank noted that the recent defection of a former Governor of Akwa Ibom State, Senator Godswill Akpabio, from the Peoples Democratic Party (PDP) into the APC was one out of the multitude of allegedly corrupt politicians who have taken permanent refuge in the Buhari’s administration in order to escape the lawful prosecution for their nefarious deeds.
The Bayelsa-born politician said: “We know that that the allegations of false NYSC exemption certificate against the Minister of Finance, Kemi Adeosun, has since been swept under the carpet. The grass cutting scandal involving the immediate past SGF, Babacheer Lawal, remains a no go area. The bribery allegations against the Chief of Staff to the President, Abba Kyari does not warrant investigation and prosecution by a government claiming to fight corruption!
“Need I talk about the large-scale corruption being perpetuated by officials of the Central Bank of Nigeria (CBN) who have elected to operate varied exchange rates regime to defraud the country with the active connivance of their collaborators in the presidency.
“The corruption in the NNPC rightly exposed by the Minister of State (Petroleum), Dr. Ibe Kachikwu, does not warrant investigation because the presidency is involved in it.
“Only recently, N100billion tax evasion scam by Alpha Beta – a tax consulting firm owned by A chieftain of the APC, Asiwaju Bola Ahmed Tinubu, was exposed. Yet, the Economic and Financial Crimes Commission (EFCC) does not deem it fit to commence investigation into the activities of the company simply because an APC chieftain would be put in the eye of the storm!
“The Governor of Rivers State, Chief Nyesom Wike, has severally petitioned the EFCC with a call on the anti-graft body to investigate corruption allegations against the immediate past governor of the state, Chibuike Rotimi Amaechi – the Minister of Transportation under the Buhari’s administration -yet apart from acknowledging that it indeed received the said petitions, the EFCC has since turned a blind eye to the allegations,” he lamented.
He said while the government has been on asset-freezing-and-loot-recovery-spree, especially from the members of the opposition political parties or those considered to be anti-Buhari accused of corruption, the real looters in government and politicians with corruption allegations against them within the ranks of the APC are sitting pretty at ease enjoying underserved amnesty.
He said: “We know several top officials of this government and members of their families who have continued to acquire choice assets and those building mansions in their states of origin and abroad since they joined this government in 2015.
“Those perpetuating corruption under this government whose names have never been mentioned are legion compared to the few names mentioned above and very soon we shall expose them with concrete evidence to prove their corrupt activities.”
He called on the EFCC to immediately recommence the investigation and prosecution of all those with corruption baggage in President Buhari’s administration and the APC or lose its credibility both at home and abroad for ever.
He added that the EFCC and other security agencies will henceforth lack the moral right to prosecute members of the opposition political parties or any Nigerian accused of corruption should they fail to immediately prosecute the identified corrupt elements in this administration and the APC.
He also called on the international community to note clearly that Buhari is not fighting corruption but rather persecuting and repressing members of the opposition to remain in power, should he fail to order the prosecution of his cronies and party faithful with clear corruption allegations against them.
“These corrupt personalities hiding inside the government of Buhari and the APC will remain a test case for the EFCC as their investigation, arrest and prosecution or not will determine whether or not the anti-corruption policy of the Federal Government is genuine or a cheap political tool to retain power and remain relevant beyond 2019,” he declared.
President Bola Tinubu has ordered a security outreach to the hotbeds of recent killings in Plateau, Benue and Borno States, to restore peace to areas wracked by mass killings and bomb attacks.
National Security Adviser, Nuhu Ribadu, disclosed this to State House correspondents after a four-hour security briefing with the President at the Aso Rock Villa, Abuja on Wednesday.
“We listened and we took instructions from him. We got new directives…to go meet with the political authorities there,” Ribadu told reporters, adding that Tinubu directed them to engage state-level authorities in the worst-hit regions.
Director-General, National Intelligence Agency, Mohammed Mohammed; Chief Defence Intelligence of the Nigerian Army, Gen. Emmanuel Undianeye; Director-General, Department of State Services, Oluwatosin Ajayi and Chief of Staff to the President, Femi Gbajabiamila, appeared for the briefing.
The Tide’s source reports that in Plateau State, inter-communal violence between predominantly Christian farmers and nomadic herders spiralled into gory slaughter when gunmen stormed Zikke village in Bassa Local Government early on April 14, killing at least 51 people and razing homes in a single night.
In Benue, at least 56 people were killed in Logo and Gbagir after twin assaults blamed on armed herders.
Meanwhile, in Borno State, eight passengers perished and scores were injured when an improvised explosive device ripped through a bus on the Damboa–Maiduguri highway on April 12.
Ribadu explained that after an extensive briefing, intelligence chiefs received fresh instructions to restore peace, security and stability across Nigeria.
“In particular, Tinubu had ordered immediate outreach to the political authorities in Plateau, Benue and Borno States, and the defence team had gone round those States to carry out his directives and report back.
“We gave him an update on what has been the case and what is going on, and even when he was out there, before coming back, he was constantly in touch. He was giving directives. He was following developments, and we, in charge of the security, got the opportunity today to come and brief him properly for hours. And it was exhaustive.
“We listened and we took instructions from him. We got new directives. The fact is, Mr. President is insisting and working so hard to ensure that we have peace, security and stability in our country. We gave him an update on what is going on, and we also assured him that work is ongoing and continues.
“We also carried out his instructions. We went round, the chiefs were all out where we had these incidents of insecurity in Plateau State, Benue State, even Borno, these particular three states, and we gave him feedback, because he directed us to go meet with the political authorities there,” the NSA explained.
Ribadu described Tinubu as “worried and concerned,” and said he directed that all security arms be deployed around the clock.
The government, he added, believes these steps have already produced measurable improvements, even if the situation is not yet 100 per cent safe and secure.
“He’s so worried and concerned, he insisted that enough is enough, and we are working and to ensure that we restore peace and security and all of us are there. The armed forces are there, the Civil Police, intelligence communities, they are there.
“They are working there 24 hours, and we feel that we have done enough to believe that we are on the right course, and we’ll be able to be on top of things,” Ribadu stated.
The NSA emphasised that combating insecurity was not solely a Federal Government responsibility.
He stated, “The issue of insecurity often is not just for the government. It involves the subunits. They are the ones who are directly with the people, especially if some of the challenges are more or less bordering on community problems.
“Not entirely everything is that, but of course it also plays a significant role. You need to work with the communities, the local governments, and the governors, especially the governors.
“The President will continue to direct that. We should be doing that, and that’s what we are able to. We are very happy and very satisfied with the instructions and directives given by Mr. President this evening.”
In Borno State, the NSA noted that while violence had surged in recent months, the insurgents refused to accept defeat.
He warned that most recent casualties there resulted from improvised explosive devices—”cowardly” IED attacks targeting civilians—and from opportunistic raids that follow any lull in fighting.
“We are getting the cooperation of the leadership at the state level, and everybody. It’s not 100 per cent…but we are going there.
“When you are having peace and you are beginning to get used to it, if one bad incident happens, you forget the periods that you enjoyed peacefully,” he added.
He paid tribute to the “many who do not sleep, who walk throughout, who do not go for any break or holiday”—the soldiers, police and intelligence officers whose sacrifices have created the fragile calm Nigerians now experience.
“They will continue to be there,” he said, adding, “Things have changed in this country…we are on the right track and we will not relent. We will not sit down; we will not stop until we are able to achieve results.”
A Federal Government agency – the National Agency for Science and Engineering Infrastructure, has decried the low patronage of Nigerian-made products by Nigerians.
The agency identified some challenges leading to the low patronage of the local products as affordability and public perception, among others.
Speaking during a stakeholders meeting organised by the agency in Akure, Ondo State capital, yesterday, the Deputy Director of Engineering at NASENI, Mr Joseph Alasoluyi, said Nigerians preferred buying foreign goods compared to local goods.
Alasoluyi, however disclosed that the agency had trained over 50 participants in the production of hand-made products, in a bid to ensure Nigeria-made products are patronised.
He explained that NASENI was set up to promote science, technology, and engineering as a foundation for Nigeria’s development and currently operates 12 institutes nationwide to achieve its objectives.
According to him, the aim of President Bola Tinubu, who is also the overall chairman of NASENI, was to ensure high production and patronage of “our local products thereby creating employment opportunities for many.”
He said, “The idea of this programme is to interface to ensure we produce products using our indigenous technology. This is what NASENI is out for, to ensure that homegrown technologies are encouraged.
“We are out there to ensure we integrate efforts to ensure that local technology is used to develop products within the resources we have.
“ The NASENI’s ‘3 Cs’ – Creation, Collaboration, and Commercialisation – that define NASENI’s strategic mandate: Creating innovations through research, Collaborating with partners to develop and refine products, and Commercialising these solutions to benefit the economy.
“Our achievements include the development of solar irrigation systems, CNG conversion centres, building machines capable of producing up to 1,000 blocks per hour, 10-inch tablets, locally made laptops, and electric tricycles (Keke Napep) set for market launch.”
In his remarks, the Deputy Vice Chancellor of the Federal University of Technology, Akure, Prof. Samuel Oluyamo, blamed the Federal Government for not properly funding research in the varsities, also noting that many research outputs were left halfway due to lack of funding and weak linkages between research institutions and industry.
Oluyamo also queried the Federal Government’s commitment to funding research and development, saying many academic innovations remained on the shelve due to a lack of support for commercialisation and poor infrastructure.
“Until we upscale research into mass production, technological growth will remain elusive. The government is not funding research in the universities enough. Thank God for TETfund that is trying in this regime. The major interest in beefing up research in universities and research institutions is really not there,” he said.
The Director-General of the Debt Management Office, Patience Oniha, has said that Nigeria is in advanced discussions with JP Morgan to re-enter the Government Bond Index and renew investors’ confidence.
Oniha disclosed this on Wednesday at a Nigerian Investors’ Forum on the sidelines of the World Bank and International Monetary Fund Spring Meetings in Washington, D.C.
The DMO boss explained that Nigeria has enjoyed favourable credit assessment among rating agencies in recent times on the back of the sweeping reforms initiated by the Central Bank of Nigeria.
Fitch Ratings recently upgraded the Long-Term Issuer Default Ratings of seven Nigerian banks and two bank holding companies to ‘B’ from ‘B-‘, noting that the outlooks are Stable.
The affected issuers are Access Bank Plc, Zenith Bank Plc, United Bank for Africa Plc, Guaranty Trust Bank Limited, Guaranty Trust Holding Company Plc, First HoldCo Plc, First Bank of Nigeria Ltd, Fidelity Bank Plc and Bank of Industry Limited.
The upgrades of the Long-Term IDRs of the banks followed the recent sovereign upgrade and reflect Fitch’s view that Nigeria’s sovereign credit profile has become less of a constraint on the issuers’ standalone creditworthiness, the rating agency said.
Fitch also upgraded Nigeria’s Long-Term IDRs to ‘B’ from ‘B-‘ on 11 April, a decision that reflected increased confidence in the government’s broad commitment to policy reforms implemented since its move to orthodox economic policies in June 2023, including exchange rate liberalisation, monetary policy tightening and steps to end deficit monetisation and remove fuel subsidies.
“These have improved policy coherence and credibility and reduced economic distortions and near-term risks to macroeconomic stability, enhancing resilience in the context of persistent domestic challenges and heightened external risks,” Fitch said.
Nigeria was removed from the JP Morgan index in 2015 ostensibly due to its deviation from orthodox monetary policies and influence of capital control in its management of foreign exchange.
Principally due to reduction in oil revenues at the time, Nigeria introduced currency restrictions to defend the naira after it failed to halt a dangerous slide with burning of dollar reserves. The bank had earlier warned Nigeria to restore liquidity to its currency market in a way that allowed foreign investors tracking the index to conduct transactions with minimal hurdles.
“Foreign investors who track the GBI-EM series continue to face challenges and uncertainty while transacting in the naira due to the lack of a fully functional two-way FX market and limited transparency,” the bank said in a 2015 note.
Nigeria was listed in JP Morgan’s emerging government bond index in October 2012, after the Central Bank removed a requirement that foreign investors hold government bonds for a minimum of one year before exiting.
The JP Morgan Government Bond Index reflects investor confidence and opens doors to billions of investment flows, making Nigeria’s proposed re-entry a positive signal to the market and investors.
Oniha explained that talks with JP Morgan were ongoing and had gained momentum in recent times due to the stability created by the FX market reforms.
“With all the reforms that have taken place, particularly around FX, we have started engaging JP Morgan again to get back into the index. We think we are eligible now,” the DMO DG said.