Growth rate set to slow to 16-year low of 3.3% as oil falls
Naira policy is biggest concern, Citigroup analyst Howell says
When Muhammadu Buhari clinched victory in Nigeria’s presidential elections in March, stocks soared as investors looked to the former military ruler to reverse decades of economic mismanagement and policy inertia. Now hopes have fizzled in his ability to turn around Africa’s largest economy and oil producer.
Money that flowed into stocks and bonds in the West African nation, which McKinsey & Co. says could become one of the world’s 20 biggest economies by 2030, is now fleeing as growth prospects diminish along with oil prices. While Buhari, 72, has prioritized stamping out the graft that has plagued Nigeria since independence from Britain in 1960, policy-making appears as uncertain and haphazard as ever.
“After the initial euphoria, people have become disillusioned,” Ayodele Salami, who oversees about $500 million of African equities as chief investment officer of London-based Duet Asset Management Ltd., said by phone. “He would probably say that he’s being deliberative and cautious. But we expected more.” Duet’s Africa fund has cut its investments in the country to about 24 percent of the total from 38 percent in the last year.

Buhari waited five months before naming his cabinet, hasn’t proposed a clear plan to revive growth and backed foreign-exchange controls aimed at defending the naira. His retention of gasoline subsidies, plans to raise spending in the face of declining revenue and silence about a $5.2 billion fine levied on mobile-phone operator MTN Group Ltd. have added to investor unease.
Nigeria’s benchmark stock index has plunged 22 percent since reaching a year-high on April 2, the day after Buhari was declared the winner of the presidential race against incumbent Goodluck Jonathan. That’s the third-worst performance globally in the period, after the bourses in Ukraine and Egypt. The index advanced 12.5 percent in the two days after Jonathan conceded.

To be sure, Buhari inherited depleted government coffers and a bureaucracy that multiple probes have blamed for looting billions of dollars of oil revenue. The president has said he delayed appointing ministers because he needed time to vet suitable candidates.
Garba Shehu, a spokesman for Buhari, didn’t immediately respond to written questions after requesting they be sent that way.
The hiatus has compounded the pain caused by the slide in the price of crude, which accounts for two-thirds of government revenue and 90 percent of export earnings. Growth, which averaged 6.3 percent annually over the past decade, is set to slow to a 16-year low of 3.3 percent this year, according to the median estimate of 15 economists surveyed by Bloomberg.
Many filling stations ran dry this month as the government withheld fuel subsidies to suppliers, preventing them from restocking. Lengthening lines forced Buhari to ask lawmakers for permission to pay 413 billion naira ($2 billion) in overdue payments, an amount that hadn’t been budgeted for.
While next year’s budget has yet to be finalized, Buhari wants to raise spending by 56 percent, according to a person who attended a briefing on the government’s plans and asked not to be identified because the matter is private. Vice President Yemi Osinbajo says the government plans to spend its way out of a slowing economy and that an infrastructure fund will be created with public and private financing.

The penalty imposed on MTN’s Nigeria unit last month for failing to register about 5 million subscribers may be an attempt to plug the hole in government finances, according to Cobus de Hart, an economist at NKC Independent Economists.
“You cannot deny there might be a fiscal element to the massive fine,” he said by phone from Paarl, near Cape Town. “It will make investors a little bit more wary of investing in Nigeria.”
An even bigger concern for many investors is the authorities’ naira policy. The Central Bank of Nigeria, with Buhari’s backing, has burned through $4.3 billion of reserves this year and choked off supply of foreign exchange to banks and their customers to defend the naira, even as major oil exporters such as Russia and Colombia have let their currencies slide. The restrictions prompted JPMorgan Chase & Co. to remove Nigeria from its local-currency emerging-market bond indexes, tracked by more than $200 billion of funds, in September, triggering a selloff in the nations’ assets.
While the naira has been all but fixed at about 198 to 199 per dollar since March, forward prices suggest it will drop by almost one-fifth, to 243.5, in a year.

“The number-one issue is the exchange rate,” Andrew Howell, a Citigroup Inc. frontier markets strategist, said from Lagos. ”Access to foreign exchange is becoming a widespread problem.”
Nigerian Breweries Plc, the nation’s biggest brewer that’s controlled by Heineken NV, said it takes two weeks to obtain dollars to pay for its imports, twice as long as it required a few months ago. Nestle SA’s Nigerian unit has had to wait six weeks for dollars, according to Renaissance Capital Ltd. analysts.
Buhari has won plaudits from leaders including President Barack Obama for his efforts to tackle graft. He replaced the management of the state oil company, which was accused of withholding billions of dollars from the government, and has stepped up the fight against an insurgency being waged by Islamist group Boko Haram.
“The degree of transparency we’re starting to get with the new administration is hugely positive,” Douglas Rowlings, an analyst at Moody’s Investors Service, said in an interview in Lagos. “It gives investors the perception that operating in Nigeria will now be done following proper procedures.”
Jan Dehn, head of research at Ashmore Group Plc, which oversees almost $60 billion of emerging market assets, remains unconvinced that Buhari is up to the job. The fund manager sold all its Nigerian government debt in the past year.
“So far the Buhari administration has done all the wrong things,” Dehn said by phone from London. “Not only has he been incredibly slow in taking any action, when he finally has taken action on the economic front it’s been diametrically opposed to sensible policy. That is a major disappointment given expectations prior to his election.”
Before it's here, it's on the Bloomberg Terminal.
Nigeria Oil

http://www.bloomberg.com/news/articles/2015-11-26/buhari-bounce-becomes-bust-as-nigeria-policies-annoy-investors

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Buhari is taking a crash course in modern-day governance.
Why do you think he's travelling like butterfly?

Jan Dehn, head of research at Ashmore Group Plc, which
oversees almost $60 billion of emerging market assets,
remains unconvinced that Buhari is up to the job. The fund
manager sold all its Nigerian government debt in the past
year.
“So far the Buhari administration has done all the wrong
things,” Dehn said by phone from London. “Not only has he
been incredibly slow in taking any action, when he finally
has taken action on the economic front it’s been
diametrically opposed to sensible policy. That is a major
disappointment given expectations prior to his election.”

Wicked.

Let's hope he does not eventually crash the already unstabilized economy.

I told Nigerians and warn bigots against voting out GEJ.

Jonathan had a cabinet capable of managing austerity or even recession.

APC is a socialist party whose policies are directly opposed to trade liberalization and open economy.

And for Buhari, he is not wired for 21st centuring democratic governance and is not ready to sit back and allow Prof. Osinbajo implement his vision for greater Nigeria.

Most of those investors are criminals. They preferred the economy where they would rob peter to pay Paul. What is wrong so far with Buhari's policy?

On Oil and Gas, he only said they should register to avoid oil theft.

On MTN, they registered over 5million subscribers without following the laid down policy of NCC, is that not wrong. Don't they fine people with worse penalties in their countries?

Let them go. Nigeria needs to start at once. This is the best time for us.

That's what you get for voting in a senile Knucklehead for president.

These punk asses that call themselves fans will still defend the crazy old troll called president

veraponpo:

Most of those investors are criminals. They preferred the economy where they would rob peter to pay Paul. What is wrong so far with Buhari's policy?

On Oil and Gas, he only said they should register to avoid oil theft.

On MTN, they registered over 5million subscribers without falling the laid down policy of NCC, is that wrong. Don't they fine people with worse penalties in their countries?

Let them go. Nigeria needs to start at once. This is the best time for us.

if they go, your parents that are feeding you would go broke too..they'll probably send you out of there house to do boy boy for an Igbo man

veraponpo:

Most of those investors are criminals. They preferred the economy where they would rob peter to pay Paul. What is wrong so far with Buhari's policy?

On Oil and Gas, he only said they should register to avoid oil theft.

On MTN, they registered over 5million subscribers without falling the laid down policy of NCC, is that wrong. Don't they fine people with worse penalties in their countries?

Let them go. Nigeria needs to start at once. This is the best time for us.

Investors should go away?!

This country is truly a zoo

liberty300:
if they go, your parents that are feeding you would go broke too..

they'll probably send you out of there house to do boy boy for an Igbo man

Laugh wan kill me

Actually socialism can only be sustained by capitalism and can never survive in itself.

Because He is not allowing looting.

Sponsored write up

In Femi's voice wailing wailer, fullness of time. When is the fullness of time coming? Because Dehn said that Buhari is "diametrically opposed to sensible policy" is he also a wailing wailer or he just got his membership card.

Buhari is a terrorist. Who wants to stay with a terrorist with no concrete plans, than travelling around the world and saying looted funds are being refunded na ghost return am??

Do you know that almost all the 95% have bought over the wailer forms?
Fuel scarcity, hard economic policies do not know 95% again ooo.
Zombies and Robots are removing the the sim cards inserted in their heads by APC.
You can see Beremx has reduced her presence on this forum.
The Buhari shrine where we normally found thousands of Buhari worshippers, is fast depleting of its customers.
Some of the worshippers in order to show their frustrations have become aggressive, abusive and insulting.

People should take a chill pill already. One thing is for sure in all these- had Jonathan won the election, what we are witnessing today economically- which is no fault of Buhari's but remnants of the failure of PDP/GEJ- would have been a tip of the iceberg.

Buhari came in at a critical time the nation was witnessing its worst moments ever since our return to civil rule- the naira was taking a severe beating, oil price was heading to rock bottom, stocks were nose-diving, electricity supply was nearly nonexistent, security was in shambles, and the general economic outlook was as bleak and as hopeless as never. Fixing all these rot which were occasioned by PDP's relentless assault on our commonwealth, especially in the last SIX years, takes more than just SIX months!

Meticulous planning is needed and there is no room for error in executing those plans. It is a make or mar era for Nigeria and Buhari understands that perfectly and needs no soothsayer to say so- certainly not internet rants from sore losers who would rather we continued in the road to perdition with Jonathan.

A budget is being drawn and any honest critic of the government would agree that its performance would be the first true litmus test of the Buhari admin whose first comprehensive prognosis, according to our constitution, would be out after FOUR years- after four budgets.

Well meaning Nigerians like myself remain resolute in their commitment for a better, prosperous, just, united, and resilient Nigeria, and unwavering in their trust in Buhari and his cabinet- Wailers can Wail and Howlers can Howl for all we care- it is in their DNA to do so.

Slowly but Steadily, Baba is charting a new course for a Nigeria of our dreams, my dream, where we wouldn't wake up everyday to be inundated by news of how Ministers and public officers are in a tight race to outdo themselves in the art of stealing public funds/properties- the only achievement that hitherto qualified one for National honours and State Pardon/VIPship. That is the Change Omenka voted for and it is as sure as day and night on course.

May God continue to bless Nigeria to the utter consternation of her enemies within and without.

codedguy1:
Let's hope he does not eventually crash the already unstabilized economy.

he will crash it if he keeps on like this. There is a limit to everything. What ppl don't realize about buhari is,he still doesn't know that he is the president . His 74year old brain is finding it hard to keep pace with the ever change dynamics of today's world

" Buhari is an economic terrorist." Education


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IAMTHEHERO:
Do you know that almost all the 95% have bought over the wailer forms?
Fuel scarcity, hard economic policies do not know 95% again ooo.
Zombies and Robots are removing the the sim cards inserted in their heads by APC.
You can see Beremx has reduced her presence on this forum.
The Buhari shrine where we normally found thousands of Buhari worshippers, is fast depleting of its customers.
Some of the worshippers in order to show their frustrations have become aggressive, abusive and insulting.

I reduced my presence on this forum. So what?

IsraeliAIRFORCE:
I told Nigerians and warn bigots against voting out GEJ.

Jonathan had a cabinet capable of managing austerity or even recession.

APC is a socialist party whose policies are directly opposed to trade liberalization and open economy.

And for Buhari, he is not wired for 21st centuring democratic governance and is not ready to sit back and allow Prof. Osinbajo implement his vision for greater Nigeria.

Makes no damn sense

Why should any sane person obviously not under tribal influence vote a cabinet that failed to manage/engineer the economy through the boom years

Why should they be trusted despite the increase of debt profile with nothing to show for it

If common sense was all that common then surely you wouldn't be going on about gambling another term just so they can re-engineer us from the austerity they not only contributed to by their lack of foresight and proper economic planning

The dullard even gave 3 vital ministries to Just a single person who isn't even a professional in any of those feild . How can you lump together the ministry of power,works and housing and expect the best? It is obvious the dullard is just experimenting with the things

The dullard buhari is making GEJ looks like the most intelligent Nigerian president ever..

For now, buhari has no clue on where to start...

ok

liberty300:
if they go, your parents that are feeding you would go broke too..they'll probably send you out of there house to do boy boy for an Igbo man

You think I am like you. These children are very rude. I think our monickers should be showing our ages now. I am not only a business owner, I am also a professional in my line and live in my own house , so grow up small boy.

Promhize:


Investors should go away?!

This country is truly a zoo

Unfortunately that is the country of your great grand father, your grand father and your father. Your sense has become so warped that a country that arrests his own citizens for tax evasion is complaining that another is penalizing a company for breaking the law. What a contradiction ?

Little wonder when Prof Jerry Ghana said that the advanced countries who are now complaining of our corruption trained us because we were never corrupt before they came.

Have you asked yourself who is buying our stolen oil?

Have you asked yourself who is giving the bribes to our politicians?

Have you seen the monumental corruption in FIFA involving Blatter and Platini?

If they want to go let them go, after all China kills her own corrupt politicians and we have not gotten to that level yet.

Beremx:
I reduced my presence on this forum. So what?

you dey sell land?

LastSurvivor:
The dullard buhari is making GEJ looks like the most intelligent Nigerian president ever..

For now, buhari has no clue on where to start...

The writeup said by 2030 not right now

But erdyots just have to hate Buhari

omenka:
People should take a chill pill already. One thing is for sure in all these- had Jonathan won the election, what we are witnessing today economically- which is no fault of Buhari's but remnants of the failure of PDP/GEJ- would have been a tip of the iceberg.

Buhari came in at a critical time the nation was witnessing its worst moments ever since our return to civil rule- the naira was taking a severe beating, oil price was heading to rock bottom, stocks were nose-diving, electricity supply was nearly nonexistent, security was in shambles, and the general economic outlook was as bleak and as hopeless as never. Fixing all these rot which were occasioned by PDP's relentless assault on our commonwealth, especially in the last SIX years, takes more than just SIX months!

Meticulous planning is needed and there is no room for error in executing those plans. It is a make or mar era for Nigeria and Buhari understands that perfectly and needs no soothsayer to say so- certainly not internet rants from sore losers who would rather we continued in the road to perdition with Jonathan.

A budget is being drawn and any honest critic of the government would agree that its performance would be the first true litmus test of the Buhari admin whose first comprehensive prognosis, according to our constitution, would be out after FOUR years- after four budgets.

Well meaning Nigerians like myself remain resolute in their commitment for a better, prosperous, just, united, and resilient Nigeria, and unwavering in their trust in Buhari and his cabinet- Wailers can Wail and Howlers can Howl for all we care- it is in their DNA to do so.

Slowly but Steadily, Baba is charting a new course for a Nigeria of our dreams, my dream, where we wouldn't wake up everyday to be inundated by news of how Ministers and public officers are in a tight race to outdo themselves in the art of stealing public funds/properties- the only achievement that hitherto qualified one for National honours and State Pardon/VIPship. That is the Change Omenka voted for and it is as sure as day and night on course.

May God continue to bless Nigeria to the utter consternation of her enemies within and without.

[size=13pt]International financial and business news giant,
Bloomberg, has expressed serious doubts on the
ability of President Muhammad Buhari of Nigeria
to turn around Africa’s largest economy and oil
producer.

In a scathing analysis of the over six months of
Buhari in office, the news outlet concluded that
the country was on a dangerous slide with
investments at an all-time low, the stock market
rated as the third-worst performing globally
within the period, and growth projected to slow to
a 16-year low of 3.3 percent.

In an article, Buhari Bounce Becomes Bust As
Nigeria Policies Annoy Investors, the group noted
that stocks that soared as investors looked to the
former military ruler to reverse decades of
economic mismanagement and policy inertia,
have all nosed dived and “Now hopes have fizzled
in his ability to turn around Africa’s largest
economy and oil producer.

“Money that flowed into stocks and bonds in the
West African nation, which McKinsey & Co. says
could become one of the world’s 20 biggest
economies by 2030, is now fleeing as growth
prospects diminish along with oil prices. While
Buhari, 72, has prioritized stamping out the graft
that has plagued Nigeria since independence from
Britain in 1960, policy-making appears as
uncertain and haphazard as ever.”

Quoting Ayodele Salami, who oversees about $
500 million of African equities as chief investment
officer of London-based Duet Asset Management
Ltd., he said the initial euphoria has turned to
disillusionment.

Salami said, “After the initial euphoria, people
have become disillusioned. He (Buhari) would
probably say that he’s being deliberative and
cautious. But we expected more.” Duet’s Africa
fund has cut its investments in the country to
about 24 percent of the total from 38 percent in
the last year.

According to Bloomberg, Buhari the hefty $5.2
billion fine levied on mobile-phone operator MTN
Group Ltd. Are desperate moves to shore up
government revenue outside plunging oil prices,
warning that it could have dire consequences on
the country’s economy.

“The penalty imposed on MTN’s Nigeria unit last
month for failing to register about 5 million
subscribers may be an attempt to plug the hole in
government finances, according to Cobus de Hart,
an economist at NKC Independent Economists.
“You cannot deny there might be a fiscal element
to the massive fine,” he said by phone from Paarl,
near Cape Town. “It will make investors a little
bit more wary of investing in Nigeria.”

On the stock exchange, it noted that “Nigeria’s
benchmark stock index has plunged 22 percent
since reaching a year-high on April 2, the day
after Buhari was declared the winner of the
presidential race against incumbent Goodluck
Jonathan. That’s the third-worst performance
globally in the period, after the bourses in Ukraine
and Egypt. The index advanced 12.5 percent in
the two days after Jonathan conceded.”

It further observed that an even bigger concern for
many investors is the authorities’ naira policy.
The Central Bank of Nigeria, with Buhari’s
backing, has burned through $4.3 billion of
reserves this year and choked off supply of
foreign exchange to banks and their customers to
defend the naira, even as major oil exporters such
as Russia and Colombia have let their currencies
slide.

The restrictions prompted JPMorgan Chase
& Co. to remove Nigeria from its local-currency
emerging-market bond indexes, tracked by more
than $200 billion of funds, in September,
triggering a selloff in the nations’ assets.

While the naira has been all but fixed at about
198 to 199 per dollar since March, forward prices
suggest it will drop by almost one-fifth, to 243.5,
in a year.

“The number-one issue is the exchange rate,”
Andrew Howell, a Citigroup Inc. frontier markets
strategist, said from Lagos. ”Access to foreign
exchange is becoming a widespread problem.”
Nigerian Breweries Plc, the nation’s biggest
brewer that’s controlled by Heineken NV, said it
takes two weeks to obtain dollars to pay for its
imports, twice as long as it required a few
months ago. Nestle SA’s Nigerian unit has had to
wait six weeks for dollars, according to
Renaissance Capital Ltd. analysts.

Jan Dehn, head of research at Ashmore Group
Plc, which oversees almost $60 billion of
emerging market assets, remains unconvinced
that Buhari is up to the job. The fund manager
sold all its Nigerian government debt in the past
year.

“So far the Buhari administration has done all the
wrong things,” Dehn said by phone from London.
“Not only has he been incredibly slow in taking
any action, when he finally has taken action on
the economic front it’s been diametrically
opposed to sensible policy. That is a major
disappointment given expectations prior to his
election.”

http://thewhistler.ng/story/bloomberg-writes-off-buhari-he-has-no-capacity-to-run-nigeria?utm_source=&utm_medium=facebook#.VlkJq-kfNWI.facebook[/size]

The road is rough and there are many dangers...

naija don tire me!!!

k