₦airaland Forum

NIGERIA plans to create a $25 billion fund with pub­lic and private financing to modernise infrastructure and avoid a recession.

Copying Venezuela’s exchange rate policy and China’s failed equity mar­ket strategy might seem the height of foolishness.

But, at least in the opinion of John Ashbourne, Africa economist at Capital Eco­nomics, that is precisely what Nigeria, the continent’s larg­est economy, has just done. “Low oil prices are battering Nigeria’s export-dependent economy, but it is the gov­ernment’s market-distorting response that risks pushing the country into a Venezuela-style crisis. Nigeria is sliding towards a Venezuela-style FX regime and adopting a Chinese-style stock market circuit breaker. Neither will reassure foreign investors, many of whom seem to be eyeing the exits.”

Both measures were an­nounced after markets closed on Friday, January 15. The circuit breaker on the Nigeri­an stock exchange, one of the worst performing in the world this year, with a fall of 17.7 per cent, will pause trading for 30 minutes if stock prices fall five per cent. Trading will cease for the day if it is trig­gered twice in a session, or after 1.45pm.

“The effect is akin to call­ing last orders at a crowded bar,” said Ashbourne. “It is hardly confidence-inspiring that Nigeria is copying a Chi­nese policy that is widely seen to have failed.”

He accepts that Nigeria’s circuit breaker may not be as badly designed as the Chinese version. Whereas the NSE All Share index rarely falls by five per cent a day, the Shang­hai Composite did so a dozen times in 2015. The NSE’s ver­sion has not yet been called into action.Nevertheless, Ashbourne said that using a circuit breaker to shore up the market, rather than to avoid volatility, is “deeply flawed”.

However, Ashbourne ar­gued the latest move takes Nigeria a step along the road to a Venezuela-style scenario, where the dollar now buys 913 bolívars on the black market, according to dolar­today.com, compared with an unofficial rate of 6.28/$. As the second chart shows, Nigeria’s reluctance to let the naira’s official exchange rate weaken means it has borne the brunt of the sharp fall in oil prices since the middle of 2014.



Read more http://spynigeria.com/financial-times-uk-calls-buharinomics-the-height-of-foolishness-spy-nigeria/

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Dele Momodu’s Candid Advice to Non-Performing Buhari
February 23, 2016 News 530 Views

“Instead of wasting so much time on trading blames, we can build on where Jonathan left off. Buhari needs to energise his team. They are looking weak and timid. I think most, if not all of them, are too scared to take risks and use their initiative. This is sad. No matter what you may say about Jonathan, his ministers were bubbly and vibrant. They enjoyed some modicum of freedom that fired their imagination and temperament.



“The President needs to encourage his men and women to loosen up or nothing tangible would be achieved soon. Everyone seems to be watching and studying the body language of the President and there are always conflicting signals.



“This lacklustre existence is always palpable whenever I see the pictures coming out of the Federal Executive Council meetings. The cabinet looks forlorn and haplessly dull. I’m not able to see a team at home with itself. Only the President can release his team from this self-manacled cage.

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Lai Mohammed just got aware that propaganda is a tool to fighting war, I think that is what he is leveraging on to counter the press oxygen for BH. When the press publish that BH attacked here and there they becomes more motivated. Lier Mohammed only want to discourage BH by saying they are defeated. Some of use knows it was a false conspiracy to mislead the public. Why I am worried is the lies which they have said they will not tell Nigerians when the president was accused of talking against the nation economy abroad. Today what we have seen is even more superior lies and deceit. Is this how we are going to continue?

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