• Debt mgt strategy exposes Nigeria


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 Saturday Telegraph yesterday. According to the financial institution, although President Buhari’s “approval ratings sit near alltime lows, 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 Mr 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 87 million. “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 USD1.5bn in H2 2018, and about USD2.5bn 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.” 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.



https://newtelegraphonline.com/2018/09/hsbc-buharis-2nd-term-risks-limited-economic-progress/

Let the North give us a Dangote or at least someone with a track record and success stories. Buhari can't be the best they have to offer.....his records are abysmal and future with him in charge ¦ gloomy!

He and his clownish supporters would not listen.

sometimes i think one tribe is bribing UN,US & EU to write bad things about nigeria. Baba is doing fine, we like it like that.

Dreamkiller:
sometimes i think one tribe is bribing UN,US & EU to write bad things about nigeria. Baba is doing fine, we like it like that.

clown just take a look at our stock market which is a reflection of our economy kill the economy faster so that i can invest my $8,000 to invest in our stock market

Not just to our economy but to our existence. This man is so confused and lifeless

Dreamkiller:
sometimes i think one tribe is bribing UN,US & EU to write bad things about nigeria. Baba is doing fine, we like it like that.

Everybody is corrupt except Buhari and his supporters

That's how typical zombies reason... They have been fed with lies and propaganda that their brains arent functional again...

This one believes that US... UN and EU took bribe to expose the economic deficiencies of the slow President..

This is the kind of people I share a country with... Pathetic

Redoil:
clown just take a look at our stock market which is a reflection of our economy

He will tell you that the figures are manipulated by the opposition.... Nigeria is now heaven on earth...

He will end it with a loud sai barber chant

life less President , lifeless economy!

Spot on

Redoil:
clown just take a look at our stock market which is a reflection of our economy

who stock market help.

The dullards second term poses risk to even his own life, yet, he is willing to continue by all means, even if it means dying in Office. Its all about the 'Milky' to the Lifeless.

"According to the financial institution, although President Buhari’s “approval ratings sit near alltime lows, 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 Mr 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.”

Nigeria beware.Reality is staring in the eyes.

Dreamkiller:
sometimes i think one tribe is bribing UN,US & EU to write bad things about nigeria. Baba is doing fine, we like it like that.

I wanted to give you a proper reply but I saw your name and realized you are the true reflection of what Nigeria stands for "dreamkiller". Maybe that one tribe in your warped thinking made Nigeria the capital of poverty in the world.

Apc neva had a blue print on governance 4rm d day i saw Der manifesto i knew dy were confuse God help us

APC have displayed a high level of incompetence in their three years rule in all aspects of the Nigerian sector.
Its disheartening, pitiful, regrettable and disappointing that the hopes of millions of Nigerian whose yearning for a positive change have been dashed.
The disappointment in the hearts of the technocrats, elites, learned icons, gurus of political thoughts, social thinkers, religious scholars, the helpless masses and even the downtrodden is unimaginable, unquantifiable and unthinkable.

Despite these, some of us do not loose hope because in Nigerian politics, THE BEAUTIFUL ONES ARE NOT YET BORN.

The geriatric is a fraud of monumental proportion... With nothing to offer... His low IQ supporters are so annoying and daft!

The problem we have is that zombies don't know economy.

Pmb is A Limiting Factor to the Development of Nigeria

Is Buhari the best brain north can offer?

Expect a bunch of economic illiterates on Nairaland to say they know better about the economy than a company that made 210+% more money than Nigeria in 2017 and has $2 trillion (700 trillion naira) in assets.

cc Mynd44 and co.

-Lord

Buhari must win 2019 election for our change to be complete.

Dreamkiller:
sometimes i think one tribe is bribing UN,US & EU to write bad things about nigeria. Baba is doing fine, we like it like that.

my be you are leaving inside a well completely unaware of your sorroundings