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Seaport

Making 48-hours port clearance possible

The desire for an expedited and fluid process of clearing goods from our ports has been consistently canvassed by all administrations in our recent past. Admittedly, the situation is not near as chaotic as the ‘ship jam’ of the cement armada on Nigerian waters in the early 70s, but the promises of successive governments’ of a 48hr clearance process is clearly yet to manifest, even after several reforms were designed to this end.

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subsidy-cartoon

Subsidy: Nigerians like sheep to slaughter

The pace of governance under President Mohamed Buhari has been decried in some quarters as being slow in providing clear signals of a realistic, regenerative economic blueprint; some other Nigerians, however, conversely endorse Buhari’s more complimentary self branding of being slow and steady. Nevertheless, in the absence of any formal declaration of an economic strategy, it may still be possible to deduce government’s mindset on some critical challenges, through snippets from statements made by Senior government officials.

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naira

MPC and the blind leading the blind

The Monetary Policy Committee is the ‘Think Tank’ that designs the blueprint for best practice strategies that should drive Nigeria’s economic growth and prosperity. Thus, if the MPC’s recommendations were appropriate, and progressive, inclusive economic growth would evolve; conversely if the MPC’s diagnosis or prescriptions are off target, then our current stunted growth experience will inevitably be the product of implementating those Monetary Policies midwived by the committee from time to time.

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Buhari-Minister

Collegiate presidency and national harmony

“The National Assembly, demonstrated great courage in throwing out Obasanjo’s third term bid, and they appropriately received the commendation of all patriotic Nigerians, but discerning Nigerians have warned against complacency. If the rate of poverty deepens and injustice and disrespect for the rule of law by the executive remain unchecked, we can still end up with a National Assembly wholly made up of surrogates as witnessed in some states, vis-à-vis the godfather syndrome, in the recent past.

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refinery 7

65 more refineries, Hurray – but…

The release of licenses, in June this year, to 65 Nigerian companies to establish local refineries must be welcome news to everyone who is unhappy with the overwhelming Foreign Exchange bill for our fuel imports. The licenses were granted barely two weeks after President Buhari’s inauguration, and probably provide a strong indication of PMB’s burning desire to reduce Nigeria’s huge fuel import bill and hopefully also reduce or eliminate the incidence of subsidy in fuel pricing.

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Naira-Dollar

The poison in further devaluation

Indeed, Naira devaluation is probably the most potent weapon against the prosperity of Nigerians. Nigeria’s migration from a potential industrial power house with bustling social affluence, to a subdued and stumbling economy clearly began with the adoption of IMF’s Structural Adjustment Programme during Babangida’s regime: the chorus from International Agencies, at that time, was also that falling oil prices with an unserviced debt burden and the consequent restriction of trade credit to Nigeria, were the products of an allegedly overvalued Naira exchange rate.

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Emefiele CBN Governor

High expectation for TSA

“First of all, you have got liquidity surplus in the banking industry; … there is over N1.3tn or so sitting in banks and belonging to government agencies. Now basically, they (these funds) are at zero percent interest and the banks are lending about N2tn to the government and charging 13 to 14%! Now, that is a very good business model, isn’t it? (You) Give me your money for free and I lend it to you at 14%; so why would I go and lend to anyone?”

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CBN & Exchange rate: Naira & Dollar

Nigeria: Where prosperity is unconstitutional

Regrettably, this enabling reform that is clearly in consonance with the constitutional objectives has ironically been rejected on the ground that it is “unconstitutional”. Surely, for crying out loud, no one is suggesting that we should spend dollars instead of Naira; nonetheless, CBN appears insistent on cutting its nose to spite its face, as a payment reform that would facilitate the achievement of its core mandate for price stability is brazenly rejected as illegal.

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CBN & Exchange rate: Naira & Dollar

Yoyo naira exchange rates and common sense

Notwithstanding, the CBN has again assured Nigerians, that the current Naira rate would be stable, as it is inappropriate for the tail (i.e. the small parallel market) to wag the dog. Nevertheless, the CBN may have been in denial of the inflationary potential on the economy of the ultimately higher market prices for rice and 40 other items recently banned from official dollar purchase.

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1000-naira-notes

Papa has a new bag of debts

Unfortunately, the National Assembly in its self-serving wisdom ignored this faux pas, and it is doubtful if the banks ever repaid this loan. Nigeria’s external debt stock has alarmingly continued its unrestrained spiral and now exceeds $10.3bn as at 30th June 2015, while the outstanding Domestic stock has also risen to N8.4 Trillion; furthermore, the debt stock of state governments has also risen above $10bn to make up a consolidated outstanding National debt of almost $64bn.

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subsidy-cartoon

Double whammy of fuel import subsidies

It is ironical that despite the raging public debate on whether or not to sustain the regime of fuel price subsidy, our government may have, regrettably, once more, inadvertently doubled the existing N50/litre subsidy. The Petroleum Product Pricing Regulatory Agency’s template indicates that as at June/July 2015, the “subsidy free” price of petrol hovered around N140/litre; thus, the regulated pump price of N87/litre, implies that motorists currently pay over N50/litre less than the actual recovery price.

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CBN Governor, Mr Godwin Emefiele

‘The Economist’ and CBN’S “toothpick alert”

What is clear from ‘The Economist’ story, however, is the overriding message that investors want more Naira depreciation, so that speculative overseas investors can readily expand their portfolio of Nigeria’s listed equity for less dollar values. In pursuit of this objective, “The Economist” is ‘righteously’ alarmed that ‘instead of allowing the Naira to devalue” (the writer probably means depreciate as a currency does not unilaterally devalue itself) “the Central Bank is trying to defend the Naira rate by blocking imports”.

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