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Nigerians Looking For Amala, Tuwo And Not Wall Street. by Prince Charles Dickson
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Nigerians Looking For Amala, Tuwo And Not Wall Street. Prince Charles Dickson First let me state very quickly that I am not an economist or an expert in financial analysis and all those jargons that follow figures, however I know enough to know what the basics are. Basics such as one plus one should give two given the right circumstances. The only argument is that on how many occasions do the circumstances come right? As usual our National Assembly has done a macabre dance of being concerned about the world financial melt down, in both houses, it was interesting to note the very child like debate, to a point one Senator said that we should not be concerned about the whole drama and that it was a white man's problem.
I cold hardly hold on to one well informed argument as to how the whole thing was going to affect Nigerian either positively or otherwise. The other day I read an economist say the whole thing was more of the developed nations than emerging economies like ours. The CBN has assured Nigerians that there is no cause for alarm. We have also put in place our own stop gap measure by seeking that the private sector to come to the aid of our stock market. However the truth of the matter is that Nigerians are hungry, Nigerians are living on the edge, Nigerians are surviving and no one really cares. And the best the government is best understood through this narrative. There was once a man who was very rich and very miserly at the same time. The villagers disliked him intensely. One day he said to them, "Either you're jealous of me or you don't understand my love of money-God alone knows. But you dislike me; that much I know. When I die, I won't take anything with me. I will leave it all for others. I will make a will, and I will give everything to charity. Then everyone will be happy." Even then people mocked and laughed at him. The rich man said to them, "What is the matter with you? Can't you wait a few years to see my money go to charity?" The villagers didn't believe him. He said, "Do you think I'm immortal? I'll die like everyone else, and then my money will go to charities." He couldn't understand why they didn't believe him. One day he went for a walk. All of a sudden it started raining heavily, so he took shelter under a tree. Under this tree he saw a pig and a cow. The pig and the cow entered into conversation, and the man overheard what they were saying. The pig said to the cow, "How is it that everybody appreciates you and nobody appreciates me? When I die, I provide people with bacon, ham and sausage. People can also use my bristles. I give three or four things, whereas you give only one thing: milk. Why do people appreciate you all the time and not me?" The cow said to the pig, "Look, I give them milk while I'm alive. They see that I am generous with what I have. But you don't give them anything while you're alive. Only after you're dead do you give ham, bacon and so forth. People don't believe in the future; they believe in the present. If you give while you are alive, people will appreciate you. It is quite simple." From that moment on, the rich man gave all he had to the poor. Our government still prides itself on our foreign reserve while amala and tuwo has no store in our kitchens. Our government still concerns itself with the oil price while vegetable oil is out of the reach of the common Nigerian. While foreign investors have stampeded out of Russia and Brazil as the credit crisis deepens, Nigeria has remained largely immune to the kind of short-term volatility roiling more established emerging market peers. But analysts warn that the turmoil on Wall Street could pose longer-term risks to prospects for a recovery in sub-Saharan Africa’s second biggest stock ex-change if it fuels a global slowdown that saps prices for Nigeria’s oil exports, which provide the bulk of export earnings and government revenue. Are we prepared? We enjoyed one of the strongest performances of any emerging market last year on the back of surging demand for banking stocks following a successful consolidation exercise. Flush with cash, banks such as United Bank for Africa, First Bank and Access Bank used the funds to expand across the continent. But none of this has progressively re-established a middle class, one of that has resulted in a change in fortune as corruption in government circles have continued unabated. Although foreign investors have played a role in influencing sentiment in Nigeria, last year they accounted for only about 12 per cent of the value of transactions, limiting their potential to cause havoc with a hasty retreat. Nigerian banks are, however, concerned that the credit crunch will make it harder to secure credit lines in the US and Europe for trade finance, a bread and butter business for banks in an economy which imports about $30bn of goods a year. So here lies the problem, the fact that our banks are living dangerously is obvious. By far the biggest worry is how banks will manage their losses in the local market. Much of last year’s stellar gains were driven by banks lending money for share purchases which have now turned sour. The central bank said last week it would let banks reschedule capital market-related exposure until the end of 2009, suggesting some have been pleading for a reprieve. The government limited the maximum daily downward stock price movement to one percent in August, but investors say the measure has only undermined confidence further.
Some hope Nigeria’s government – sitting on top of $63bn of foreign exchange reserves – will back some form of market-making mechanism to restore local liquidity, regardless of what happens on Wall Street. The truth still is that we may not be able to do that not because of the fear of inability but that we just lack the will. And even where the will exist, there is too much in terms of interest, especially in a money based economy like ours. The truth is always not pretty… Investors at the Nigerian Stock Exchange (NSE), have continued to intensify interest in the bond market due to the dominance of the bears in the market. Meanwhile, Over-the-Counter (OTC) bond market segment of the Exchange, recorded a turnover of N1.07 trillion in 9,349 deals as at the end of September 2008. A breakdown of the weekly activities of the OTC bond in the period under review indicated that investors for the week ended September 5, traded a turnover of 304.8 million units, worth N301 billion recorded in 2,502 deals. The most active bond measured by turnover volume during the period was the 4th FGN Bond 2014 series 11 with a traded volume of 42.4 million units valued at N417 billion in 420 deals. My friend asked an intriguing question, and it was how the above puts a plate of garri and egusi soup on the table. Nigerians are concerned with Amala Street, Tuwo corner, stew junction, they want to feed and feed well. Prince Charles Dickson
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