Bloomberg, a privately owned financial software, data, and media company<\/p>\n
based in New York City, has said that President Muhammadu Buhari
\nadministration is a disappointment so for it inability to turn around
\nNigeria\u2019s economy since he assumed office in May 29.<\/p>\n
It said when Muhammadu Buhari clinched victory in presidential
\nelections in March, stocks soared as investors looked to the former
\nmilitary ruler to reverse decades of economic mismanagement and policy
\ninertia. However hopes have fizzled over his ability to turn around
\nAfrica\u2019s largest economy and oil producer.<\/p>\n
\u201cMoney that flowed into stocks and bonds in the West African nation,
\nwhich McKinsey & Co. says could become one of the world\u2019s 20 biggest
\neconomies by 2030, is now fleeing as growth prospects diminish along
\nwith oil prices,\u201d Bloomber said. \u201cWhile Buhari, 72, has prioritized
\nstamping out the graft that has plagued Nigeria since independence
\nfrom Britain in 1960, policy-making appears as uncertain and haphazard
\nas ever.\u201d<\/p>\n
Quoting Ayodele Salami, a chief investment officer of London-based
\nDuet Asset Management Ltd, who oversees about $500 million of African
\nequities, Bloomberg said \u201cafter the initial euphoria, Nigerians have
\nbecome disillusioned.\u201d<\/p>\n
\u201cHe would probably say that he\u2019s being deliberative and cautious. But
\nwe expected more.\u201d Duet\u2019s Africa fund has cut its investments in the
\ncountry to about 24 percent of the total from 38 percent in the last
\nyear.<\/p>\n
\u201cBuhari waited five months before naming his cabinet, hasn\u2019t proposed
\na clear plan to revive growth and backed foreign-exchange controls
\naimed at defending the naira. His retention of gasoline subsidies,
\nplans to raise spending in the face of declining revenue and silence
\nabout a $5.2 billion fine levied on mobile-phone operator MTN Group
\nLtd. have added to investor unease.\u201d<\/p>\n
Bloomberg said: \u201cNigeria\u2019s benchmark stock index has plunged 22
\npercent since reaching a year-high on April 2, the day after Buhari
\nwas declared the winner of the presidential race against incumbent
\nGoodluck Jonathan. That\u2019s the third-worst performance globally in the
\nperiod, after the bourses in Ukraine and Egypt. The index advanced
\n12.5 percent in the two days after Jonathan conceded.\u201d<\/p>\n
Buhari inherited depleted government coffers and a bureaucracy that
\nmultiple probes have blamed for looting billions of dollars of oil
\nrevenue. The president has said he delayed appointing ministers
\nbecause he needed time to vet suitable candidates.<\/p>\n
The break has compounded the pain caused by the slide in the price of
\ncrude, which accounts for two-thirds of government revenue and 90
\npercent of export earnings. Growth, which averaged 6.3 percent
\nannually over the past decade, is set to slow to a 16-year low of 3.3
\npercent this year, according to the median estimate of 15 economists
\nsurveyed by Bloomberg.<\/p>\n
Many filling stations ran dry this month as the government withheld
\nfuel subsidies to suppliers, preventing them from restocking.
\nLengthening lines forced Buhari to ask lawmakers for permission to pay
\n413 billion naira ($2 billion) in overdue payments, an amount that
\nhadn\u2019t been budgeted for.<\/p>\n
While next year\u2019s budget has yet to be finalized, Buhari wants to
\nraise spending by 56 percent, according to a person who attended a
\nbriefing on the government\u2019s plans and asked not to be identified
\nbecause the matter is private. Vice President Yemi Osinbajo says the
\ngovernment plans to spend its way out of a slowing economy and that an
\ninfrastructure fund will be created with public and private financing.<\/p>\n
The penalty imposed on MTN\u2019s Nigeria unit last month for failing to
\nregister about 5 million subscribers may be an attempt to plug the
\nhole in government finances, according to Cobus de Hart, an economist
\nat NKC Independent Economists. \u201cYou cannot deny there might be a
\nfiscal element to the massive fine,\u201d he said by phone from Paarl, near
\nCape Town. \u201cIt will make investors a little bit more wary of investing
\nin Nigeria.\u201d<\/p>\n
An even bigger concern for many investors is the authorities\u2019 naira
\npolicy. The Central Bank of Nigeria, with Buhari\u2019s backing, has burned
\nthrough $4.3 billion of reserves this year and choked off supply of
\nforeign exchange to banks and their customers to defend the naira,
\neven as major oil exporters such as Russia and Colombia have let their
\ncurrencies slide. The restrictions prompted JPMorgan Chase & Co. to
\nremove Nigeria from its local-currency emerging-market bond indexes,
\ntracked by more than $200 billion of funds, in September, triggering a
\nselloff in the nations\u2019 assets.<\/p>\n
While the naira has been all but fixed at about 198 to 199 per dollar
\nsince March, forward prices suggest it will drop by almost one-fifth,
\nto 243.5, in a year.<\/p>\n
\u201cThe number-one issue is the exchange rate,\u201d Andrew Howell, a
\nCitigroup Inc. frontier markets strategist, said from Lagos. \u201dAccess
\nto foreign exchange is becoming a widespread problem.\u201d<\/p>\n
Buhari has won plaudits from leaders including President Barack Obama
\nfor his efforts to tackle graft. He replaced the management of the
\nstate oil company, which was accused of withholding billions of
\ndollars from the government, and has stepped up the fight against an
\ninsurgency being waged by Islamist group Boko Haram.<\/p>\n
\u201cThe degree of transparency we\u2019re starting to get with the new
\nadministration is hugely positive,\u201d Douglas Rowlings, an analyst at
\nMoody\u2019s Investors Service, said in an interview in Lagos. \u201cIt gives
\ninvestors the perception that operating in Nigeria will now be done
\nfollowing proper procedures.\u201d
\nhead of research at Ashmore Group Plc, which oversees almost $60
\nbillion of emerging market assets, Jan Dehn, remains unconvinced that
\nBuhari is up to the job. The fund manager sold all its Nigerian
\ngovernment debt in the past year.<\/p>\n
\u201cSo far the Buhari administration has done all the wrong things,\u201d Dehn
\nsaid by phone from London. \u201cNot only has he been incredibly slow in
\ntaking any action, when he finally has taken action on the economic
\nfront it\u2019s been diametrically opposed to sensible policy. That is a
\nmajor disappointment given expectations prior to his election,\u201d he
\nsaid.<\/p>\n","protected":false},"excerpt":{"rendered":"
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