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Budget Crisis Puts Foreign Investments on Hold

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Nigeria investment

Following the controversy over the alleged padding and errors in the 2016 Budget, some corporate economics have raised concern on the implication for national economy recovery and foreign capital inflow.

Sunday Vanguard learnt that some Nigerian companies that have been in talks with their foreign partners over counterpart funding of joint ventures have been forced to hold action since mid last year over policy uncertainties following the election of new government.

While many of them expressed satisfaction with the process and outcome of the election, they were non-committal over prospects of funding their Nigerian investments preferring to wait for a clear policy direction from the new government. The first shock was the long delay in rolling out the cabinet which elongated policy positions while also elongating the waiting time for foreign investors’ commitments.

Economy observers were of the view that while there is massive decline in government revenue following the oil price crash, 2016 Budget, which provided for massive economic stimulus, gave hopes of economic recovery amidst the dwindling revenue.

However, a top executive of a Nigerian company whose foreign partners have adopted the waiting position, told Sunday Vanguard, at the weekend, that the companies had thought they would wait for about three months after the take-off of the new government but lamented that ‘’we are now in the tenth month and our partners are still saying they will wait for some more time”.

According to him, the on-going controversy over the 2016 Budget has further complicated the relationship with their partners and the fate of the joint venture as they had hoped that the budget, which they saw as a good one with clear policy positions, appears to have run into a glitch.

Analysing the situation further, chief economist at FSDH Merchant Bank, Mr. Ayodele Akinwunmi, said the controversy over the budget creates more uncertainty for investors who had delayed their decision up till now.

‘’It may also delay the implementation of the projects in the budget which will not make an average Nigerian to feel the impact of the current government,”Akinwunmi said.

However, another notable economist, Mr. Bismarck Rewane who is the Managing Director/Chief Executive, Financial Derivatives Company, is more concerned with the assumptions of the budget which he sees some problems than the issue of errors which he believed would easily be resolved.

‘’The errors in the budget are not an issue, they can be corrected. The real issues are the assumptions of the budget. The crude oil price, the production target, exchange rate and inflation rate, these are the real issues, that determine the effectiveness of the budget,”Rewane stated.

In the same line of argument, the Deputy President of Nigerian Labour Congress, Mr. Issa Aremu, pointed out: ‘’The President has said they (errors) would be corrected, and those responsible would be punished. What we should be concerned about is if the budget would be used to boost the economy and then strengthen the Naira. Will the budget be used to boost local production through patronage of locally produced goods, or it would be spent on imported goods and hence weaken local production? These should be our concerns’’.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Business

Ndubuisi Ekekwe Moves to Deepen Capabilities Through Free Weekly Business Lessons

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Ndubuisi Ekekwe

In a bid to deepen business and individual capabilities across the African continent, Prof. Ndubuisi Ekekwe, Founder of Fasmicro and the Lead faculty, Tekedia Institute, on Sunday said he will commence free business lessons to enhance accumulation of capabilities.

In a message forwarded to all members of the platform, Tekedia.com, Prof. Ekekwe, explained that when businesses accumulate capabilities, they move upstream and create new competitive tentacles which eventually form the foundation of their growth.

More so, because of the capabilities, they protect their market shares through strategic moats against competitors and new entrants,” he stated.

Prof. Ekekwe plans to send out two business lessons per week to engage Tekedia’s growing community on the mechanics of business systems. “Each piece would be prepared to pass across a business lesson.”

Prof. Ndubuisi Ekekwe writes regularly in the Harvard Business Review and has spoken at global events — explaining and teaching the mechanics of business systems and nation-building.

To start receiving his free business lessons sign up here.

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FG Introduces NEXIT Portal for Npower Batch A and B Beneficiaries

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The Federal Government has introduced a new online portal for exited Npower beneficiaries of batch A and B.

According to the Minister for Humanitarian Affairs, Sadiya Farouq, the portal was launched in collaboration with the Central Bank of Nigeria (CBN) to enable exited Npower beneficiaries apply for available federal government empowerment options.

This was disclosed in a statement issued by Nneka Anibeze, the media aide to the minister, on Friday.

The ministry said the NEXIT portal will be used to determine the suitability of exited beneficiaries for various CBN-affiliated programmes.

She explained that selection will be based on the conditions and criteria set by the apex bank.

Ms Farouq, therefore, urged interested exited Npower beneficiaries to log on to the NEXIT portal and provide the required additional information for possible placements into central bank’s intervention options.

The Minister expressed her deep appreciation to the CBN Governor Mr Godwin Emefiele CON for his support adding that the Ministry of Humanitarian Affairs remained committed to the vision of Mr President to lift 100 million Nigerians out of poverty in the next 10 years.

“Minister Umar Farouq pledged the Ministry’s willingness to collaborate with relevant agencies of government and other stakeholders towards the realization of that vision and congratulated the exited beneficiaries while wishing them well in their future endeavours.

“The Federal Government of Nigeria is very proud of the milestones you have achieved during your period of service to the nation. As we prepare to exit into prospective endeavours.”

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Ellah Lakes Partner Ondo State Government to Develop Oil Palm, Cassava in the State

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The management of Ellah Lakes Plc said it has partnered with Ondo State Government to develop and manage 5000 hectares of land for the purpose of cultivating oil palm and cassava in Ondo State, Nigeria.

The company stated in a statement signed by Kenechi Ezezika, Company Secretary, Ellah Lakes Plc.

Speaking on the development, the Chief Executive Officer, Chuka Mordi said: “This is a significant landmark for the Company in the development of our landbank, & we are very excited to be working with ODSG.

I am delighted that we are fulfilling our strategic objective of progressively expanding our land bank & diversifying our portfolio and production base. I am also glad to say that the intercropping programme in Edo State is progressing steadily & we have achieved our first milestone of 100Hectares of Cassava with the participation of personnel of the Agricultural Development Program (ADP), in Edo State”.

The Special Adviser on Development & Investment to the Ondo State Governor/ Chief Executive Officer of Ondo State Development and Investment Promotion Agency (ONDIPA), Mr. Akinboye Oyewumi, who also spoke on the development said: “We are pleased with this collaboration with Ellah Lakes Plc., and we look forward to a mutually beneficial, valuable and fruitful venture.”

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