Connect with us

Markets

Sluggish Economy Haunts Nigerian President at Ballot Box

Published

on

General Images Of Residential Property
  • Sluggish Economy Haunts Nigerian President at Ballot Box

Timi Soleye returned home to Nigeria from the United States to set up a gas logistics business six years ago, encouraged by predictions of growth and an expanding middle class.

Three years later, Nigeria plunged into its first recession in a generation following a sharp fall in the price of oil, which accounts for 90 percent of its foreign exchange earnings.

Infrastructure projects on which Soleye’s business relied were shelved. He kept afloat by doing consultancy work, but others weren’t so lucky.

“I know lots of people whose companies shut and laid people off,” said Soleye, a 31-year-old Harvard graduate and president of CRYO Gas and Power.

Soleye didn’t bother to vote in 2015. But this year, he says he has a reason to do so: he doesn’t want President Muhammadu Buhari to win a second term on Feb. 16. “Enough is enough,” he said.

Buhari’s critics accuse him of failing on a number of issues, including promises to tackle corruption and defeat an Islamist insurgency that has killed thousands since he took the helm of Africa’s most populous nation. But his handling of the economy could cost Buhari more votes than any other issue.

Although Nigeria returned to growth in 2017, the economy expanded by 1.9 percent in 2018, compared with 5.5 percent when Soleye returned to Nigeria in 2013.

Inflation has been in double digits for the last three years, rising to a seven-month high of 11.4 percent in December. And nearly a quarter of the workforce – 23.1 percent – is unemployed, up from 18.1 percent a year earlier.

“People are still worse off after four years in power,” said Charles Robertson, chief economist at Renaissance Capital.

“It’s not all Buhari’s fault. It’s mainly to do with oil. But nonetheless, it’s made it difficult for people to be positive about the economy.”

For Clement Nweke, who sells electrical appliances in a Lagos street market, the last few years have been hard. Inflation and a weaker currency mean 100,000 naira ($330) will only buy one of his air conditioning units, compared with three back in 2015.

“The purchasing power from the public is lower,” he said. “It affects my own business because I don’t push out the many (units) I used to.”

Buhari’s main rival, businessman and former vice president Atiku Abubakar, has zeroed in on the issue.

“Get Nigeria working again,” is his campaign slogan.

He has vowed to double the size of the economy to $900 billion by 2025, mainly by giving a larger role to the private sector.

Buhari argues that the way to bigger growth is through infrastructure development, touting railway and road construction.

But many business leaders doubt he can fix the economy, saying their companies have been hurt by government efforts to help the poor.

“In their quest for what they call affordability, they have essentially price regulated a huge bevy of things, and they do not see that, ironically, it makes things more expensive,” said Soleye.

He said a decision to fix energy tariffs for three years meant that while customers were getting cheap electricity, crippling debts were piling up in Nigeria’s power sector.

Those debts have held up construction of new plants for which Soleye’s company would have provided gas storage and pipelines.

IMPORT RESTRICTIONS

Another often-cited example is the government’s decision to ban rice imports through its land borders in 2015. Instead, the government subsidised tractors, mills and fertiliser and arranged cheaper loans to boost domestic rice production.

But farmers struggled to meet demand, hampered by poor roads to bring their harvest to market and inadequate power for storage facilities. Prices soared.

The only people who did well were smugglers, said Rotimi Williams, who owns a rice farm in the central state of Nasarawa.

“The cost of production of local rice has increased, which means that people are going for cheaper imported rice,” he said.

He blames protectionist policies for Nigeria’s galloping inflation.

The government says it is trying to wean the economy off its reliance on oil sales by encouraging domestic production of everything from wheat to cars.

Some local businesses have profited. Etop Ikpe, CEO of Cars45, an online marketplace for used vehicles, said a decision to increase a tariff on imported vehicles from 20 to 70 percent in 2015 “provided an opportunity”.

“People couldn’t afford brand new cars or imported used cars,” he said.

But as with rice, the Nigerian ports authority reported a surge in car smuggling from neighbouring Benin, and local assembly did not pick up.

GOOD TERM?

Buhari’s supporters point out that Nigeria rose 24 places to 145 in the World Bank’s ease of doing business ranking in 2017, largely due to government efforts to cut red tape, including issuing visas on arrival and establishing a centralized electronic system to pay federal taxes.

“One good term deserves another,” says an electronic billboard for Buhari in the Lagos business district of Victoria Island.

How voters respond may depend on whether they believe they will be better off with Atiku, who as vice president from 1999 to 2007 oversaw the liberalisation of Nigeria’s telecommunications industry.

Foreign investors have welcomed his pledges to float the naira, overhaul the central bank, privatise the state oil company and create a $25 billion fund to support private sector infrastructure investment.

The central bank, with Buhari’s backing, imposed currency restrictions in 2015 to defend the naira, rejecting bankers’ advice to float the currency as some other oil exporters had done. The following year, the naira lost a third of its value, and many investors fled.

Capital imports into Nigeria, which stood at $21.32 billion in 2013, fell to $5.12 billion in 2016, before rising to $12.2 billion as the country emerged from recession in 2017.

“If we want to see the unemployment rates coming down and certain initiatives that will boost growth, primarily it will be private sector driven,” said Boye Olawoye, group managing director of investment bank Primera Africa.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

Continue Reading
Comments

Energy

How Nigeria’s National Power Grid Collapsed Ten Times Within 9 Months 

Published

on

power project

The national power grid has again collapsed, leaving many Nigerians in total darkness.

Investors King can authoritatively report that this is the tenth time the power grid will be disrupted this year alone.

For this recent collapse, the grid, reportedly lost power generation around 1:39 pm on Tuesday.

Information revealed that power generation was 2,711 megawatts as of 1:00 pm, having previously peaked at 3,631 MW.

Earlier, power generation peaked at 3,934.77 MW around six o’clock in the morning.

However, between 2 pm and 3 pm, hourly generation dropped to 0.00 MW.

The Transmission Company of Nigeria confirmed that the national grid experienced a partial disturbance at about 1:52 pm on Tuesday, 5th November 2024.

TCN spokesperson Ndidi Mbah mentioned that the recent collapse was due to a series of line and generator trippings that caused instability in the grid and, consequently, the partial disturbance of the system.

Mbah pointed out that data from the National Control Centre revealed that a part of the grid was not affected by the bulk power disruption.

TCN however indicated that work work is in progress to restore power.

She explained that engineers are already working to quickly restore bulk power supply to the states affected by the “partial disturbance.”

Mbah noted that presently, bulk power supply has been restored to Abuja at 2:49 pm, maintaining that “we are gradually restoring it to other parts of the country.”

She apologized to Nigerians for whatever inconvenience the collapse might have caused.

Findings by Investors King revealed that the grid had collapsed at ten different times between March and November, this year.

Times the grid collapsed included February 4, March 28, April 15, July 16, two times in August 5, October 14, October 15, twice in October 19 and now today, November 5.

Continue Reading

Energy

Darkness Falls Again: TCN Explains Latest National Grid Collapse

Published

on

The Transmission Company of Nigeria (TCN) has provided an explanation for the latest National Grid collapse, which occurred on Tuesday, November 5.

Tuesday’s collapse, marking the 10th in 2024 alone, left Nigerians in total darkness.

Recall that the National Grid collapsed twice in October, sparking concerns among Nigerians.

Reacting to the latest collapse via a statement on Tuesday, the General Manager of TCN Public Affairs, Ndidi Mbah, disclosed that the collapse happened at 1:52 pm.

The GM revealed that the grid collapse was caused by line and generator trippings.

Mrs. Mbah said, “TCN states that the national grid experienced a partial disturbance at about 1:52 pm today, 5th November 2024.

“This followed a series of line and generator trippings that caused instability in the grid and, consequently, the partial disturbance of the system.

Data from the National Control Centre (NCC) revealed that a part of the grid was not affected by the bulk power disruption.

Mbah disclosed that operators are working to restore power in affected states, adding that power was restored in Abuja.

She explained, “TCN engineers are already working to quickly restore bulk power supply to the states affected by the partial disturbance. Presently, bulk power supply has been restored to Abuja at 2:49 pm, and we are gradually restoring power to other parts of the country.”

Apologizing to Nigerians, TCN said, “We sincerely apologize for any inconvenience this may cause our electricity customers.”

Investors King, in an earlier report, revealed that in an attempt to address the persistent collapse of the national grid, the Nigerian Electricity Regulatory Commission (NERC) announced that discussions were underway with Independent Operators to take over the management of the grid.

Continue Reading

Energy

Nigeria Partners with ECOWAS and Morocco to Launch $26B African Gas Pipeline

Published

on

Gas-Pipeline

The Nigerian government, in partnership with the Economic Community of West African States (ECOWAS), Morocco, and Mauritania, has announced plans to advance the $26 billion African Atlantic Gas Pipeline project to drive economic growth across Africa.

This development was revealed on Monday, November 5, by Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), at the ECOWAS Inter-Ministerial Meeting on the Nigeria-Morocco Gas Pipeline Project.

Speaking at the meeting, which was attended by ECOWAS Ministers of Hydrocarbons and Energy as well as representatives from Morocco and Mauritania, Kyari stated that, once completed, the project will connect 13 African countries.

Represented by Olalekan Ogunleye, NNPC’s Executive Vice President for Gas Power & New Energy, Kyari said this will be Africa’s largest pipeline project.

Ogunleye confirmed that progress has been made with the front-end engineering design completed, the phase two study finalized, and work ongoing for environmental and social impact assessments as well as land acquisition and resettlement.

He emphasized NNPC’s readiness to execute the project: “Today, we come together to make significant progress in the African Atlantic gas pipeline project, which is a transformative initiative connecting at least 13 African nations in shared prosperity and development. These achievements underscore our capability to deliver this landmark project, supported by strong regional collaboration.”

Ekperikpe Ekpo, Minister of State for Petroleum Resources (Gas), described the project as a game-changer for the regional economy, stating, “We stand at a critical juncture where these agreements can reshape our energy landscape, strengthen our economies, and uplift our people.”

He also highlighted that the project will increase Africa’s presence in the global gas market, noting that “the agreements demonstrate a strong commitment to advancing hydrocarbon and energy trade across ECOWAS, enhancing access to natural gas in West Africa, and expanding Africa’s global footprint in the gas market.”

Continue Reading

Trending