A recent declaration by the Attorney-General of the Federation and Minister of Justice, Mr. Abubakar Malami, that difficulties in the nation’s forex market were as result of unethical struggles by “unscrupulous elements hiding under the cloak of market forces” signalled an urgent need for the government to devise appropriate
managerial tools to decisively deal with such irredeemably greedy capitalists whose negative impacts on the economy are more destructive than Boko Haram insurgents.

The Nigerian currency, the Naira, exchanges for about N321-330 to $1 at the parallel market. Malami, who branded the forex manipulators as “economic terrorists,” said certain disturbing developments confirmed the initial suspicion of government that the currency was being deliberately undermined. He alleged that the elements, having failed in their attempts to force devaluation of the naira, aligned to create an artificial currency situation whose primary purpose was to undermine the economic programme of President Muhammadu Buhari’s administration.

Public affairs analysts, who spoke to the Economic Confidential, have thrown their weights behind Malami, arguing that the economic terrorists are not limited to forex market but are ubiquitous across various sectors of the economy.

For instance, financial rascality uncovered recently in the Central Bank of Nigeria (CBN) involving some top officials of the apex bank is affront. An annual national budget is simply the article of faith for every nation that imbibes it; hence the culprits who paddeed 2016Appropriation Bill might have done so to put Nigerians’ destiny in a shambles.

Listing the immediate consequences of the artificial circumstance created in the market, the AGF observed that: “We are witnessing manipulative and coordinated speculative activities in the foreign exchange market leading to the current wide differential between the official rate at the Central Bank of Nigeria and the parallel market rate, respectively; in a manner that defies rational economic analysis.

“These nefarious speculative activities exert further pressure on the Naira exchange rate and have created a very wide artificial differential between the aforesaid two rates which are now being exploited by unscrupulous individuals and institutions.”

Unveiling the self-centered strategies some individuals are using to manoeuvre the forex, Malami mentioned round-tripping of foreign exchange sourced from the Interbank Market, rendition of false foreign exchange utilisation data, non-repatriation of export proceeds, among others.

Besides, the AGF said government is aware of the insidious activities of certain cabal within some strategic national institutions, who rather than exert their regulatory powers, have chosen to use their accomplices within the system to manipulate the foreign exchangemarket for personal corrupt gains to the detriment of the national economy.

He said measures are already in place to deal with the infractions decisively, adding that relevant security agencies are on the red alert to investigate and prosecute the culprits.

On public outcry for the government to reject calls for devaluation of the currency, the AGF said “the government has also been assailed by calls from several quarters to adopt the theoretical policy response of devaluating the Naira, in order to absorb the demand pressure of the currency.”

However, he notes, “it is counter-productive and has the potential to cause even more dislocations in the economy, particularly against the backdrop of our current status as a largely import-dependent economy.”

The economy’s observers, however, contend that financial rascality and administrative manipulations would hinder the pace at which the present administration wants to revive the economy, citing the instance at which some unscrupulous administrative officials arehandling government’s business.

They also cited the crisis that ensued over the unbundling of the Nigerian National Petroleum Corporation (NNPC) as a typical selfishness. The economic growth, they said, requires all the citizens to put national interest above individuals’ interest.

Despite the odds in the forex market and oil politicking the economy has been contending with, Nigeria’s aggregate Gross Domestic Product (GDP), when analysed in nominal terms at basic prices, rose to N25, 930,469.41 million at the end of fourth quarter (Q4), last year, as against the N24, 205,863.34 million it recorded at the end of 2014.

When compared to the Q4’s 2014 value, the nominal GDP increased by 7.12 per cent points as at the end of Q4, 2015 and the nominal GDP growth was also higher relative to growth recorded in Q3 of 2015 by 1.11 per cent points.

A report on the nation’s GDP as at the end of the quarter under review (Q4) by the National Bureau of Statistics (NBS) indicated that the GDP recorded 2.11 per cent growth rate in the quarter compared to 2.84 per cent growth rate recorded in the preceding quarter. (Q3). The growth rates for the first and second quarters of the year were 3.86 per cent and 2.35 per cent, respectively.

A further analysis of the statistical agency’s report showed that the Q4 growth rate was lower by 0.73 per cent relative to the growth recorded in the preceding quarter and by 3.83 per cent in the corresponding quarter of 2014.

The NBS reported that growth in Q4 was largely driven by the nonoil sector, which contributed 91.94 per cent to the nation’s GDP in real terms. Specifically, it said growth in the non-oil sector depended largely on activities of trade, crop production, information andcommunication, other services and real estate.

According to the Bureau, the non-oil sector grew by 3.14 per cent in real terms in the quarter under review, representing a rise of 0.08 per cent up from the Q3 of 2015 growth estimates, but lower by 3.30 per cent of the corresponding quarter in 2014.

Economic Confidential observes that if the gradual rise in prices of crude oil in international market, as observed since March, is sustained and high daily production volume is achieved, oil revenue in 2016 first quarter would be appreciable.

However, the oil sector growth in the quarter under review contracted, as daily oil output fell to 2.16 million barrels per day (mbpd) in the fourth quarter or 0.3 per cent lower than the 2.17mbpd produced in Q3 of 2015.

The NBS reported that oil production was also lower relative to the corresponding quarter in 2014 by 1.0 per cent while output stood at 2.19mbpd.

The Bureau also stated that real growth of the oil sector slowed by 8.28 per cent (year-on-year) in Q4 of 2015, representing a decline of 1.18 per cent relative to growth recorded in Q4 of 2014. It also noted that growth also declined by 9.33 per cent relative to growth in Q3 of 2015, while quarter-on-quarter, growth also slowed by 19.10 per cent.

Despite its sluggish performance, the Bureau reported the oil sector contributed 8.06 per cent of total real GDP, down from figures recorded in the corresponding period of 2014 and in Q3 of 2015 by 0.91 per cent and 2.21 per cent respectively.

Recent disintegration of the corporation by the government into seven units of upstream, downstream, refining, gas and power, the ventures groups, finance and services generated a lot of ripples with oil and gas unions accusing the Minister of State for Petroleum Resources, Dr.  Ibe Kachikwu of inconsistency.

For instance, the Abuja branch chairman of National Union of Petroleum and Natural Gas Workers (NUPENG), Odudu Benjamin Udofia, said the government in embarking on the restructuring disregarded the need for engagement with stakeholders in the corporation.

He said: “The whole process has been shrouded in secrecy for a long period without involving or carrying any of the stakeholders along. Due to lack of proper consultations, there are flaws in the final structure that could have been avoided.”

The union leader argued that “the in-house unions are suspicious of the intent of the present unbundling as nobody could explain its direction.”

“This development even becomes clearer with the consolidation of operational units with heavy financial transactions under the office of the GMD. This include Nigerian Petroleum Investment Management Services (NAPIMS), Crude Oil Marketing Department (COMD), and crude oil trading, even the corporate social responsibility that is primarily the duty of the Group Public Affairs Department has been
moved to the GMD’s office.”

Debunking the allegations, Kachikwu said: “The problem is Kachikwu has ignored a lot the internal politicking and remained focused on transforming NNPC, but there are many who would rather that the status quo remains unchanged. So they are the ones that are fully in support of the strike in order to create problems for him and get him out of the way.”

Kachikwu, who spoke with State House correspondents in Abuja after the Federal Executive Council (FEC) meeting, last month, said “NNPC has not been unbundled in the sense of breaking up NNPC into distinct institutions.

“The NNPC is still a whole. There is nothing new that has happened. I have tried to explain this and I am sure NNPC workers are members of one family, they will understand.”