Prior to the 2015 general elections, many Nigerians believed that the current administration led by President Muhammadu Buhari could bring succour to the citizens in that regard, but that still remains to be seen.
Worst still, the nation’s foreign reserves continued their downward slide, falling by $200 million as recent data obtained from the Central Bank of Nigeria’s (CBN) website showed.
According to the data, the reserves, which stood at $27.54 billion as at April 11, 2016, had fallen to $27.34 billion by April 19, 2016. The banking watchdog’s website shows that the reserves stood at $27.858 billion on April 1.
As the reserves continued their downward slide, the amount of dollars the CBN allocates to commercial and merchant banks dropped to $177,876,814 compared with the $189,489,057 it allocated in the preceding weeks.
The Nigerian National Petroleum Corporation (NNPC) recently announced that International Oil Companies (IOCs) in Nigeria had agreed to provide about $200 million to help fund fuel imports as part of measure to end fuel shortage across the country.
The Minister of State for Petroleum, Mr. Emmanuel Kachikwu, was quoted by agency reports as saying, “I have been able to convince the upstream oil companies to provide foreign exchange buffers over the next one year for those who’re bringing in products.”
“Total SA and Exxon Mobil Corp. will provide dollars to their local retails units, Total Nigeria Plc and Mobil Oil Nigeria Plc, while Royal Dutch Shell Plc has been paired with local oil importer Conoil Plc and Eni SpA with Oando Plc,” he said.
Companies importing fuel in Nigeria have been hindered by lack of access to foreign exchange, following the plunge in the price of oil, the main foreign income earner in Africa’s largest oil exporter. Also, in a move, which some analysts believe will help to reduce the pressure on the dollar in the forex market, the CBN and the Industrial and Commercial Bank of China Ltd (ICBC), the world’s biggest lender, signed a deal on Yuan transactions during President Buhari’s trip to China, last month.
“It means that the Renminbi (Yuan) is free to flow among different banks in Nigeria, and the Renminbi has been included in the foreign exchange reserves of Nigeria,” Lin Songtian, the Director-General of the African Affairs Department of China’s Foreign Ministry, told reporters.
The CBN has also said it plans to diversify its foreign exchange reserves away from the dollar by switching a stockpile into Yuan. It converted up to a tenth of its reserves into Yuan five years ago.
Recently, handlers of the nation’s economy organised an economic summit to address the challenges facing the economy. Themed “The Dawn of A New Day,” the two-day event held at the Intercontinental Hotel, Lagos. In attendance were government officials, industry, business leaders, international investors, economists and academics.
For both days of the summit, the issues discussed revolved round economic growth, the ease of doing business, economic diversification, technology, infrastructural development and global partnerships.
During panel discussions, experts rendered their opinions on what will help the country surpass the current narrative on its economy.
However, representatives of local traders, Nigerian youths and small business owners were conspicuously missing at the event and several Nigerians have expressed grievances on the exclusion of these vital economic stakeholders.
As the Buhari administration had earlier indicated, economic diversification is a major exploratory sector for the government given the current fall in oil prices. Dangote is an avid supporter of economic diversification as he maintains the time to do so is now.
Consequently, the Minister of Industry, Trade and Investment, Okechukwu Enelamah, said the country will benefit greatly from agriculture and solid minerals (that is when they start meeting directly with those who can facilitate the process of exploration).
However, power seems to be the most severe barrier to growth in the Nigerian economy. When put against reputation, security and foreign exchange policy, power topped the barriers. This is as a result of obvious reasons; more than 50 per cent of Nigerians do not have access to stable power supply, many businesses in the country survive mainly on fuel-consuming generating sets.
In terms of technology, Nigeria has recorded laudable progress in advancing its technologies; however, indicators point to the fact that the digital sector still needs constant upgrade before it can begin to improve the living conditions of the citizenry on a large scale. A 2016 report by the Economist is reflective of this school of thought.
“While digital technology has clearly helped Nigeria’s economic diversification, its fruits are unevenly distributed. Large swathes of the population are struggling to access the benefits of digital technology in an affordable way, and national data on digital usage, when disaggregated by income levels and geographies, shows significant inequalities,” says the report.
While discussing education and the challenges facing the nation’s education sector, the Borno State Governor, Kashim Shettima, who is an agricultural economist, said public schools need to be revitalised.
He also said his administration is focused on providing platforms for the empowerment of women and girls in the state, adding that there is a great disconnect between the leaders and the led in the country.
Speaking to Economic Confidential, Femi Fagbemi, an economist, said “until Nigerians are ready to accept reality and proffer solutions going forward, the country will continue to remain in this mess.”
For him, you cannot have people who are at the helm of affairs of a country like Nigeria without sincerity of purpose and expect some good to come out of them. Continuing, he said “until our leaders are able to face reality by way of prosecuting corrupt politicians without sentiments, the economics problems cannot be solved.”
Speaking further, the economist noted that “Nigeria has the potential to stand tall amidst their global counterparts, but that can only be achieved when professional with sincerity of purpose who are not partisan fellows are giving the opportunity to bring on board what God has endowed them with; until that is done, Nigeria will continue revolve round the circle of economic mess.”