- A new report from Bismarck Rewanehighlights the issues confronting the Nigerian economy.
- Rewane a member of President Muhammadu Buhari's Economic Advisory Council (EAC), is concerned that investors are becoming skeptical about Nigeria
- According to him, the country is going through excruciating pains as a result of rising insecurity and structural issues
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Renowned economist and Managing Director, Financial Derivatives Company Limited (FDC), Bismarck Rewane, has detailed the challenges bedeviling the Nigerian economy.
In a report titled “Distracted Leaders and Conflicted Policymakers,” Rewane that the spate of insecurity in the country was tapering prospective foreign direct investments (FDI) inflows.
He noted that the FDIs in Nigeria dipped to a 5-year low by 32.14 percent to $698.8 million in 2021 and it is a real concern.
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“Political uncertainties making investors tread cautiously. Capital imports are dominated by hot money (Foreign Portfolio Investments are 50.6% of total capital imports).
"Businesses are gasping under energy cost (diesel, etc.) spike, rise in logistics costs, rise in the cost of importing raw material and capital goods, multiple taxation, new taxes introduced, shortage in forex supply and parallel rate hikes; investment drag due to rising uncertainties, kidnapping, banditry, protests, secessionists agitations; supply chain disruptions, infrastructural decays, tax inefficiencies, forex hassles, among other structural difficulties."
Other challenges listed
ThisDay reports that the economist further stressed that the country’s low-interest rates amid rising inflation widened negative real rates of return.
"Investors are skeptical as debt level climbs. Total public debt up 20 per cent to N39.56 trillion in 2021 from N32.92 trillion in 2020. The federal government is still cash strapped despite increase in oil prices.
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“Oil production suboptimal leading to capping impact of higher oil prices. Swap deals also tapering oil revenue. Tax revenues slowing on hostile business environment. The Federation Account Allocation Committee (FAAC) disbursements are down by 10.67 per cent to N621.68 billion in first quarter 2022 from N695.94 billion in the fourth quarter of 2021."
Rewane also painted a tougher picture for the Nigerian government over rising subsidy payments.
Owing to this, he stated that there would be dis-savings as the negative real rate of return increases.
He predicted that the Central Bank of Nigeria was likely to adopt a tighter monetary policy stance to contain inflation and would most likely push up lending rates.
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Meanwhile, some Nigerian celebrities have lent their voices to that cries of hardship as we all look forward to the ease of running businesses and living normal lives.
In the last few weeks, Nigerians have been subjected to hard life through fuel scarcity, the collapse of the national grid resulting in a national blackout, Academic Staff Union of Universities (ASUU) strike among others.
In this article, Legit.ng takes a look at some Nigerian celebrities who have said some things about the current situation.