LBS EXECUTIVE BREAKFAST SESSION – APRIL 2022 (Re: Distracted Leaders & Conflicted Policy Makers)

Dear Subscriber,

Many are called but few are chosen.

…In today’s Nigeria, there is no middle class. If you don’t have, you can’t get, and if you don’t get, you can’t have …”

If it were in the 1970s, the month of March will go down in history as one of the toughest for any Nigerian – be you a business man, consumer or politician. Everyone felt the rain and took each day with a pinch of salt. It began like a dream but turned into a nightmare quickly. Fuel scarcity persists, diesel prices are up by 295%, food and services costs are climbing and insecurity is spreading like wildfire. While we look for the silver lining, it is quite unfortunate that the economic reality is still grim even as we approach Q2’22 – the beginning of the political mania. Last time, we did warn that you should beware the ides of March!

Flying rockets & flourishing Investors

If you can’t pay in Rubles, forget trade! This is the new stance of the Kremlin as it wittingly shrugs off the Western sanctions on its gas, coal and crude oil exports. We believe the war will be short-lived but the long-term impact on both nations, neighboring countries and trade partners like Nigeria will be lasting and severe. However, global investors seem to be having a field day as most central banks increase interest rates to curb inflation stemming from the crisis.

In Nigeria, investor behavior is quite the opposite – they are waving goodbye. The financial markets are in disarray, very far from equilibrium and the equities market, despite higher oil prices and low interest rates on fixed income securities is wobbly. Although the tables could turn with a whiff of an interest rate hike. Where Nigeria stands on its monetary policy will be more obvious at its next meeting in May (24/25). There is a 60% chance that the committee will raise rates by 25 basis points (11.75%).

What next??

We keep our fingers crossed and hope that policy makers consolidate to bring some level of stability to the domestic markets. Meanwhile, there is the imperative need to brace for impact as political campaigns rise amid the growing risk of a public backlash.

In the latest edition of the LBS Breakfast Session, Bismarck Rewane and the FDC Think Tank dig deep into the happenings of the global, regional and domestic economies and how they affect your business.

Enjoy your read…