Dear Subscriber,
Is the Naira catching a breath or taking a short break before plunging again?
At this time last month, we were celebrating that the naira was the strongest currency in the world and now we are moaning at the naira swinging back and forth. Nigerians are gradually coming to terms with the reality that currency markets are volatile by nature and not a one-way street. After shedding 53% to an all-time low of N1915/$ on February 21, the naira began a gaining streak following CBN’s intervention, appreciating by 82% to a high of N1055/$ on April 16. Shortly, the naira reversed its gains, losing 27% of its value to N1450/$ on May 09. Yet, amidst these glimmers of hope, there remains an underlying sense of apprehension, a fear that these moments of semblance might merely be the calm before the storm. Nigerians’ emotional mood swings now depend on the direction the currency is going. Whether the Naira is catching its breath or gearing up for another tumble, one thing is sure: proactive measures and strategic planning are imperative to safeguard Nigeria’s financial future.
Petrol scarcity/queues rear its ugly head again!
Out of the blue, petrol scarcity and queues appear from nowhere. This is after steps have been taken to improve production, including a reduction in subsidy, the opening of the Dangote refinery, and the modular refineries. After all that is done, there is no justification for petrol scarcity and price hikes. Then why the scarcity and queues? Is it a result of a structural problem, contrived, or a combination of both?
Sell in May and go away
The equity market displays signs of a downturn, aligning with the traditional investment adage “Sell in May and go away.” The market has experienced a significant decline, recording a loss of 6% from its recent peak. This downward trend indicates broader economic uncertainties and investor concerns regarding future market performance. Further projections indicate that the market may continue its descent, with an estimated additional loss of 5% anticipated in the near term.
Surviving One Year: Finding the Glitter in the Gloom!
One year in office means 25% of the life of an administration in its first term in Nigeria. The review of the one-year performance is a sober introspection on the measures of macroeconomic policy and the welfare of the people. The reality remains that there are lags between policies and impact, then impact and credibility. This is a year of this administration’s leadership, and policy changes must be followed by institutional reforms to deliver tangible gains that will trickle down to the populace. So far, there has been a shift of resources from people to the government. Now is the time for the government to manage the resources efficiently and ensure the investment multiplier effect is felt.
Just as new reforms are being initiated, we cannot afford to ignore Ruchir Sharma’s sobering remarks “It’s now worth looking at nations that were considered star performers but are now breaking down.” These recent developments and other burning economic issues were discussed at the LBS Breakfast Session by Mr. Bismarck Rewane and the FDC Think Tank, spotlighting the implications on businesses, households, and investors.
Do enjoy your read…
