Is It Early Signs Of Economic Recovery? By Nasiru Suwaid
A few weeks back, after the Central Bank of Nigeria (CBN), had issued the operational guidelines for the flexible foreign currency exchange management, it was as if a dam had been burst and breached into a flood of goodwill, as pent-up emotions inform of positive vibes pervaded the Nigerian Stock Exchange (NSE).
In a matter of a week or two, the market gained what it had lost for months unending, as shares in the companies traded in the exchange gained traction and became hot commodities for brokers starved of economic good news to speculate upon and convince market investors to pledge their money into the financial system.
Because, basically, upon all the complaints about the Nigerian economy, the repetitive query as of recent past, by the manufacturing sector, was premised on the unavailability of foreign exchange currencies to buy the much needed and necessary raw materials for production, as for the significant portion of the trader community, the entrepreneur importers were severely hampered and affected by the lack of forex to open Bill of Ladings.
As for ordinary citizen user of the foreign currencies, either for business trips, educational tourism, health tourism or even, sightseeing tourism, it is as if the unavailability of the forex, has reduced the quality of their economic life, on that capability to spend into the economy, conduct businesses and somehow create a measure of wealth in that process.
It is an incontrovertible fact, that it is in this type of little snippet of information, which emboldens and encourages foreign as well as local investor to spend their money into the economy. But, were this the only signs of recovery, it could be easily argued against such an emerging positive pattern, however, economic data and figures coming out last month ending and early this month bears a desired result.
Generally, economic progress, either in the positive or negative sphere is like a frictional motor movement, it does not screech into a halt suddenly, rather, it usually slows in motion, from positive abundance to lesser economic growth, until it turns into negative recession and then a depression and eventually, a catastrophic stagnation.
As for stopping an economic rot, it does not momentarily turn from a negative bleeding into perfect recuperative health, rather, the downward spiral must be stopped, with a screeching halt, one motion in a time, until the undesired economic movement is reversed into positive territory of growth and development.
As for the World Economics headline Sales Managers Index (SMI), the quarterly average sales index for the month of June 2016 stood at 43.6 index point, which is a continuance of the negative movement of past few months, however, the economic motion was slower in activity, almost halting in movement, rather than a negative fast spiral into economic ruination of productive growth and development.
It is worth noting, that while four of the five indicators in the report, pointed down southwards, the key business confidence bearing, positively went up northwards. As for the Central Bank of Nigeria (CBN) headline Purchasing Managers Index (PMI) for the month of June, 2016.
The quarterly average sales for the period dropped to 41.9 index point, compared to 45.8 index point in the preceding month, although the data figures seemed negative, it is still a much slower pace downward movement, almost screeching to a halt in negative manufacturing growth and evidently, a precursor to an emerging reversal into positive territory and productive manufacturing activity.
As a confirmation of this evolving fact, the FBN Quest headline Purchasing Managers Index (PMI) for the month June, 2016. The report highlighted the quarterly average sales for the period of research at 50.2 index point, that is a pick-up from 48.2 index point for the previous month, which is a positive return to manufacturing activity, in fact, two of the five key indicators posted encouraging numbers, with new orders sub-index order climbing to 52.5 index point from 49.5 index point, while stock of purchases sub-index marginally increased from 48.5 index point to 49.5 index point.
And this two other things:
SKYE BANK TAKEOVER AND PMB POLICY ON CORRUPTION
It was in the beginning of this week, the Central Bank of Nigeria (CBN), the nation’s primary banking industry regulator, took over the management of the financially challenged bank, because of inappropriate insider lending and reckless mismanagement of the capital funds. Virtually, the bank is broke and the apex bank would need to inject public funds, for the sustenance of the banking operation, protecting depositor funds as well as investor assets.
The question to ask here is what has caused such an undesirable situation, in one of the key players in the banking industry? The answer is very simple, it is corruption, because, the Chairman of the troubled bank, merely used his position at the banking institution, to become a financial enabler for the former ruling party’s presidential campaigns.
Thus, strategically positioning himself to buy most assets due for privatization, unfortunately, with risky bad loans that have not been authenticated by dispassionate assessment and subjected to prudential guidelines, obviously, because of his status and position in the bank’s management.
Many a financial analyst, have often openly complained, whether fighting corruption as the cardinal economic objective of the President Muhammadu Buhari administration is adequate, well, consider the cost of what happened to this bank, to the Nigerian economy.
In terms of the public funds that have to be diverted to sustain the bank, how many jobs that were lost and that might likely be lost in the future, before the bank could become financially stable, the investor confidence cost for such a bad image to the banking sector and the likely customer confidence cost, after all, many in the industry, have started calling for a stress test, on the remaining Nigerian banks.
Surely, fighting corruption must be an integral characteristic component of every successful economic policy and direction, because, investors would never want to put their money, into a country and industry, where players recklessly breach financially fiduciary guidelines and responsibility placed upon them without consequences.
LEST WE FORGET
This past few weeks was particularly bloody in the annals of global media, what with the sad stories of wanton deaths and destructions, from Baghdad to Bangladesh, from Istanbul to Iraq, from Falluja to Florida and most unfortunately, according to most international security experts, it has to do with the holy month of Ramadan, which to ordinary Muslim devotees, it is a period of intense prayers and deep supplications.
While to the very few religious fundamentalist and fanatics, they observe this very sober period of extreme kindness and brotherliness with vile actions and violent destructions, committing inhuman acts of terrorism akin to the theological literature depiction of the Armageddon scenario.
In fact, it had been the same narrative about Nigeria, just a year ago, when the Boko Haram was at the peak of its murderous activities, detonating bombs with the rapidity of an everyday occurrence, indeed, it was so successful in its devilish enterprise, that it even surpassed the Islamic State of Iraq and the Levant (ISIL), which is also known as the Islamic State of Iraq and Syria (ISIS), in the number of terroristic acts undertaken within the period.
For my Muslims brothers during the time, the desired action of frequenting mosques, became a dangerous adventure with unforeseen consequences, for my Christian brethren, the religiously required act of a Sunday mass in the church, became a perilous activity with unfathomable consequences of death, destruction and dehumanizing fate.
Fortunately, as of today, the destructive acts of terrorism has gone down, near the zero percentage point, that I can authoritatively testify, there was no single but successful act of terrorist detonation, during this period of Ramadan fast, even though, a few attempts were made in Maiduguri, the bombs only detonated with their heartless carriers.
Now, if one of the most fundamental requirements for the ease of doing business, entrepreneurial creativity and consumer patronage activity is the provision for the maintenance of peace and certainty of the availability of security, shouldn’t the administration of President Muhammadu Buhari (PMB) be commended and even be thanked, for creating an environment and atmosphere, where citizens could go out to seek for their daily bread, while enjoying the inalienable right to worship their God.
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