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Op-Ed

The leader Nigeria needs

Nigeria needs a president who can bring inclusion

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Voters queue to cast their ballot in Maiduguri in the 2019 presidential elections

In 1945, precisely the 7th of December,the Japanese kamikaze pilots had bombed pearl Harbour, when President Roosevelt was told, he summoned his cabinet. Obviously everyone was shattered and hurt and he needed to inspire confidence. Mr Roosevelt rose from his chair; in great pain, (Roosevelt had suffered polio and was paralyzed) and muttered “America must rise”.

Leaders shine through in the darkest times. Winston Churchill was prominent during the second world, hence after the war, the British people did not re-elect him. This shows you that leaders are situation based. I had a conversation with a friend that stated to me that the over-liberalism of Barack Obama was precursor to Donald trump elections because the conservative voice was terribly silenced under Obama.

This begs the question: what leader does Nigeria need? First, what are the country’s issues?

Unemployment 

The unemployment numbers in recent times have been staggering, a rise from 8% to 23% in the space of 5 years would lead to massive protests in some climes. The rate is also very scary due to underemployment. We have seen too many graduates becoming security guards and earning less than minimum wage value in some cases.

The National bureau of statistics puts the number at 18.2million as underemployed. The first visible evidence of this was the immigration jobs test of 2014. These numbers are quite scary and call for a leader that can truly incentivize the economy, a leader with the boldness for capital injection this happened when Harry Truman had to inject the European economy with 13 billion dollars after the Second World War.

GDP and population growth

The current level of GDP growth calls for leadership, when the GDP growth rate doesn’t commensurate with population growth rate, then there is a problem. It affects every part of the economy. According to the Philip curve, an econometric model describing a historical inverse relationship between rates of unemployment and corresponding rates of rises in wages that result within an economy. The stunted GDP growth impacting on unemployment definitely would lead to lower wages, hence the pervasive lower wages in society. The current GDP rate of 2.4% and Population growth rate of 2.6% brings its attendant problems and we must get a leader that can solve this challenge.

Tax to GDP ratio

A tax to GDP ratio of less than 10% in Nigeria is abysmal for development, hence the need for a leader to deepen the tax net. Neighboring Benin Republic does a better number in tax inclusion. The European Union has a threshold of over 45% tax to GDP ratio. Greece started to suffer because they have one of the least percentile of tax to GDP ratio in Europe. We need a leader that can find the solutions to the tax issues and increase the tax net. Taxes are panaceas to national development and no nation can effectively develop without a strong tax base.

Security 

With over 2 million people displaced in the north east and disruption of farming activities in Benue due to the farmer-herder crisis, the security situation calls for leadership. Nigeria needs a leader who can truly solve the security situation.The funds spent on security so far have been dumped in the well of corruption with little or no impact. There is a need for true solutions with intensive intelligence gathering and sincerity of operations.

Education 

The dismal rate of 13.1 million pupils out of school and less than 50 percent primary school complication rate is a ticking time bomb. We need leaders who can build schools and chart a roadmap for education of its citizenry. It is shocking that Nigeria has failed on all its targets towards educating its citizenry. We all remember vision 2010 and other botched visions. It behoves a great deal of pertinence in solving these problems.

Infrastructure 

In 1906, Walter Egerton, the colonial governor of Lagos and the southern protectorate had proposed pipe borne water across Lagos but today, there no pervasive pipe borne water in Lagos. A friend built his house in 1992 in Omole phase 1 estate in Lagos, and at that time, he had pipe borne water but in 2019, there is no pipe-borne water. This is a vivid indication of the dearth of infrastructure. A rail line to Ibadan is still a big deal in 2019, but in 1906 the Lagos-Ibadan rail line was extended to Osogbo. This shows that we need a leader who can truly develop infrastructure in Nigeria.

National integration

National unity is key for Nigeria to succeed. The civil war further heightened this discord amongst Nigerians. Hence the need for a leader who is de-tribalistic with political parties that should stop zoning. The leadership of every nation should be based on competence. America does not have a zoning system. Despite the fact that the United Kingdom is made up of three countries, the Prime Ministerial role isn’t zoned. We need to fully pursue national integration with an intent of true social inclusion and that’s what the next president of Nigeria should do. The current dearth of fiscal discipline in the Nigerian system leaves much to be desired. The current recurrent expenditure rate of over 60 percent is quite scary and the current debt to service ratio of close to 70 percent is indicative of a deeper fiscal insensitivity that needs to be nipped-in the bud.

Africa Continental Free Trade Agreement 

This is the agreement between 49 African Union member states with the goal of creating a single market followed by free movement and a single currency union. It is poised to open up African possibilities and address the dismal inter-African trade status. It should be said, we need a leader who will sign and ratify this act quickly in a bid to position Nigeria properly with its vast potential. After negotiations for 15 years, China finally joining the world trade organization shores up their economy.

We need a leader who understands the mammoth potential of African trade and is ready to do business. Many people may bring in the brexit argument, but the UK is now understanding the importance of trading blocs. Joining the intergovernmental blocs are imperative for national development and the argument against these unions by anti-globalists reminds me of the arguments of the Luddites in industrial England.

In truth, Nigeria needs a president who can bring inclusion, make Nigeria a beehive of positive purposeful economic activities sautéed with peace, justice, social integration and governance.


The views expressed in this piece are the author’s own and do not necessarily reflect News Central’s editorial stance.

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Op-Ed

Oil sensitivity set to intensify on conflicting themes

Oil markets are poised to remain highly sensitive and reactive to supply and demand side factors ahead of the OPEC meeting this month.

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Oil sensitivity set to intensify on conflicting themes | News Central TV

It has been a rollercoaster trading week for oil markets as investors tussled with conflicting fundamental themes pulling and tugging at the commodity.

Oil prices initially collapsed roughly 4 per cent mid-week thanks to an unexpected rise in U.S. crude stockpiles and a gloomy outlook for global oil demand. Bulls were later thrown a lifeline after geopolitical tensions in the Middle East rekindled concerns over potential supply shocks.

Oil markets are poised to remain highly sensitive and reactive to supply and demand side factors ahead of the OPEC meeting this month. With oil trading at depressed levels despite the recent rebound, OPEC+ may have no other choice but to extend supply cuts in an effort to prevent any further downside shocks.

Related: Nigeria foreign reserves rise in May; Gold Shines

For as long as Nigeria remains reliant on oil sales as a source of growth, the weakness in oil exposes the nation to significant downside risks. Should oil prices sink deeper into the abyss, Nigeria’s fragile recovery, exchange rate stability and improving sentiment will be under threat.

Looking at the technical picture, WTI Crude is trading marginally below $53.00 as of writing. Repeated weakness below this level is likely to encourage a decline towards $52.00 and $50.60.

Dollar steady ahead of retail sales 

dollar

The Dollar edged higher against a basket of major currencies today as trade tensions and global growth concerns supported the flight to safety.

While the Dollar is likely to remain supported by safe-haven flows amid persistent trade tensions, the question is for how long? With the Fed speculated to cut interest rates and recent economic data from the United States nothing to celebrate about, the Dollar is running on borrowed time.

Related: Nigeria’s week ahead: ECB meeting and Oil in focus

Much attention will be directed towards the latest U.S. retail sales figures on Friday which should offer insight into the health of the U.S. economy.

Should the report disappoint, the Dollar is likely to weaken as expectations mount over the Federal Reserve cutting interest rates this year.

Commodity spotlight – Gold 

Commodity spotlight – Gold

This has been a mixed trading week for Gold due to the growing sensitivity of global risk sentiment.

Related: Investors “Sell in May and Go Away” as risk aversion intensifies; Oil collapses

The precious metal has the potential to conclude the week on a positive note if the pending US retail sales report fails to hit market expectations. Looking at the technical picture, Gold is likely to test $1347 if $1324 proves to be a reliable support.

The views expressed in this piece are the author’s own and do not necessarily reflect News Central TV’s editorial stance.

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Op-Ed

Nigeria’s week ahead: ECB meeting and Oil in focus

The week kicks off with the US ISM Manufacturing PMI for May which is projected to hit 53.0

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Nigeria week ahead: ECB meeting and Oil in focus
(File photo)

It will be another busy week for financial markets as investors grapple with trade tensions, Brexit, depressed oil prices and concerns over slowing global growth.

The week kicks off with the US ISM Manufacturing PMI for May which is projected to hit 53.0. Appetite for the Dollar is likely to take another hit if the PMI figures fail to meet market expectations.

Investors will be paying very close attention to Fed Chair Powell’s speech on Tuesday for fresh insight into the Fed’s monetary policy path. Investors will be paying very close attention towards Powell’s tone, given how concerns are rising over trade tensions potentially impacting the US economy. 

The biggest event risks this week will be the European Central Bank meeting and US jobs report on Friday. The Dollar could end up depreciating further if the US jobs report disappoints and fuels speculation over the Fed cutting interest rates this year. Naturally, this will be good news for emerging market currencies with the Naira falling into the category.

The economic calendar for Nigeria will be relatively light this week with the Stanbic IBTC Bank PMI scheduled for release on Thursday. Although the economic docket is light, external factors in the form of trade tensions, the Dollar and most importantly oil prices will impact sentiment towards the nation.

Falling oil prices are set to place the Nigerian economy in a difficult position. It is widely known that Nigeria relies heavily on crude oil exports which account for over 90% of exports earnings and over 70% of government revenues.

A sharp decline in oil prices could threaten Nigeria’s economic recovery while disrupting exchange rate stability. The potential decline in foreign exchange reserves from lower oil is likely to weaken the Naira, consequently translating to rising inflationary pressures. Consumers and businesses will feel the pain as inflationary pressures mount, while the drop in foreign reserves may complicate the Central Bank of Nigeria’s efforts to defend the Naira.

For Nigeria to insulate itself against such external risks, there needs to be a greater push on diversifying away from oil reliance to other sustainable sources of economic growth with Agriculture being one of several solutions. Elsewhere, Gold is glittering as geopolitical risk factors and concerns over slowing global growth accelerate the flight to safety.

This precious metal has turned bullish on the daily timeframe as is positioned to push higher should $1,300 prove to be reliable support. A vulnerable Dollar should inject bulls with enough inspiration to push Gold towards $1,324 in the short to medium term.

The views expressed in this piece are the author’s own and do not necessarily reflect News Central TV’s editorial stance.

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Op-Ed

Nigeria foreign reserves rise in May; Gold Shines

Rising foreign reserves should provide the extra ammunition needed for the Central Bank of Nigeria (CBN) to defend the Naira

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Nigeria foreign reserves rise in May; Gold Shines

The Naira is set to witness further stability against the Dollar after Nigeria’s foreign exchange reserves increased by $295.12m to $45.087bn in May.

Rising foreign reserves should provide the extra ammunition needed for the Central Bank of Nigeria (CBN) to defend the Naira against a tornado of domestic and external headwinds. Nevertheless, the nation still remains exposed to oil price volatility. It is widely known that Nigeria relies heavily on crude exports which account for over 90% of exports earnings and over 70% of government revenues. The fact that oil prices are sinking towards $55 today may lead to a fall in reserves in the coming months which has the potential to impact exchange rate stability, inflation, and economic growth.

Dollar blinks and loses hold on throne 

Dollar bulls were nowhere to be found today despite risk aversion accelerating the flight to safety. Market fears over Trump’s trade disputes with Mexico and China negatively impacting the US economy are weighing on the US Dollar.  While the Greenback still remains a prime destination of safety in times of uncertainty, the question is for how long? When keeping in mind how the Fed funds futures are currently pointing to a near 70% chance of a rate cut by September, the Dollar’s upside may be limited. In regards to the technical picture, the Dollar Index has the potential to sink back towards 97.50 if a weekly close below 98.00 is achieved.

Commodity spotlight – Gold 

Gold is extended gains on Friday amid news of unexpected tariffs on Mexican goods, while ongoing US-China trade tensions continued to support safe-haven demand. 

A depreciating Dollar is supporting the upside with prices trading marginally below $1300 as of writing. Market expectations over the Fed cutting interest rates in 2019 coupled with concerns over slowing global growth are likely to ensure Gold remains buoyed moving forward. Technical traders will continue to closely observe how Gold behaves below the $1300. A solid breakout above this point should signal a move higher towards $1324.

Oil set to register first monthly loss of 2019 

Oil is on track to register its first monthly loss of 2019 with WTI Crude sinking towards $55 thanks to Trump’s newly announced tariffs on Mexico and concerns over rising US gasoline stockpiles.

It is becoming increasingly clear that oil markets remain highly reactive to news around supply and demand factors. Such market dynamics will frame the upcoming OPEC meeting in June as a pivotal event that will shape Oil’s outlook for the rest of the year. Even if OPEC+ decide to extend their supply cuts into the second half of the year, this may be overshadowed by concerns over US-China trade tensions impacting the demand for oil as global grows.

The views expressed in this piece are the author’s own and do not necessarily reflect News Central’s editorial stance.

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