" />
Published On: Wed, Dec 21st, 2016

Nigerians to celebrate bleak Christmas

 

Many who spoke to Business Hallmark noted that the incessant hike in the prices of household goods, especially foodstuffs which have pushed inflation rate to about 20 per cent, has made it very difficult for them to shop for Christmas.

Rice which many serve during the Yuletide celebration, which was sold for between N9,000 and N13,000 this time last year, now goes for between N18,000 and N23,000 in different parts of the country. The economic meltdown has caused many State governments to owe their workers salary arrears for  several  months.

Mrs Bunmi Komolafe, a secondary school teacher in Osun state claimed they have been receiving half salary for about one and a half years now and they last collected salary for September. According to her, things have  been very tough for  her family and wondered how she would be able to cope  during this Christmas with half salary and five children to fend for.protest

Mrs Folake Ayodele, who works with a church in Lagos told BH that she usually buys Christmas wears for her children around November, but because of the economic crunch, she was yet to buy clothes for them and with the look of things, they may have to settle for old ones.

About two million workers have so far lost their jobs this year alo
ne as the economic recession made many companies to fold up or significantly cut down their workforce.

The most recent data from National Bureau of Statistics showed that the country’s unemployment rate stands at 13.3 per cent. The situation is further worsened for many Nigerians who had their money trapped in the ponzi scheme, MMM.

A lot of Nigerians had invested millions in the ponzi scheme, which pays 30 per cent returns, with the hope of having something to spend during the Yuletide, only to be told two week ago that it has been suspended till January. David Okoh who is based in Kaduna BH that his Christmas celebration has been ruined because the N100,000 he planned to spend during the festivity is now trapped in MMM.

“This year’s Christmas would be definitely bleak for me, because the money I hoped to  spend during this period is now hanging in MMM. I just pray the scheme resumes in January, because it has really helped me,” he lamented.

“The feeling  would certainly be horrible, especially when you invest all the earnings for the year into MMM with the hope of doubling it for a fun-filled Christmas and New Year Celebration, only to be told that the account has been frozen till January , I am sure that the feelings will not  be so great,” Adeola Oredola posited.

 

Shoprite, Other South African Companies to Increase Investments in Nigeria

Shoprite, Other South African Companies to Increase Investments in Nigeria

The Certain Bank of Nigeria and Security Exchange Commission had repeated warmed Nigerians against investing in the ponzi scheme, explaining that they would lose their money, because MMM was not sustainable.

Many traders and artisans have also been complaining of low patronage. Chuks Peter, who sells electrical appliances in Meiran area of Lagos said he had never had it this bad. He claimed for some time now, he has been going to shop without anybody requesting  to  buy even bulbs from him, adding that he is not sure of how his family would cope during these  festivities.

Many who usually travel home for Christmas and New Year celebrations said the economic situation would force them to remain in their base. Donald Ezeife, a clearing agent at the Muhammed Murtala International Airport, Lagos, who usually go to the East during Christmas said he can’t afford to travel home this year, because business has been very dull at the airport.

The Nigerian economy dipped into a recession by the second quarter of 2016 as the Gross Domestic Product (GDP), slid by a further 2.1 per cent (after skidding down by 0.48 per cent in the first quarter of the year). Several economists and financial analysts have argued that slide in virtually all major economic indicators in 2016 could lead to a full-blown depression if urgent measures are not taken to stem the tide.

Of late, inflation has pierced the roof, as the Naira tumbles in foreign exchange markets with the local currency trading at N475.00/$ in parallel exchange markets; interest rates have equally reached troubling heights with domestic lending rates hovering between 27 and 32 per cent. The price of crude which contributes the highest revenues to the country has dropped sharply from the giddy altitude of $114 per barrel in June 2014 to $32 before settling recently to between $40 and $48 a barrel.

Whereas many industry analysts believe that the nation’s revenues have shrunk, they also note that the ongoing recession in the country has been policy induced.

Anger, hunger, Anguish and frustration have pervaded the nation. Some of the policies that experts consider are responsible for the hopelessness of the economy include; the fixed exchA malnourished childange rate which has only recently been modified into a flexible exchange rate. This did and has continued to keep investors on edge as forex inflows have significantly dropped off. Unfortunately, prices of goods and services have climbed hurting both middle and low income earners.

With the Monetary Policy Rate (MPC) at 14 per cent, cost of funds has remained high. Manufacturers and other local investors cannot borrow money from banks to fund their businesses at the rate of 27 or 30 per cent. In the light of this, many companies have laid off many workers while others have cut salaries by half and more. It is estimated that more than 4 million Nigerians have been relieved of their jobs given the economic crunch.

Many industry experts have predicted that inflation may hit between 19 and 20 per cent before the end of year. Unfortunately, ameliorating measures of increasing the MPR to 14 per cent has not curbed inflation as expected by the authorities.

Tight monetary policy has not achieved its objectives and this has been worsened by a supposedly liberal fiscal policy which has also not succeeded in expanding economic output.

This has resulted in an economic ‘screwdriver’ a situation where twists in both fiscal and monetary policy have driven the economy to lower output levels at higher rates of domestic inflation. Faced with the situation both the monetary and fiscal authorities seem to be passing buck with the fiscal authorities urging the central bank to reduce rates while the Bank insists that the finance ministry should cut back on fiscal borrowings and raise domestic taxes such as the Value-Added Tax (VAT) to stanch the leak in the budget and fund the deficit.

Torn between the arguments of both economic policy institutions the presidency appears to be in a state of unguided confusion. The more the presidency tries to fiddle with policy tools the deeper the depth of hardship they seem to inflict on Nigerian businesses and workers.

The Buhari’s economic team was constituted six months after he assumed office as the President of Nigeria. The team emerged after he had carefully selected his best experts with the hope of turning around the nation’s economy. In the team that are supposed to run a better economy than the previous government are Minister of Finance, Mrs Kemi Adeosun, Minister of Budget and Planning, Senator Udo Udoma Udo, Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, Dr. Abraham Nwankwo, DG, DMO, Dr. Adeyemi Dipeolu, Special Adviser on Economic Mathers to President Buhari, Oluyemi Oluleke Osinbajo, Vice President of Nigeria, Dr. Okechukwu Enyinna Enelamah, Minister of Trade, Investment and Industry.

This group of professionals has been entrusted with the herculean task of reversing the recessionary trend. They are expected, in addition to using the instrumentalities of fiscal and monetary policies, to think out of the box and save the nation’s economy from sinking into further depression.

They have therefore, grappled with current economic challenges such as government spending, exchange rate, inflation, interest rate, partial restriction of forex to importers of 41 items to grow the economy. Yet all the major economic indicators have trended southwards as the GDP slipped into the negative of 2.1 percent in the second quarter 2016. It is not clear whether they are going to succeed in saving the economy from its continuing drift to the dangerous zone.

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Most Shared

Recent posts

  • Nigeria’s GDP rises 1.95%, non-oil sector accounts for 90.3%

    The oil sector’s contribution to Nigeria’s Gross Domestic Product, GDP remains below 10 per cent in Q1 figures of the nation’s GDP released by the National Bureau of Statistics in Abuja today. According to the NBS, the nation’s GDP grew by 1.95 per cent year-on-year- in real terms in the first quarter of 2018. Although […]

  • National healthcare delivery threatened as sector’s crises worsen

    . JOHESU strike is sheer blackmail – NMA  By BAYO OBAJEMU These are troubling times for the health sector beset by the panoply of problems, some of them of long-standing nature while others are offshoots of long years of neglect by the authorities. But the spectre of war drums that hovers over the sector now […]

  • Foreign CEOs take over Corporate Nigeria

    . They are trying to protect their interests – Experts  By AYOOLA OLAOLUWA Foreigners have taken over the management of most multinational companies in Nigeria, BusinessHallmark findings have revealed. A two-week survey conducted by BH in May 2018, which involved fifty top companies, show that twenty-eight of the companies are headed by expatriates, while only […]

  • UBA’s Uzoka steps out of the shadows

    By TESIM SHITTA-BEY United Bank for Africa (UBA) has had a chequered history of good times and bad times but with its blazing first quarter (Q1) 2018 results setting the tone for a new twist in the tale analysts have begun to take out calculators as they forecast the bank’s potential year-end earnings. With profit […]

  • Ikeja Hotels returns to Lagos bourse

    The Nigerian Stock Exchange (NSE) has given the management of Ikeja Hotels the approval to resume trading after reviewing the two-year suspension placed on the shares of the company on Nov. 10, 2016. According to a ‘facts behind the restructuring’ document released by Ms Tinuade Awe, NSE Executive Director Regulation, trading would commence on the […]

  • Pharmacist council begins recall of Codeine cough syrup

    The Pharmacists Council of Nigeria (PCN) says it has started recalling cough syrup containing Codeine from its stakeholders in compliance with Federal Government directive. The Registrar of PCN, Mr Elijah Mohammed, revealed this in an interview with the News Agency of Nigeria (NAN) on Saturday in Abuja. The Minister of Health, Prof. Isaac Adewole, had […]

  • N5bn fraud: Akingbola has case to answer – Supreme Court

    The Supreme Court on Friday ordered, Erastus Akingbola, to return to the Federal High Court, Lagos, to answer his alleged five billion Naira fraud charge. Akingbola is a former Managing Director of the defunct Intercontinental Bank Plc. Justice Tanko Muhammad, leading a five-man panel, affirmed the Feb. 20, 2015 judgment of the Court of Appeal […]

  • AMCON takes over Sen. Oduah’s assets

    The Asset Management Corporation of Nigeria (AMCON) has taken over Sea Petroleum Oil & Gas Ltd. and other assets belonging to Sen. Stella Oduah-Ogiemwonyi over an unpaid debt of about N20 billion. AMCON said the takeover followed an injunction granted by Justice M.S. Hassan of the Federal High Court, Lagos against Sea Petroleum Oil & […]

  • Not so sir, Army panel tells General TY Danjuma

    The Nigerian Army on Friday said allegations against it by retired Gen. T.Y Danjuma that it colluded with militia in Taraba and refused to protect the people were untrue. The Chief of Army Staff, Lt.-Gen. Tukur Buratai, made this known at a news conference in Abuja where he gave details of the findings of the […]

  • Total, Mobil oil top losers’ chart on NSE

    Total Nigeria Plc on Friday at the Nigerian Stock Exchange (NSE)  topped the losers’ chart, dropping by N9.80 to close at N212 per share, the News Agency of Nigeria (NAN)reports. Mobil Oil trailed with a loss of N7 to close at N181, while Dangote Cement was down by N3 to close at N245 per share. […]

  • Invest more in science education, academic tasks FG

    The Federal Government has been advised to increase its funding of the education sector if Nigeria is to become globally competitive. An academic at the Obafemi Awolowo University, Ile Ife in Osun State, Dr Babatunde Ogundare, gave the recommendation on Tuesday at the Faculty of Science Secondary Schools Quiz Competition held at the institution. Addressing […]

  • Timeline of Ebola virus since first known outbreak

    Following is a recap of past epidemics of Ebola as the Democratic Republic of Congo (DRC) battles a new outbreak of the deadly tropical disease: 1976: First known outbreak  Ebola was first identified in central Africa in 1976 and named after a river in northern Democratic Republic of Congo (DRC). It claimed 431 lives that […]

  • Crude prices hits above $80 since late 2014

    Benchmark oil contract Brent North Sea briefly surged above $80 a barrel Thursday, hitting its highest level since late 2014 and extending a recent run higher fuelled by tight supply concerns. European stock markets meanwhile rose as the euro weakened against the dollar, but Wall Street pulled back in early New York trading. Brent North […]

  • AfDB approves $100m to boost fertilizer production in Nigeria

    The African Development Bank (AfDB) says it has approved 100 million dollars senior loan to Nigerian firm, Indorama Eleme Fertilizer and Chemicals Limited, to support the production of Fertilizer in Nigeria. The Bank disclosed this in a statement, on Thursday adding that it would help the company’s plans to double its fertilizer production from 1.4 million […]

  • FG opens online portal for investors

    The Federal Government has launched an up-to-date online portal, `iGuide Nigeria’, containing necessary information and relevant data for willing investors. The Minister of Trade and Investment, Mr Okechukwu Enelamah, at the launch in Abuja on Thursday, said the portal would greatly improve the Ease of Doing Business in the country. The Permanent Secretary of the […]

  • Governors threaten NNPC over fuel subsidy

    National Economic Council (NEC), comprising the 36 State Governors in the country has threatened to take over the responsibility of subsidising petroleum products in their states based on consumption following the huge amount of money being spent by the NNPC as fuel subsidy payment annually. The Chairman of Governors’ Forum, Gov. Abdulazeez Yari of Zamfara […]