By John Omachonu
The outgoing year, 2022, will definitely go down in history as a year to remember as we all try to forget the indelible marks of poverty, hunger and deprivation foisted on us through action and inaction of government as well as non-state actors.
While Nigeria, like the rest of the world was smarting from the ecstatic gradual and possibly full recovery from the pandemic and its attendant lockdown that lasted for almost two years, then came the Russia-Ukraine war with its ravaging effects which are still far from over.
According to Bsmarck Rewane, chief execute, Financial Derivatives Company, (FDC) in the current LBS Executive Breakfast Session for December, “Not only did the war trigger the worst global inflation crisis (8.8% from 4.7% in 2021) in the last 40 years, it brought an abrupt end to quantitative easing. In a blink, the world sprinted from near zero rates to the highest interest rate levels not seen since the financial crisis of 2008. On average, global interest rates have risen by over 300 basis points across the major central banks, including Nigeria. To top it all, there is a 98% chance the world will slip into a recession. 2022 will definitely go down in history as a year to remember as we all try to forget.”
The consequential effects are high inflation, sluggish growth, currency weakness, falling consumer disposable income, interest rate hikes (albeit at a slower pace) and rising debts.
But, political and economic actors are not helping matters, either, with the rising level of insecurity typified by kidnappings, abductions, killings and assassinations, amng others.
However, the defining factor, being the elections, have come with its high tensions, promises and heating up of the polity by politicians who are trying to outsmart one another.
Although politicians have come again with their high sounding promises, but the consensus among analysts s that the candidate with the best chance of delivery is what Nigeria and Nigerians need.
Although, it might be dangerous and too early to foretell the outcome of the elections now, one thing that is certain s that besides the election related challenges, there are others lined up by policies by the outgoing administration that may pose as threats to anew administraton.
Apart from the fact that 2023, being a leap year, has its own strange challenges and unpleasant events, the many activities characterizing the year, according to the analysts, are bound to delay the recovery of the economy.
This is because, the emerging leaders will be occupied with the spill over challenges and policies of the outgoing administration, which they feel could, possible delay and likely derail the good intentions of the new government.
Some of the analysts say the elections might generate ts own challenges, occasioned by likely inconclusiveness at the first round and the attendant crisis that may follow.
“However, ceteris paribus, we believe that Q1 will be for elections, Q2 for litigation, Q3 for celebration and Q4 for redemption. One thing is certain; whoever holds the baton for Nigeria in 2023 is inheriting a truck load of economic problems that only true and vibrant reforms will solve gradually.” says Rewane
Consequently, the analysts believe that 2023 will be unique with its challenges with the crystallization of the economic decay curve even as the wobbling and uncomplimentary monetary and fiscal policy measures continue to take their toll on inflation, output, employment and prices of goods and services.
With a quick glimpse into 2023, the analysts say the year will be burdened with activities in first quarter for instance such as, end of old naira notes as legal tender in January 31, presidential election, February 25, Governorship election, March 11 and Monetary Policy Committee (MPC) meeting in January.
Second quarter is likely to be encumbered with Run-off Election , Litigation and Census, all in April and May 29, Handover date.
Formation of the 10th Assembly will be in June, while key appointments, such as Secretary to the Government of the Federation, Chief of staff to the president, advisers on media and publicity, among others, and with all things being equal, should all happen in June
Again, with the promised great departure from the past by some presidential candidates, the nation should expect appointment of ministers and the coming on stream of the 650,000 bpd Dangote Refinery and redemption of the $500mn Euro bond and Preparation of supplementary budget.
The fourth quarter should witness talks with the IMF for critical reforms and the 2024 Appropriation Bill to be in the the works.
According to John Agbo financial analyst, the country requires a competent and younger leader to steer the ship of the country at this critical period of the country.
Agbo said the country is bedeviled with challenges and the need to eliminate the multiple exchange rate, curb oil theft and removal of subsidy, adding, “the country needs a leader with character and required attitude and acceptability to tackle these challenges.
He was quick to add that conflicting signals occasioned by tension, serial attacks on policies of government no matter how bad, without following due process should be considered as inimical to the much needed growth, adding that market efficiency is expedient for economic growth in 2023.
Similarly, a member of CBN’s Monetary Policy Committee, (MPC), Adamu Edward Lamtek predicted a gloomy economic outlook for the first quarter of 2023 pointing out several headwinds that await the economy.
In his personal statements as contained in the last monetary policy communique for the year, held on November 22, Lamtek took a swipe at the raging precarious outlook for inflation, exchange rate, oil revenues, fiscal policies, and insecurity.
He also made recommendations which in his opinion, if not implemented, could portend shaky economic start for the new government.
According to him, the country is yet to see the effect of large-scale flooding which occurred in many parts of the country around October, adding that the full impact, particularly on the nation’s Gross Domestic Products, (GDP), would be felt next year.
He expressed pessimism on the inflationary pressures. stressing that the November, 2022 expectations was 19.93%, lower than projected inflation of 21.29%. However,the country is reading 21.47 percent for November.
“December festivities may drive up inflation expectations again. Petrol queues in some parts of the country are also likely to impact on output growth and inflation,” he said.
The MPC member called on CBN to review its current foreign exchange policy so as to be able to channel the FX sales to those who are qualified to “benefit”, while also advising for the need to boost its supplies.
“There is a need to address the pressures on the naira exchange rate by boosting supply of foreign exchange in the economy. I am also of the opinion that the FX sold by the Bank at the I&E windows should be for productive activities alone. The Bank should review its policy of those who qualify to benefit from FX sold in the official market” he said.
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Commenting on the fiscal policies of government, Lamtek scathingly chided government for its poor handling, and continued reliance on CBN to fund its fiscal deficits at a detrimental cost to the economy.
“The worsening fiscal balances should also be addressed. Most indicators of fiscal balances are in the red. The reliance on monetary accommodation to enhance fiscal operations is costly to the economy both in the medium and long term. The revenue challenges of the government should be confronted headlong. The Bank should moderate further financing of the federal government and conclude on the securitization of the FGN exposure to the CBN. In addition, the issue of oil theft and vandalization of pipelines and other government assets must be urgently addressed.”
The implications of all these challenges, according to the analysts should be the need for issue based campaign to enable electorate make the right choice.
But Cardinal John Onaiyekan has expressed disappointment with the nature of campaigns by the political parties and their candidates despite the signing of undertaking to maintain peace, decorum and issue- based campaigns.
The member of the National Peace Committee, who highlighted the shortcomings of the committee,to enforce discipline and compliance said, candidates who are insisting on winning elections at all cost using foul languages are not democratic and the onus is on the electorate, who, he said, are really feeling the pains of the present hardship to make wise choice.