News reaching Post-Nigeria, indicates that the naira has crashed against the dollar, barely 24-hours after President Muhammadu Buhari addressed the nation to mark the May 29 Democracy Day.
According to reports, Investors were disappointed at President Buhari’s long speech, as it did not state clearly how he wants to achieve his economic blueprint, before the 2019 general elections.
They also decried that most of the achievement outlined by the President were untrue, as they are not physically
seen, nor felt in the economy.
In the greenback market, Post-Nigeria gathered that the naira came under pressure against the United States’ dollar, falling to N366 on the parallel market.
“Naira weakness could stoke imported inflation”, Analysts at Financial Derivatives Company Limited, headed by Bismarck Rewane, a foremost Economist, said in their latest economic bulletin.
Ecobank Capital, in its Middle Africa Market Weekly Update, said that depreciation pressures on the naira could emerge with rising risk-averse sentiment on emerging and frontier markets.
“The exchange rate depreciated slightly at the Investors & Exporters window, at N361.6/$, and depreciated a bit more at the parallel market at N366/$. Turnover at the IE window rose 13.2 percent from the prior week to $1.1 billion”, they added.
Before now, external reserves slipped to $47.793 billion, on May 14, from $47.865 billion, on Thursday, May 10, according to data from the Central Bank of Nigeria.
The reserves, which fell further to $47.784 billion, on May 16, rose to $47.799 billion, on May 18, but dropped to $47.754 billion, on May 21, the latest CBN data showed. The reserves figures had not been updated as at the time of filing in this report, on Wednesday, May 30.
Reacting to the huge depreciation, the Chief Executive Officer, Cowry Assets Management Limited, Mr. Johnson Chukwu, said: “Clearly, we have seen some pressure, and it is partly occasioned by the reversal of capital flow.
“I think what is happening, is that foreign portfolio investors are not reinvesting their matured instruments; rather they are converting to dollar to take it out.
“The drop in the reserves is coming from the outflow. The level of inflow is less than the current level of outflow. It will manifest in the reserves.
This is what we are seeing now, that the reserves have seen two weeks of consecutive decline, which was the first in a very long time.”
“Until after elections, I do not imagine that the concerns of foreign portfolio investors would have been assuaged”, Chukwu added.
Amidst the fall, a Non-Governmental Organisation, NGO, Africa Check, analyzing President Buhari’s Democracy Day speech, submitted that his seven main claims were untrue.
Africa Check criticized the Buhari-led government’s touted achievements regarding the economy.
It noted that Buhari as claiming that: “For the first time, 30 percent of the budget was earmarked for capital expenditure.” The NGO returns the verdict: “Incorrect”.
It went on to assert that: “In at least three years since 2008, the allocation to public projects on roads, power, railways and so forth exceeded 30 percent.
“This was in 2008, 2010, and 2013, according to budgetary data. The infrastructure share during this time was the highest in 2008, at 37 percent of the total budget.
“The lowest allocation in that period was 11 percent of the budget in 2015, which was approved by Buhari’s predecessor, Goodluck Jonathan.”
Another claim was that: “The country achieved 5,222.3 MW, representing the highest peak of power generated onto the national grid, and delivered to customers in December 2017.” It was also deemed “Incorrect.”
Africa Check stated that Buhari said the alleged improved power supply “showed government’s progress in increasing the quantity and quality of power available to Nigerians.”
Buhari had said in his speech: “Nigerians from all parts of the country continue to report better power supply and less use of generators”, he said.
The country’s long-standing electricity deficit is persistently blamed for hurting economic growth.
However, an investigation showed that power generation has in recent years, remained approximately 4,000MW, not significantly different from 2015.
“We found no evidence that Nigeria recorded a power peak of above 5,000MW, in December 2017.
“A February 2018 report by the National Bureau of Statistics and the National Electricity Regulatory Commission, shows that the highest power generated in December 2017, was 105,152 MWh/h (4,381 MW), on 8th December.
“Nigeria’s highest generation ever took place on 25th August, 2015, with 4,811 MWh/h produced”, Africa Check noted.
Meanwhile, the former Minister of Aviation and a Peoples Democratic Party Chieftain, Femi Fani-Kayode, had in his submission, faulted President Buhari’s Democracy Day speech, describing it as disgusting and full of lies.
He said: “I was disgusted with @MBuhari’s Democracy Day speech. It was filled with lies, deceit, propaganda, false narratives, questionable assertions, fake facts and figures, and Goebbelian mendacity and falsehood.
It was a tale told by an idiot: full of sound and fury, signifying nothing.
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