“The global financial world has been atwitter about the inversion of the yield curve. It is a phenonemon in the bond market in which longer term interest rates fall below shorter term interest rates, and has historically been a warning sign that a recession could be on the way” – Financial Times.
“Stock investors tracking corporates in the busy earnings season are slowly waking up to alarming yield inversions in advanced economies of the US and UK. In countries like Germany, Japan, Australia and Singapore, yields have flattened, mirroring a slow down in the global economy” – Economic Times.
These are clear signals and developments that indicate a move towards a recession. In the US, employers are not employing and stocks are dropping, a significant drop that has been the worst in over a decade of the US stock market. Germany has experienced a consistent contraction of its economy over four quarters, showing a drop in exports. Egypt too is in turmoil as poverty keeps getting worse, with very little FDI and their adoption of the IMF programme has not really helped. Nigeria’s former finance minister had insisted that Nigeria was not going to devalue the naira and that we were going to depend on a local solution to our local problems. Importantly, most of our economic woes are self-inflicted.
Today, Nigeria is the darling to world economic super powers like the US and China who are locked in a trade war, which has not helped investors from both countries. Huawei was sent packing out of America and it is looking to African countries for industrial space. America has multiplied tariffs on Chinese goods and negotiations have been dead-locked. This has shifted the attention of investors to countries like Nigeria, who, aside oil wealth, are rich in so many minerals, agriculture and a very huge human resource of both skilled and unskilled labour.
China has brazenly earmarked 16 to 25 billion dollars, the US has so far pumped in over 2 billion dollars in agriculture and fast food outlets. Just recently, Goldman Sachs made a 30 million dollar investment in a Nigerian Logistics start up, Kobo360, for expansion and development. This is a categorical statement to US banks and investors that Nigeria is the new destination for business investments aside oil and gas.
Rice, cocoa, sugar, cotton and even maize were previously imported and the importers enjoyed tax waivers and other importation levies that made the prices of imported goods healthier than the locally produced ones, thus eroding the local production and market for Nigerian goods. The federal government is now rolling out policies and programmes that will further protect and grow foreign reserves, protect indigenous farmers and businesses, and eventually boost exports and curb inflation.
Mr. Bismarck Rewane, renowned economist and banker, has explained that PMB’s instructions on the ban of forex for importers of food and milk, are policy directions that will make the necessary impact in time to come. They are policies that will yield results and bring about the necessary economic impacts in the long term.
Nigeria’s inflation rate has been on a progressive decline, perhaps on the road to single digit, even if not immediately; it stands at an impressive 11. 08 per cent from a previous 11. 22 per cent. I came across some undergraduates from Bayero University, Kano, who are currently in the Hultprize Accelator in the United Kingdom. Ubaidurrahman Suleiman from Kano state, Abdulhafiz Adebayo from Kaduna state, and Mustapha Sani, from Katsina state. They are among the top 40 finalists in the world largest student competition. They qualified from a pool of 250,000 students from all around the world and they are hoping to qualify for the top six, to pitch their endeavour at the United Nations for the 1 million dollars cash prize.
They have developed a technology that uses solar technology to convert agricultural waste to smokeless charcoal for Nigerian households. This will provide jobs for youths in rural Nigeria. Brycoal, they termed it, will stop the burning of agric waste, and also the felling of trees for firewood, where 1.7 million trees are cut down daily in Nigeria for firewood and other uses. This solution is capable of saving over 25 million trees in 10 years, or even less, if properly developed. They sought the support of Nigerians to share and chip in.
There is also a young group of Nigerians led by Godwin Josiah, whose group of teenagers have been able to use just a green fabric which they bought from a six-month savings, a smashed smartphone, and a tripod from a broken microphone, to produce sci-fi films, hoping to break into Nollywood. Their short sleek clips showed them being transported anywhere in the world in a sci-fi film background. They wanted to show that kids in Nigeria were able to do something different aside the usual narrative.
Governor Nasir el-Rufai of Kaduna state met with the kids and the Kaduna state government is working with the families of the group to help develop their skill and provide all the necessary support. The youngest of the group, eight-year-old Rachael Yusuf, will just be enrolling in secondary school at the end of the 2019 summer holiday.
The promotion of indigenous producers and local talent and skill is the way to go. And this is better done by implementing economic policies that protect local content. The world’s attention and investment focus is now on Africa, with Nigeria being prime to the actualisation of this endeavour. We will definitely face a lot of economic sabotage via the security challenges manifesting in different forms, from kidnappings, assassinations, veiled protests and anti-government movements, religious movements and so on. We cannot afford to drop the ball and lose focus from reclaiming our nation from the doldrums of poor economic programmes and prebendalism, which have actively worked against our economic growth and political stability.
The world is in economic crises, and that mischievous desire to plung ourselves in political crises will not only disintegrate the country, but would perish lives and property which are irrecoverable. We cannot choose to be immune to the manifestations of these struggles from countries like Syria, Libya, and lately Sudan. We have a chance, now more than ever, for the rebirth of a stronger Nigeria, that can benefit from the spoils of an economic war of world super powers; and implement an economic and industrial revolution for our country. Political figures and presidential aspirants have been in the open to protest against government, or government policies that are aimed at improving the growth of our economy.
For example, Moghalu says PMB has no business instructing CBN, while in fact as a former CBN deputy governor, he ought to know that the CBN Act expressly states that CBN makes decisions with recourse to Mr President. But when GEJ sacked Sanusi back in 2014, in breach of CBN laid down guidelines, he sided with GEJ. Sowore was also a presidential aspirant. Why didnt he lead a revolution (or protest) before 2015, after all it is the same government? Why lose an election and then come back at it with an overnight quest for revolution? Isn’t it political? We must see clearly, that most of the distractions coming on are mere political vituperations to unsettle the government in power. Let us choose to give support to our youth who have faith and belief that their country will be a better place, where innovation can thrive and produce our own versions of the Gates, the Zuckerbergs and the Buffets. The wars being invoked are not good but pure evil, dressed in sheep’s attire, promising healthy lamb and pure milk, but in truth, they are poisonous and lethal. Nigeria is a better place, and you can ask even Al-Zakzaky.