By Jide Ajia
Despite slow pace of economy in mend, emerging signals from across finance and investments clime have indicated that the nation’s industries have been recovering from two years recession, 20 years ago.
Although, paths leading to the recovering destinations have been clouded with many factors, but the recent approval of the long-delayed 2017 budget should provide greater policy certainty in the months ahead.
Against odds, the federal government in recent times appeared to be up in alms while looking for growth to eventually return any moment from the current half of 2017, including good earnings expected to be delivered by companies very soon.
In addition, oil production has increased so far 2017 as threat from Niger Delta militants recedes; however, despite Nigeria initially being excluded from further Organization of Petroleum exporting Countries (OPEC) output cuts, talks have been centered on whether to include the country in the deal in a bid to curb supply of oil across international market and boost prices.
Encouragingly, the foreign exchange window introduced in April, which allows buyers and sellers to agree on an exchange rate, is succeeding in attracting dollars from abroad, with over $3 billion been traded since the launch, as well as stock market boom recorded in recent months.
To this end, the Acting President, Prof. Yemi Osinbajo, intensified efforts by forwarding over N135 billion as virement for critical and prioritized projects from the bill, to House of Representative for approval.
Through a letter forward to the floor by the office of the acting president recently, the presidency provided, with breakdown, ministries and offices considered critical to be funded.
However, the letter which The Guild sighted after it was delivered at the floor of the lawmakers, listed ministry of transport, that of power, works and housing, and office of secretary to the government of the federation, as well as office of national security adviser as beneficiaries of the virement.
Others on the list were, ministry of society and technology, trade and investment, agriculture and rural development, interior, defense and education.
The prioritized ministries and office also includes federal capital territory administration, ministry of health, office of secretary to the government of the federation, ministry of labor and employment, information and culture, as well as communication technology.
Of course, the letter before the house of representatives had ministry of water resources, that of mine and steel development, as well as ministry of environment, as government offices the presidency put under critical need for funding.
In same development, Osinbajo also assured citizens of economic recovery during his speech that commemorated June 12 election , adding that, from bleakness of recession to dawn of abundance was becoming a reality as indices indicated.
Osinbajo disclosed that the nation’s path to progress and abundance was clear, given that tools were in place and resilient, resourceful and hardworking Nigerian people were also set to go.
“I have no doubt that by the grace of God, the bleakness of recession is about to witness the uplifting dawn of abundance”, he said.
With Osinbajo’s statements of hope, assurance was becoming a reality following indices released on Tuesday that Inflation has fallen for fifth successive month, between February and June 2017, just as the Naira gains stability against dollar, and margin between interbank and parallel market rates been narrowed considerably.
However, surveys by investment analysts indicated that Nigerian Stock Exchange All Share Index (NSE) recorde encouraging result in recent months, about 20 per cent higher than beginning of 2017 value, and surge was largely attributable to new Investors and Exporters Window (NAFEX) introduced by Central Bank of Nigeria (CBN) in April.
In specific terms, transactions on NSE during current week closed with market capitalisation crossing to N12 trillion threshold for first time in over two years when it grew by N142 billion or 1.19 per cent to close at N12.085 trillion as against N11.943 trillion achieved on Monday.
Also, the All-Share Index moved to 35,000 mark, appreciating by 412.95 points or 1.19 per cent to close at 35,065.47 compared with 34,652.52 posted on Monday.
The Chief Operating Officer, InvestData, Ambrose Omordion, linked the growth to half year impresive report and interim dividends declared by some quoted companies.
Omordion added that investors’ anticipation of more improved half year earnings contributed to the current price rally witnessed on the floor of Exchange.
In the same vein, the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) in same week retained Monetary Policy Rate (MPR) at 14 per cent due to uncertainties across global market.
However, the Governor, Central Bank of Nigeria (CBN), Godwin Emefiele, explained that the MPC decided to retain MPR at 14 per cent, retained CRR at 22.5 per cent, the liquidity ratio at 30 per cent, assymetric corridor at 200 and of minus 500 bases point around the monetary policy rate.
Emefiele, disclosing outcome of 257th meeting of MPC on Tuesday in Abuja, added that the MPR was not eased because it could signal the committees’ sensitivity to growth and employment concern by encouraging flow of credit to real economy.
According to him, the MPC noted the liquidity suffering in the banking system and continuous weakness in financial intermediation, even as the MPC also agreed on the need to support growth without jeopardizing price stability or offsetting other recovering macroeconomic indicators, particularly the relative stability in the Foreign Exchange market.
As a result, the Nigeria’s foreign exchange reserves proved stable in recent months, even against a backdrop of continuing CBN intervention in the FX market.
Already, the new investors and Exporters Window (NAFEX) has picked up momentum and powered a turnaround in investor sentiments related to the FX market, with the window has traded around $3.8 billion since it launched on April 24, roughly a third of such volume has been supplied by the Central Bank of Nigeria (CBN).
Nonetheless, the nation’s crude oil production has improved appreciably, coming in at 2.05 million barrels per day in June 2017, according to the Nigeria National Petroleum Company (NNPC’s) May 2017 operations report, average daily gas supply to Nigeria’s power plants has risen by 64 per cent, compared to a year ago, May 2016.
On account of rising exports and falling imports, Q1 2017 was the second consecutive quarter of positive trade balance when exports was greater than imports, after four quarters of negative balance.
Facts obtained from the CBN data from June 2017, showed a rise in Purchasing Managers’ Index (PMI), a measure of the health of the manufacturing economy, for the third consecutive month.
According to the National Bureau of Statistics, in Q1 2017 exports of agricultural goods grew in value by 82 per cent compared to Q4 2016 and manufactured goods exports in Q1 2017 were 45 per cent more than the value in Q4 2016, while Q1 2017 saw the fourth consecutive rise in exports since Q1 2016; amounting to a 109 per cent increase year on year.