Edward Akinlade

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Nigeria Goes Back to The Future (Market vs. Control Economy

LBS EXECUTIVE BREAKFAST SESSION – AUGUST 2015 (Re: Nigeria Goes Back to The Future (Market vs. Control Economy))

 The CBN has come out with a rash of new regulations to defend the naira, the latest being the suspension of dollar cash deposits into domiciliary accounts in Nigeria. The naira has swung like a pendulum in the parallel market between N208 and N245. Most investors are deferring any decisions until there is some clarity, as to the Buhari economic direction.

 

Federal and state government officials have cut back on international travels and reckless expenditure, which has resulted in airline summer load factors dropping to 65%. Power supply from the grid is up at 4,800MW while airport immigration and customs officers are behaving themselves professionally.

 

In the meantime there has been a sharp lull in economic activity with retail sales of garments and electronics down to 30%. There is also the problem of 55% of flats in Lekki being vacant and rents likely to fall.

 

The impact of the uncertainty and slowdown on investment, output and profit margins is discussed in the edition of the August LBS Executive Breakfast session with B.J. Rewane and the FDC team.

LBS August 2015

 

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