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2019: Issues that will shape economy

2019: Issues that will shape economy

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This year, is unlike any other. It is an election year, carrying along with it, all the trappings and vagaries that accompany such monumental events. They include anxiety, uncertainties, delayed investment decisions and, in some cases, apathy. The general elections, among other issues, will impact the economy this year, reports Group Business Editor SIMEON EBULU

Globally, election periods are inauspicious times for businesses, whether micro, or macro. It matters not  whether the firms  are indigenous , or conglomerates. Investors will normally adopt a wait-and-see attitude when it comes to making vital business decisions. It has happened before in the country, and it may not be any different this time around. That is why any talk around the business environment at this time, is usually done in an atmosphere of conjecture, nothing definitive, or done with  finesse, or certainty.

During our previous elections, the capital market has been known to be one sector that has taken the heat, when it  comes to retention, or movement of portfolio instruments. The Nigerian capital market holds the record of gauging the mood of investors’ disposition towards any election. The moment there’s a sense of unease, or loss of confidence, uncertainty in the processes leading to the election, or the outcome itself, investors, of all classes, but most especially, foreign portfolio ones, move all their holdings en-masse to safer markets until after the elections and whatever their outcome.

This scenario is envisaged to play out  as we transit into the general elections about 42 days from now. Across the economic trajectory, the prevailing attitude is, let us wait and see.

The agric sector is being projected to experience a lull. Experts are of the opinion that the uncertain political outlook would prove that purposeful leadership is a factor in reducing regulatory burdens on farmers.

For months, agric businesses have being put on hold awaiting the outcome of the general elections. Experts say the policy goals, post-election will go a long way in improving the outlook for agriculture.

In the aviation sector, the push this year is for strict enforcement of civil aviation regulations by the Nigerian Civil Aviation Authority (NCAA) on both scheduled and unscheduled airlines. This clamour is predicated on the rise in the number of incidents involving operators, which recently came under the hammer of the regulator.

There are calls for  the NCAA to awake from its slumber to discharge its oversight duties concerning both technical and economic audit of airlines.

There is hope for the power sector this year going by assurances of the Minister of Power, Works and Housing, Babatunde Fashola (SAN). He underscored government efforts to ensure that Nigerians enjoy improved and steady power delivery. In his words: “We are optimising the capacities of the power plants and other facilities that we have.  We are focusing on taking gas to power plants that are idle because of lack of gas.We are continuously working on how to solve gas supply problems with the Nigerian National Petroleum Corporation (NNPC), gas companies and others. The 7,000Mw we produce now doesn’t come from the sky; we are only making what was not working to work.”

The Organised Private Sector (OPS) sees high government’s debt service obligations as constraints to economic growth. They also called for sustained diversification of the economy. The Director-General,  Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf said with the limited progress in the ongoing effort to diversify government’s revenue sources, the performance of the oil and gas sector would remain a critical factor that would shape the outlook for the economy in 2019.

He said given the challenging economic conditions, key policy reforms would be needed to support and sustain macro-economic stability. Yusuf said foreign exchange management framework that reflects the market fundamentals, the acceleration of the economic diversification agenda, normalisation of Lagos ports environment, the oil and gas sector reform and especially the Petroleum Industry Bill (PIB), should be in place.

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