‘EIU report on Nigeria is general overstatement’
The country report 2017-2021 of the Economist Intelligent Unit (EIU) on Nigeria’s economy has been described as not only biased, but general overstatement, as it ignored external and internal factors that are now in favour of Nigeria.
While there have been series of positive forecasts from different quarters for the country since this year, EIU noted that domestic challenges will keep the country and its policymakers unsettled for the next four years.
The development however, is now raising doubts over the authenticity of various forecasts, the motive behind them, what determines the measurements and how they are arrived.
But the Managing Director of Afrinvest Securities Limited, Ayodeji Eboh, said recent developments in the country is showing that it is fast regaining traction and on the path of recovery.In a note to The Guardian, he pointed out the just released Purchasing Managers’ Index (PMI) for June, showed improvements in business and investment sentiment.
“Following the improvements in foreign exchange market liquidity, which trailed the launch of the Investors and Exporters (I&E) FX window, activities in the manufacturing sector have strengthened as the manufacturing PMI expanded for the third consecutive month.
“The three consecutive increases in PMI reading, has even reinforced our forecast that the economy will record positive GDP growth as early as the second quarter of the year,” he said.
The analytical arm of the popular Economist Group also wished away the global commendations on the nation’s Economic Growth and Recovery Plan, saying there is little in the document to suggest that the leadership is ready to embark on market-oriented structural reforms.
“Successive Nigerian governments have paid lip service to the idea of market reforms” the report said, noting that where it exists, only slow progress is recorded and “we expect this to remain the case,” it said.
Admitting the progress made by enacting a new law in the troubled oil sector, it maintained that implementation will be a challenge, as the usual lack of openness and corruption remain at large.“The non-oil tax take in 2017 and 2018 will increase in tandem with the recovering non-oil economy and government efforts to widen the tax base, but this will be from a miniscule base and oil will remain dominant.
“We expect 2019 to be more challenging given our forecast of stronger global headwinds, which will sap confidence. Spending will remain high around elections and revenue will be constrained by stagnating oil prices…Fiscal deficit will increase to 2.8 per cent of Gross Domestic Product.
“Monetary policy will concentrate on attempts to support the economic recovery, while limiting inflation and boosting the weak currency. This will yield contradictory pressures in the early part of the forecast period, with private sector desperate for cheaper credit to spur growth,” it noted.
An economist, Dr. Biodun Adedipe, said the denial of government’s commitment to market reforms by the report was the height of professional irresponsibility on the part of those involved in the Nigeria Country Report.
“While I am not one of those who put together the document, any economic blueprint that describes intentions, objectives, targets and financial plans, with timelines, is not far from commitment. So far, proceeds of recoveries from corrupt people are being used as part of budget financing.
“Isn’t this enough to show that something different is happening about corruption. It is all aimed at painting the country bad entirely. Why do they not comment on their countries’ receipts of corrupt proceeds? I am beginning to question their motives,” he said.
The Managing Director of Cowry Asset Management Limited, Johnson Chukwu, while admitting that the EGRP has good plans, however reiterated that the only challenge is that it is not detailed.“It is tall on purpose, but short on implementable descriptions and details. If you say you will be self-sufficient and will generate 10,000 megawatts of electricity, for it to be believable, you must also list the plants targeted, and how you will build the plants, including the sources of the money. Otherwise, it is a wish list.“If you are not detailed, there is no way the investors will jump at the plans. The truth is that the document needs an addendum, for clarity purposes,” he said.