The world is burning but Nigeria’s economic managers insist that the country is sheltered from its ravaging impact. The posturing makes one wonder whether the managers live on this planet or on the moon. Is there truly anywhere in the world that is not feeling the heat of the financial meltdown raging across the continents, from the Americas to Europe, from Asia to Australia? At the last count, over $2trillion has been injected by governments all over the world to shore up their tottering banking system and the stock market and to get the economy running once again. And those governments are still mulling injecting more billions of dollars, as the fears of recession grow.
But here in Nigeria, we say there is no problem. We delude ourselves that we are a special nation, that we are not affected by what is happening in our global village. The stance is not amusing at all. Last week’s show at the Senate by four of Nigeria’s economic managers was like playing the ostrich. Provided with a platform to seek legislative support for an economic palliative that this nation would need sooner, the economic leaders bungled the opportunity. They turned grandstanders and literally played to the gallery. How could any reasonable person have denied what was obvious even to the layman; that the economy of our nation has been unraveling with the massive decline of the stock market and that it will only take weeks, not months, before the cancer in that market spreads to other sectors.
CBN governor Charles Soludo’s performance was the most dubious of all. To assure the senators about the well-being of the market, he said despite the emasculation of the market, the capitalisation figure in 2008 is higher than it was in 2007. I do not know from where he got his statistics. But there are other figures that trigger a lot of alarms: by February this year, First Bank’s capitalisation alone reached N1.03trillion, 1/13th of what the entire market was in 2007. In March, market capitalisation slumped to N12.1trillion, despite all the billions raised via public offers and rights issues by some of the listed companies. On 15 October, it shed further weight, standing at N9.26trillion. If Mr. Soludo is not worried by this, let’s ponder over these other figures: In 2007, the exchange recorded a trading value of N2trillion, an average of N172billion monthly. In two days last week, the total value of trading was less than N1.6billion. A hitherto bubbling, active market has slumped into Slumberland.
As stock prices continue to slide into the abyss, stock holders are sulking. Portfolio values are evaporating and confidence in the market has taken a flight into the stratosphere. No better gloomy picture of the market could be painted than what happened on the floor of the market on 20 October. All listed stocks recorded price losses, the volume of transactions dipped by 58 per cent on what was recorded 17 October. Worst of all, the total value of transactions in Naira terms slumped from N1.185billion on 17 October to N966million on 20 October. If the market operators and regulators had been hoping for a market rebound, Monday’s trading results must have sent them into the very depths of despair. The stock market has collapsed, virtually, with sellers swamping it, with no buyers in sight. Anyone familiar with the market in the last two decades, will agree that the scenario daily witnessed on the exchange is unprecedented and frightening, with people who want to sell stocks now unable to find buyers, with values of portfolios massively shrinking, with many stocks trading below recent public offer prices, with retirees and those planning to retire, watching in horror as the value of their savings vanishes into the thin air. More frightening are suspicions that many of our banks, mutual and pension funds are massively exposed to this market that has, from all indications, crumbled.
It is highly stupefying for the economic managers to deny the obvious. For daily, we are confronted with the reality that we are far from being cocooned from what the Western media have dubbed the global financial crisis. One can recall several utterances by those who should know that our economy is being battered by the global crisis and that if the effect is not so pronounced now because of the resilience of our people, the effects will sooner or later be felt by all. First, Aliko Dangote at the first crisis meeting on the collapsed stock market told the story of how a foreign partner of a Nigerian bank withdrew over $2billion of its investment in one fell swoop. Even the CBN governor at the forum told the story of how foreign institutional investors contributed to the collapse of the market by divesting their holding. We have heard the cries of transport minister, Deziani Madueke, how the banking crisis abroad would affect capital projects in the transportation sector. We have also been told that a lot of foreign capital injection in the oil and gas sector may be jeopardised by the financial meltdown ravaging Western economy. And we have had officials admitting that the more than 50 per cent drop in oil prices from its peak of $147 in July, would affect the 2009 budget.
How terrible can things become before the officials acknowledge that they are cancers requiring quick surgery. The Western world and the Asians are already trying to cure their problems. Our leaders must wake up now and really do something before it is too late. The political leadership should neither believe the assurances of the economic managers that everything is well nor believe the nonsense being uttered by some of the stock market operators and regulators that the depression-hit Nigerian market is in the throes of a self-correction. On the contrary, the massive decline in the latter is a culmination of a systematic abuse and manipulation by the guardians in the NSE, SEC and many licensed stock brokers. In the past, stockbrokers would tell an investor to buy a particular stock. If the would-be investor retorted that the stock does not offer a good yearly yield, the stockbroker would persuade further that he should buy because the supposedly bad stock would appreciate in value! It was an absurdity that was commonplace in the market in the Okereke-Onyiuke years, not to talk about how the NSE breached rules to allow companies that had not traded for the minimum years to raise money from investors. There were other absurdities as well: stocks yielding less than 1 per cent, like some bank stocks appreciating in value more than the level they should be trading at. In recent times, especially in response to the crisis in the market, the market regulators introduced some measures to curb the abuses of the past. They came too late and they are tokenistic.
The Yar’Adua government needs to do more than this and indeed, should sack the minister that told senators that government has no business regulating the stock market or interfering in the market. Who else, but government, is better suited to protect ordinary savers and investors, as the experience in the West has shown?
In my view, the first step that can be taken to salvage the market will be to demand some accountability from the leaders of SEC and NSE. The NSE and SEC need to be probed over the rot that we are witnessing today. If need be, let us impose sanctions to serve as a lesson for the future. N2.3trillion vanishing into thin air is not like chicken change that one can forget in his suit pocket. It is a lot of money and it would not be out of place to bay for some blood. The second step to salvage the market will be to launch a campaign of restoring confidence so that buyers and sellers can resume their healthy transactions. It is the harder task but it is achievable.
The third step is that government should bring out cash and buy more stocks in blue chip companies. This will massively inject cash into the market and help to improve the liquidity all market players can play with. At times like these, we cannot as a nation continue to pretend that all is well. All is not. Our economy is sick. The culture of denying the obvious must end. There is a raging fire in our economy; let’s put it off before it consumes all of us.
adebiyi Orilabawaye
28 October 2008 14:20Well said their Bayo.Let our leaders continue to blow hot and cold,Nigerians know who and what to believe.The reality on the floor of stock exchange is too glaring to be disputed by any sophistist
mike akwa
28 October 2008 23:21How can the stock market lose more than 3.5 trillion naira due to depreciating price of stocks and those constitutionally entusted with the responsibility of reversing this decent to ’sudden death’ of our economy dish out lies to our ignorant ’sinators’.
Yar ‘Adua must act now b4 unmanageable crisis envelope Our dear native land -Nigeria.
Soludo,’Sham’sudeen, Al Faki and
Daggash should be sacke for their perfidious, treacherous and satanic attitude to issues that affect tens of millions of Nigerians.Yar ‘Ardua Please Act now
Abimbola Abubakar
31 October 2008 16:43Bros, I wonder why you are losing sleep over something you know little or nothing about. To the best of my knowledge. you are only deft at putting words together and should therefore not delve into other people areas lest you become another PROPHET OF DOOM. If the managers of our economy and those who should know for that matter say there is no cause for alarm, who makes an authority to dispute their figures. After all, you were and still alive when Ndidi was chosen to head the NSE and Charles for the CBN. If we need your advice, we shall seek you out. But I have printed this out and I am certain it surely will be useful soon as a reminder. But I just want you to take temporary solace in the words of an elder who said he delights in people not heeding his warnings so that when evil eventually befalls them, his song will be, “I warned you”.
alex omeke
3 November 2008 21:27Bayo
I have respected your write ups especilly during the dark days of General Abacha but I cannot agree with you on this one. Dr Charles Soludo a prominent Ibo son an economis guru, a whiz kid and a new kid on the block has done more for the country million times more than his predecessors in the office. Your bashing him makes no sense at all especially when the heat is all over the world. I know most of you do not sleep well because Okoro man has occupied a seat meant for certain people. Charles an academician and has excelled in all things he has done in his life and have proved so too. He is one of my favorite economists , others are Prof Oyetunji Abolade of the blessed memory God bless his soul, Prof Samuel Aluko a genius of all time and some others I have high respect for.
One of the things some of you that have priviledge to do and will do is to give honor to whom honor is due. He is yet to be arrested for trafficking in foreign exchamnge as others before him did. You have mentioned Mrs Madueke and Dr Ndi Onyuike both Ibos and who cares. The more people like you shy away from ethnic pettiness the better. Dont forget that Dr Onyuike provided more jobs through her high valed expertise courtsey of her training at New York University. we had docile stock market operators who do not know their left and right but were allowed to be there because incompetency is the watch dog in Nigeria. Bayo come it off and be your usual self. My highest regards to you for fighting General Abacha and Chief Obasanjo. For your information I love those two men because they do not have pretense in their dictionary no matter what.Dr Soludo appointment by OBJ has yielded more dividends than the opposite. Aluta continua Bayo to you and your hard working member of the NEWS. Please do write balance news.
takebo alani
5 November 2008 17:23Bayo is doing his job as a journalist. In the media house, whether Radio, Newspaper or TV, we have vibrant people who are administrators, lawyers, accountants, just name it, and who knew everything about economy. it is their job. This is not a matter of Okoro, Hausa or Yoruba ethnics. Tell me, how do you want Nigerian economy to be buoyant when our so-called leaders, Senators, House of Reps, even governments at all levels are buying cars for themselves costing about trillion naira. Is that the way of distributing dividend of democracy? Is that not the way of siphoning our money? Let Soludo or anybody concerned go into details of what Onanuga wrote. Definitely he must and would find something reasonable. Don’t say Bayo should concentrate on media writing. We should all join hands and salvage Nigeria economy before it is too late, because all of us depend on it.
Pazfy Obi
9 November 2008 17:55Thanks for the light your write up brought. It is typical of our government officials to always deny the obvious. One basic reason for this is that they do not have answers/solutions to problems they are in office for. Or how can you imagine our officials to always diagnose problems without following them up with solutions, that could be the quickest way to exposing their inappropriateness for the offices they occupy at the expense of the people.
akinlola Olumuyi
12 November 2008 15:10Re: Alex Omeke
I believe that Mr. Bayo Onanuga, being an erudite journalist has written so well that if his advise is heeded on time, it will save Nigeria from economic doom which is obvious and glaring to the discerning, who is not blinded by ethnicity like Alex Omeke. The stock market is in deep trouble and yet Soludo, Shamseeden (Finance Minister), Ndidi Onyuike of NSE and SEC are in deep slumber. Telling blatant lies to the “sinators” and yet Alex Omeke in your prochial thinking and academic backwardness, you are thinking in terms of Ibo, Yoruba or Hausa! It is very surprising to say the least. Investors are weeping and yet our so-called economic managers are saying there is no problem. Let me say it loudly that Nigerians must be able to discuss in a manner that will help our country. The Government of President Yar Adua is sleeping and need to wake up to her responsiblities. Truely, there is fire on the mountain - of our economy.
Dr. Akinlola works for an international organization in Cote d’Ivoire.
alex omeke
15 November 2008 04:21I read with pity the irrresponsible statement credited to me by the afore mentioned. A sorry ass hole and an illettrate like akinola has the right to say what he likes. Oga olumuyi are aware that the stock market has crashed in USA of all places , in Britain where your people go to worship them and prostrate as lesser human beings you are not and Japan. The correct spelling of sinator is senator. Remember that I said and I have continue to say that I respect Bayo of all people when when I disagree with his write up, courtsey ofmy understanding and training in economics and Finance and having worked for JP morgan Chase Manhattan Bank in USA , I am bound by understanding to disagree with what he wrote no matter what. Akinola please go and learn simple tenses because your use of english and write up is embarrasiningly offending especially where you hail from that have produced legends in in English like Prof Wole sonyika. Next time if you need to use the computer, click abc for syntax error and grammar fragmantation which your english is full of. The spelling of prochial as you did write is parochial. About blantant lies to the senators, most of them are made by Chief obasanjo for obasonja AKA 3rd term stooges. Let me put you at where yo belong there is a global down turn on economy and is never a case of wilful destruction like we have in Nigeria. We select incompetent people nad place them in authority because Nigeria is scared that if an Ibo man gets to rule Nigeria , they will end prostration to people set the record like Dr Okonjo Iweala did and move the country forward. Akinola go to the library and harness an opportunity and think right. I usually weep daily in USA where I live, when I see great people waste, and I will name few of them, peole like Profs samuel Aluko an ecomocs guru Bola Akinyemi a thorough bred political scientist, Duro Onabule the former Editor Of Defunct Concord, this gentlemans write up on The sun newspaper makes me cry, wole sonyika, woneder and whiz kid, Brigadier Benjamin Adekunle who your people has consigned into the dust bin of history, God forbid, Bayo Onanuga single handedly fought Abacha god bless his soul, and where is Kunle ajibade adni million plus vibrant youruba scholars that have made positive progress towards humanity and life. The ransome Kutis will not be left out plus a rare gem Prof Oladipupo Akinkugbe the Tomori brothers of Biology fame, and I will not fail to mention Notable lawyers like Chief R.O.A Akinjide, J.o .K Ajayi , Alani Bankole all Sans who have made names for themselves and the world to mention but a few. We will also mention Chief Obasanjo for the good job he has done so far. Many decent people like Chief reuben Fasoranti have refused to let AD die . God bless them. Remenmber that up north we have Irrepresible Col Umar, Gen Domkat Bali, General M Buhari, Gen Al Kwazir and a olt of other wonderful people all over Nigeria. Finally chicken head akinola olumuyi , please for heavens sake go and enroll for O Level and learn how to read and write, then get back to me for futher reply. You need to write President yaradua the Obasajo’s made President. Next time vote and defend your vote.
alex omeke
18 November 2008 04:56illittrate like Akinola has the right to say what he likes. Oga Olumuyi are you aware that the stock market has crashed in USA of all places, as well as in Britain where your people go to worship them and prostrate to them like you are a lesser human being. Today Japan has officially told the world that they are in recession. The correct spelling of sinator is senator. Remember that I said and I have continued to say that I respect Bayo Onanuga of all people. What I did was to disagree with his write up on Fire on the mountain. My understanding and training in economics and Finance and my working experience with CITI CORP and JP MORGAN Chase Manhattan Bank in USA will not let sit and agree with whaever anybody said because he is a fire brand journalis.. I am bound by understanding to disagree with what he wrote no matter what. Akinola please go and learn simple tenses because your use of English language and write up is embarrasingly offending especially where you hail from that have produced legends in English like Prof Wole Sonyika. I strongly doubt if you have a PHD as you claimed. Next time if you need to use the computer, click abc for syntax error and grammar fragmantation> Your English stinks period. The spelling of prochial as you did write is parochial. About blantant lies to the senators, most of them are made by Chief Obasanjo for Obasanjo AKA 3rd term stooges. Let me put you at where yo belong > There is a global down turn on economy and is Nigeria case is peculiar. Today MORGAN STANLEY an authority in investment banking firm credited NIgerian economy as healthy. A banking guru Erastmus Akingola has told the worl that the Nigeria bank is safe. Today 11/17/08 the stock market headed by Dr Onyuike rebounded to astronomical heights. Today again Dr Chukwuma Soluda has benn nominated by United Nations to help to restructure the world economy. Please go and read the Leadership Newspaper for clarification. We select incompetent people and place them in authority because Nigeria is scared that if an IBO or A YORUBA man or wowan with sound credential cannot rule Nigeria because of business as usual. It is on record that Past Finance Ministers like Dr Kalu Idika, Dr Okonjo Iweala did and move the country forward. Chief Falae, Alhaji Arogundade and many others left an indelible mark at the financial sectors. Akinola go to the library and harness an opportunity, learn and reason deeply and think right. I usually weep daily in USA where I live, when I see great people waste, and I will name few of them. Otstanding rare gems like Profs Samuel Aluko an ecomocs guru and a replica of USA Alan Greenspan. I am sure you do not know whom Alan Is. Bola Akinyemi a thorough bred political scientist, Duro Onabule the former Editor Of Defunct Concord. This gentlemans write up on The sun newspaper makes me cry when I read his in depth article. Prof W ole Sonyika a wonder and whiz kid, Brigadier Benjamin Adekunle whom past Nigeria has consigned to the dust bin of history, God forbid. And Bayo Onanuga who single handedly fought Abacha God bless his soul. It might interest you to note that when Gen Abacha detained Bayo and harrassed Ajibade and his collegues I was at the Amnesty International s Office in complaining about the irresponsible act on their detention. Where is Kunle Ajibade and million plus vibrant Youruba scholars that have made positive progress towards humanity and life. The Ransome Kutis brought christianity to us.Worthy mention of rare gems like Prof Oladipupo Akinkugbe, the Tomori brothers of Biology fame, and Notable lawyers like Chief R.O.A Akinjide, J.O .K Ajayi , Alani Bankole all SANS who have made names for themselves and the world to mention but a few. We will also mention Chief Obasanjo for the good job he has done so far. Many decent people like Chief Reuben Fasoranti have refused to let AD die. Nobody can kill Chief Aolowos indelible handwork. God bless them. Remember that up North we have Irrepresible Col Umar, Gen Domkat Bali, General M Buhari, Gen Al Kwazir and a olt of other wonderful people all over Nigeria. Finally chicken head Akinola Olumuyi , please for heavens sake go and enroll for O Level and learn how to read and write, then get back to me for futher reply. You need to write President Yaradua the Obasajo’s made President. Next time you vote try and defend your vote.
Comment
billy ejaosan
19 November 2008 15:47alex.
Your write up was based on ethnicity - and you jumped the line - the modus here is about economy - is nigeria part of the world ? if yes your argument need a second thought - if you are really living in the states.
I submit
Alex Omeke
23 November 2008 22:31Brother Billy
I do not need a teacher to tell me that lampooning Dr.Soludo, Rd. Oereke-Onyuike and the guy who heads the SEC , are all Ibos. I will never jump the line as I have been proved right that Dr. Charles Chukwuma Soludo have been appointed by the United Nationsw to help fix the world economy. Nigeria has a President , and the people mentioned are not responsible for fixing it. I dop lie in States and have lived there for 29 years. For your information , this is the second time a Nigerian have been appointed to such a second sensitive post..Remeber we are not in Nigeria where we have never do well managing our desting, our economy, our fate and our future. Billy be honest, read and read Boyos article again you will understand what I mean. Iam an un-repentant IBO irredentist and have no aoplogy at all being so. The charistmatic former Onformation Minister under IBB has asked in one of our daily Newspaper that the President of Nigeria do invite Dr. Soludo for a hand shake for such recognition given to him by the world as the only honor NIgeria gets is drug and notorious crimes commited daily and the slur that we Nigeria face daily overseas for the bad image manifested by certain irresponsible human beings. Remember that I mentioned othr names all over Nigeria. In 1975 WE had Prof Adabayo Adedeji whowas then appointed on merit as Economic Adviser to Africa. Our own Dr. Okonjo Iweala now heads Word bank with Dr. Mrs Ezerkwesiliin a sensitive appointment at same noble institution. The are IBO people appointed on merit but not on quota basis. That must change soon. Billy kindly submit to me why people like Prof Omo Omoruyi cannot help our policy makers, Drs. Sam Aluko, DR Tam David West, bolaji Akinyemi, Duro Onabule, Chief Reuben Fasoranti, Chief GOK Ajayi, Chief Akinjide, Cols Mohammed Umar, Lawan Gwadabe , Mumuni, Generals Domkat Balli, Magoro Al Kwazir Benjamin Adekunle, Felix Mujakpero, Ishola williams, and numerous others to mention and I would include bayo Onanuga who will spit at any onens face if you dare offer him bribe, Femi Falana, Barrister Bola Akinyele of 42-44 Latunde Labinjo Avenue Lagos. Give these people contract to clean Nigeria, I bet my life that within 30days we will turn from developing nation to most developed nation. God bless Nigeria, and finally thank God I am an Ibo man. No apologies. States cannot help Nigeria. We can salvageit and it will be done in Gods time. If any one will tell me that a black man whose father is from Kenya will be elected as USa President i will laugh at the person. Gods appointed time cannot be stopped. thank you my brother Billy. Do we have an Economic Adviser to the President of Nigeria Billy?. Yes there is fire on the mountain in Nigeria but we lack water to put it off, and we have more than enough water AKA human resources to fix our economy. ,
Alex Omeke
23 November 2008 22:44Brother Billy
I do not need a teacher to tell me that lampooning Dr.Soludo, Dr.Okereke-Onyuike and the guy who heads the SEC , are all Ibos. I will never jump the line as I have been proved right that Dr. Charles Chukwuma Soludo have been appointed by the United Nations to help fix the world economy. Nigeria has a President , and the people mentioned are not responsible for fixing it. Of Course I do live in States and have lived there for 29 years. For your information , this is the second time a Nigerian have been appointed to such a second sensitive post..Remeber we are not in Nigeria where we have never do well managing our desting, our economy, our fate and our future. Billy be honest, read and read Bayos article again you will understand what I mean. I am an un-repentant IBO irredentist and have no aoplogy at all being so. The charistmatic former Information Minister under IBB has asked in one of our daily Newspaper that the President of Nigeria do invite Dr. Soludo for a hand shake for such recognition given to him by the world as the only honor NIgeria gets is drug and notorious crimes commited daily and the slur that we Nigeria face daily overseas for the bad image manifested by certain irresponsible human beings. Remember that I mentioned other names all over Nigeria. In 1975 WE had Prof Adebayo Adedeji who was then appointed on merit as Economic Adviser to Africa. Our own Dr. Okonjo Iweala now heads Word bank with Dr. Mrs Ezerkwesilii occuping a sensitive appointment at same noble institution. The are IBO people appointed on merit but not on quota basis. That must change soon. Billy kindly submit to me why people like Prof Omo Omoruyi cannot help our policy makers, Drs. Sam Aluko, DR Tam David West, Bolaji Akinyemi, Duro Onabule, Chief Reuben Fasoranti, Chief GOK Ajayi, Chief Akinjide, Cols Mohammed Umar, Lawan Gwadabe , Mumuni, Generals Domkat Balli, Magoro Al Kwazir Benjamin Adekunle, Felix Mujakpero, Ishola Williams, Ebitu Ukiwe and numerous others to mention. I would include Bayo Onanuga who will spit at any onens face if you dare offer him bribe, Femi Falana, Barrister Bola Akinyele of 42-44 Latunde Labinjo Avenue Lagos. Give these people contract to clean Nigeria, I bet my life that within 30days we will turn from developing nation to most developed nation. God bless Nigeria, and finally thank God I am an Ibo man. No apologies. States cannot help Nigeria. We can salvageit and it will be done in Gods time. If any one will tell me that a black man whose father is from Kenya will be elected as USA President I will laugh at the person. I read with pity that some members of House Of Rep refused a motion to acknowledge Prof. Soludos appointment but we are celebrating Obamas victory in both house. Gods appointed time cannot be stopped. Thank you my brother Billy. Do we have an Economic Adviser to the President of Nigeria Billy?. Yes there is fire on the mountain in Nigeria but we lack water to put it off, and we have more than enough water AKA human resources in Nigeria.