In
2 months since President Buhari took office, the Nigerian stock market
has witnessed unprecedented losses amounting to over N1.032 trillion.
The market capitalization has declined from N11.659 when Buhari came to
office to N10.627 currently as at the end of trading on Thursday July 30th. The Nigerian stock markets are closed on Friday and Monday
for celebration of Muslim Eid Holidays. The Index has lost 7.2 percent
of its value in this quarter, thus becoming
the worst performing stock
market in the world outside of Chinese Stock Market according to the 93
Global stock market rankings tabulated by Bloomberg
Many
stock market analysts both local and international all agree that among
many factors that contribute to the meltdown in the Nigerian Stock
Market includes the lack of policy direction of the current
Administration of President Mohammad Buhari. During the presidential
campaign, Buhari failed to articulate his economic development policies
and since his administration took office in May 29th such issue still remains largely unaddressed.
While
Nigerians clamored for change, it may very well be that the change
could mean jumping from frying pan into fire. Other problems leading to
the meltdown in the Nigerian Stock market may include the in-fighting
going on in the leadership of the Nigerian House and Senate. There is
also the decline in revenues from the crude oil market which has fallen
to about half of past levels. Crude oil sales accounts for nearly 80% of
Nigerian government revenues.
The
major actors in the Nigerian stock Market are foreign investors. Many
have either left or are staying on the sidelines currently waiting to
see the direction the current administration is going. Many foreign
investors have changed their perceptions about investing in the Nigerian
markets which they now see as risky partly due to lack of direction of
current administration.
The
Acting President of Chartered Institute of Stockbrokers, CIS, Mr.
Oluwaseyi Abe told Financial Vanguard that “Currently, the slow
governance, non appointment of ministers, lack of policy direction by
the Federal Government have all contributed to affect the performance of
the market. It is our hope that once the economy starts running the
market will improve and begin to attract investors.”
President
Buhari through his actions or lack of it, is not helping matters either
through his go-slow approach. After 2 months of coming to office, most
of his cabinet positions still remain unfilled. Some speculate that it
may take him up to September to appoint his ministers by then the damage
to the Nigerian economy would spell disaster for the welfare of the
country. Many now see Buhari’s campaign promise of attaining a one naira
to one dollar exchange rate as perhaps one of the biggest jokes of
this decade. One dollar currently is equal to about two hundred Naira.
Source: Africa Business World
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