Markets expect finance minister that will inspire confidence

Nigerian public office holders have consistently put politics at the center of economy management, which is a major disincentive for the economy and its markets.

As the whole world patiently awaits President Muhammadu Buhari’s list of cabinet members in the wake of high expectations around improved economic management, Nigerians cannot afford to have as finance minister, someone who cannot inspire confidence.

A dysfunctional finance minister would only frustrate efforts around stimulating broad based and all inclusive growth policies in Nigeria –one of the major factors that have continued to affect the country’s ranking in the global competitive index (GCI).

“Given where the economy is today and the several challenges, the new Finance Minister must be someone that will inspire confidence. He or she must be a steady hand with experience and understanding of the economy”, said Victor Ogiemwonyi, CEO of Partnership Investment Plc.

Ogiemwonyi further said, “The current uncertainty is causing markets to be jittery, the new Finance Minster must immediately take steps to calm the markets and give reassurance that economic policy will be market oriented and consistent.”

Aigboje Higo, managing director, Capital Bancorp plc told BusinessDay that the market expects to see a finance minister  who understands the times we are in.

According to Higo, the person must be incorruptible, bold and firm; can manage an economy with dwindling revenues; can cut cost and waste in a meaningful manner; must have contacts to access long term cheap foreign financing; must be creative in policies to move the country back to at least 6-7% growth rate per annum; and must understand how international financial markets work, and can take advantage of them.

The markets have continued to perform below expectation, as foreign and institutional investors who are major buyers of Nigerian assets choose the cautious path.

Victor Ndukauba, vice president, Investment Banking, Afrinvest (West Africa) Limited told BusinessDay that the market would like to see a new finance minister who possesses the requisite skills set and competences needed to reshape Nigeria’s parlous fiscal state… “an individual having both the credibility and charisma to champion (initiate and lead) as well as see through the various economic reforms needed to reflate the economy, particularly given the austere times we currently face.

“Our expectations are for a market-oriented finance minister, possessing a solid reputation with the international finance community and global network of development partners. The finance minister must therefore be hands-on, pragmatic and capable of hitting the ground running,” he added.

According to Ndukauba, “The market expects a minster that can appropriately dimension the challenges of the current economic model, interpret and give life to the future economic plans of the new administration within the shortest time possible.”

He said: “Specifically, the market will be interested in a finance minister that will clearly spell out government policies relating to fiscal stance on revenue/expenditure (expansionary or contractionary), economic growth, fiscal deficit to GDP, external trade (import/exports), government revenue diversification and exchange rate policy amongst others.

“ In addition, the market would like to see lots of action on structural reforms and opening up of key sectors of the economy: oil and gas, agriculture, and power – to private sector investment.”

“Given the current macroeconomic backdrop, the market will be expecting to see a finance minister that understands the unique nature of the Nigerian economy, challenges and people. The market will be anticipating a minister that will stimulate broad-based and all inclusive growth policies. The broad market will want to see key developmental policies,” said Abiodun Keripe, head, research & strategy, Elixir Investment Partners Limited.

Keripe added, “the market will want to see measures that will be put in place to boost government revenue from the fiscal angle, given the drop in crude price, curb excesses and financial leakages within the system.

“Not just boosting revenue, but also identifying and pursing new sources of revenue that will deepen economic output and great jobs.

“Fiscal consolidation is also important at a time like this, hence Nigerians will want to see a finance minister that will steer policies in this direction. Policy harmonisation between the ministry of finance and the Central Bank is also key. Hence the market will watch with keen interest how this can be achieved”, Keripe added.

Iheanyi Nwachukwu