New govt faces daunting tasks on current economic realities – Afrinvest

The incoming All Progressives Congress (APC)-led administration of Muhammadu Buhari would need to be more than ingenious in the management of available resources in the country to be able to deliver on the electoral promises as enshrined in its manifesto in the light of the current global and domestic economic realities, Ike Chioke, managing director, Afrinvest (West Africa) Limited, has said.

Chioke made the observation in Yola, Adamawa State, while delivering the 4th Atiku Centre Lecture Series organised by the American University of Nigeria (AUN).

Speaking on the ‘Review of APC manifesto in the context of current economic realities’, he noted that a “more than 50 percent decline in oil prices dampened Nigeria’s revenue generating ability and triggered significant devaluation of the naira; Nigeria’s external reserve is down 14.5 percent YtD; the Monetary Policy Committee of the CBN increased the Monetary Policy Rate (MPR) from 12 percent to 13 percent in November 2014; inflation inched higher to 8.5 percent in March from 8.0 percent in December 2014.”

According to the investment banking expert, “The Ministry of Finance projected Gross Domestic Product (GDP) growth to slow to 5.5 percent in 2015; lower oil prices triggered cut in capital expenditure for 2015 budget and increased borrowing may enhance budget execution.”

Chioke expressed the belief that the incoming administration should, therefore, wage a  frontal fight against corruption in all its ramifications.

He said, “If the incoming administration is serious about the fight against corruption, it has to be ready to fight because there are those who will resist it and fight back because their whole livelihood revolves around corruption. These are those who have collected the billions of naira in the past and could have the capacity to fight back. It has to be a fight, and they are ready to fight for a very long time,” he said.

“If you look at the APC manifesto, they talked about blocking leakages; they did speak about looking at the cost of governance; revisiting the issue of merger of overlapping government agencies, ministries, departments and other institutions. I think that’s a very prudent way to start because if you take for instance, N3.6 trillion government says it is generating at the federal level, it can be N4 trillion- that is N400 billion increase; it could even be much more than that; it could even be N4.6 trillion which means that a whole N1 trillion is actually missing and that is either because the cost structure of government is bloated. So, you are paying people who do not exist or that the revenue of government was diverted, what should have accrued to government did not get there.

“We heard what happened in 2012 when the then CBN governor raised the alarm that N1.7 billion oil money was missing, and by the time government looked at everything, they came up with about N2.3 trillion that was actually missing. When you look at the total cost of wages – payroll for that year which was N1.9 trillion so you are talking about more than total cost of employment of the entire civil service workforce. The huge amount went into a few hands; they are not more than 70 companies in the list of those in that scam,” Chioke, who has contributed to the development of the Nigerian capital market in numerous ways, said.

Earlier, Margee Ensign, president, AUN, said the university settled for the topic because it is both current and forward-looking, and that it is an issue that is very important to Nigerian citizens.

Ensign also expressed gratitude to Afrinvest for its humanitarian roles, particularly to AUN during the challenging period of the Boko Haram insurgency when the university took the responsibility of catering to the internally displaced persons (IDPs) within its community