Nigeria – No longer a smugglers paradise
The Jury is out as to whether the present border closure in Nigeria should be extended or shortened. There are short-term benefits, which include a temporary strengthening of the naira and a 30% reduction in petrol imports. The long-term disadvantages include the disruption of trade flows even though not all cross border trade is contraband (smuggling).
Whilst the argument rages about the difference between emotional economic patriotism and dynamic equilibrium, the country is suffering some reputational damage.
A review of 2019 and a preview of 2020
2019 was a year of Political Trepidation and Growing Uncertainties. Some Nigerians are happy to see the back of 2019 while others are pleased with the slow economic progress. The year 2020 in our view will be one of the economic imponderables at both the global economy and domestic markets. All eyes will be on the US elections, the Fed’s struggle for independence and the policy response of advanced economies to the global slowdown.
For Nigeria, consumers will groan about the hike in VAT, the restoration of tollgates and cost-reflective electricity tariffs. The good news is that the payment of the new minimum wage and the arrears would offer some succour to workers. Investors would also keep a close watch on the stock market and the impact of government policies on their portfolio strategy.
In this edition of the LBS Breakfast session, Bismarck Rewane and the FDC Think Tank offer a dispassionate analysis of the imponderables, flashpoints and unknowns of 2020 and try to unravel the uncertainties ahead.
Merry Christmas and Happy New Year in advance.