Rewane Predicts Imminent Defaults on Bonds

present reality in the Nigerian equities market does not appear to wear such a face due to the significant headwinds on the radar.

“Maybe that is the irony; the market fundamentals are being masked by low valuations and not-too-cheery investor sentiments. Significantly low valuation prices, weakly supported by fundamental justifications are synonymous with a mispriced and undervalued market. Investors will eventually seek to capture the ‘value gap’, and with herd behavior complemented subsequently by fund inflows especially from bargain hunters both foreign and domestic, the market will then gradually expand and boom,” they said. Communications Technology (ICT) investment will increase a country’s GDP by 1 per cent. It also identifies five enablers of digital transformation – Data Centres, Cloud Services, Big Data, Broadband, and the Internet of Things (IoTs). These technologies represent the targets that stakeholders should focus their investments on in order to most efficiently transform their economies for the digital age.”

Developing market leaders are characterised by strong mobile adoption and overall access that is often comparable to developed markets, while typically lagging behind in terms of data centre investment and other core elements of ICT infrastructure. Datacenter investment by developed countries is three times that of developing countries, which is the major catalyst of cloud proliferation, Song said.

Based on the GCI findings, Huawei came up with three commendations for a better connected West Africa, to include increasing data centre investment, developing economies need to moving from investing in supply to building demand and learning from developing countries’ success, to become leaders in GCI.

Nume Ekeghe

An economist and Managing Director of Financial Derivatives company, Limited, Mr. Bismarck Rewane has expressed concerns over recent bonds issued citing it as a problem for the incoming government.

He made the observation at the ICAN Fidelity Bank 2nd public lecture in Lagos during the weekend.

Lecturing on the elections and its impact on the Nigerian economy, he raised concerns that the incoming government would face such as bond issuances.

He said: “Buhari is going to face a situation were bonds have been issued. Typically nobody should issue bond for an outgoing government two years to the end of his regime but six months to the end of this regime, bonds were being issued as if they were cool papers. So you are going to have imminent default on bonds which need to be restructured.”

He added: “Buhari is going to face a big whole in fiscal gap. He is going to face oil prices that have come down and have gone back up slightly to $65 per barrel. He is going to face a banking system that is face facing difficulty because of devaluation of the currency, drop in oil prices has meant that non performing loans would go from an average of 3-5 percent of the book

The Federal Road Safety Commission (FRSC), has set June 1, 2015 as deadline for the introduction of speed limit for motorists in the country starting with commercial vehicle operators.

This is as the Lagos State Government has revealed that the return of commercial motorcyclists to highways in the state has led to 34 per cent increase in road mishaps between January and April this year.

Speaking at the sensitisation campaign for implementation of speed limiting device in Nigeria, the Corps Marshal, FRSC, Mr. Boboye Oyeyemi in his welcome address, said the essence of the road speed limiting device was to ensure safety and security of road users at all times. He noted that excessive speeding on the highways had claimed over 50 per cent of fatalities in the country.

He decried that Nigeria had not complied with the United Nations Decade of Action, which seeks to eradicate fatalities on the to maybe 12 or 15 percent of the book. He is going to face at least half of the states that cannot pay salaries. Contractors whose debts have not been paid.”

Furthermore, he said, “in all, we have a deficit of almost N1 trillion and a possible instrumental deficit of another trillion Naira. We have a budget that has just been approved which has been over short. So I suspect that within 100 days, there would be a supplementary budget.”

He advised the incoming government to urgently look into the currency, adding, “you can grow the economy but if there is no balance between your external and internal economy which is the exchange rate, you are wasting your time.”

“The position we are in now is we were in 2008. But in 2008, we had 60 billion of reserves, 22 billion in excess crude account, we had debt of 10 billion dollars. Our situation is totally different. So we were able to withstand those shocks because our resistance was high”, he stressed.

On what he foresees in the coming months, he said he does not expect any changing in the next MPC meeting.

He added: “On the next MPC meeting, we think that they would do nothing. But within the next month or two, we are going to have an adjustment of the currency. Followed by drop in the interest rate, followed by power, oil and gas reform meaning that some of the transaction we think are closed maybe unclosed.”