ECONOMIC EXPECTATIONS FOR 2020

Boniface Chizea writes that the omens are good

There is consensus that the year 2020 will be an improvement on 2019. This projection is based on real and concrete expectations. Elections 2019 have come and gone and in spite of expressed dissatisfactions, we can safely conclude that the risk arising from the potential for crisis from the elections is now well and truly behind us.

The President despite prodding by some malevolent interested parties has repeated it to the hearing of all concerned that his tenure terminates in 2023 and that he is not interested in tenure extension. We can therefore for now expect the president to be concerned; fully focused on the sort of legacy he leaves behind.

The president has repeated the promise to lift out of poverty 100 million Nigerians in 10 years as part of his 2020 message to Nigerians. Therefore, there must be concerted efforts made to boost growth and catalyse development.

Looking closely at the contents of the president’s new year message to Nigerians, there are solid reasons for optimism that the country is poised for giant developmental strides. The president vowed to continue to work with state governments, neighbouring states and international partners to tackle the root causes of violent extremism and the network that helps finance organised terror. The expectations are that as peace is won, the North East Development Commission will be able to work with local and international stakeholders to help create a new beginning for the North East to help unleash its full potential particularly in the farming sector so badly affected by the state of insurrection and anomie which had badly supressed farming activities. The president promised progress on key roads such as the second Niger Bridge, Lagos-Ibadan Expressway, the Abuja-Kano Highway amongst other key infrastructural projects. There is no way some progress will not be recorded leveraging on the existing cordial relationship between the executive and the legislature. Such progress; any progress is bound to have knock - on -effect on the growth projections of the economy.

Budget 2019 was delayed by the 8th National Assembly for seven months as announced by the president resulting in delayed passage and record of poor implementation. In contrast Budget 2020 has been approved and signed into law ready for implementation commencing from the first day of the year even though the president indicated that he might revert for virement purposes and adjustments to budget heads as the need arose.

In fact the president was effusive as he showered praise on the legislature for the feat of the timely and expeditious approval of the 2020 Budget. What that portends is that we expect a much-improved implementation of Budget 2020 which hopefully will result in improved economic growth as the budget for capital projects is implemented and job opportunities provided.

The borrowing plan of about 30 billion dollars which the 8th Assembly did not approve due to alleged incomplete information has now been forwarded to the 9th National Assembly and the Senate President has assured that the request would receive expeditious approval. The expectation is that such a development would improve the revenue profile of the government to fast track the implementation of capital projects particularly relating to the provision of essential but lacking infrastructure to positively impact the attractiveness of the economy to stakeholders from overseas and to give a boost to the prevalent level of productivity in the economy.

It is also worthy of note that for the first time in recent memory that a Finance Bill was sent along with the budget to boost revenue in response to the challenge of fiscal sustainability. As a result of this bill, the rate of Value Added Tax was recently increased from 5 to 7.5%. And assurance has been given that this bill will soon receive the necessary approval. As the content of this bill is implemented we should reasonably expect that the challenge of fiscal sustainability is on the way to being solved.

A framework for the USD 10 billion has been signed for the expansion of Nigeria Liquefied Natural Gas, which is estimated to increase exports by 35% to restore the country’s position as a world leader in the sector and create thousands of jobs. This must be a salutary development as growth prospects of the economy is massively impacted.

The war on corruption is gaining traction with high profile cases being speedily concluded; Orji Uzor Kalu has just received a long jail sentence, Andoka, a former Attorney General and Minister for Justice is currently battling for bail, among others. At the end of the day a strong message is being sent signalling to the commencement of an end to impunity in the land.

The border closure has had positive impact on local productive capacity. The rice mills littered across the length and breadth of this country have cranked up back to life resulting in enhanced productivity and an availability of increased employment opportunities. There is also the reality of considerable savings resulting from retrenchment in fictitious levels of fuel consumption and its associated subsidy as crude smuggling across the border is terminated.

The Central Bank has been quite aggressive and proactive with the churning out of policies as it attempts to complement the fiscal authorities to fast forward growth and development. Banks are now compelled to undertake aggressive lending as the loan to deposit ratio is steadily increased as a prudential requirement with advertised penalties for non-compliance. Also bank charges have been recently reviewed downwards in response to complaints by bank customers thereby assisting in deepening of the financial sector. This is in addition to the salutary development for growth as stability of rate of exchange has been sustained over a long period now.

On welfare note, the president has committed to the payment of living wage to workers and the payment of pensions and this will certainly impact positively the quality of life of concerned citizenry.

We are therefore confident that the country would witness an improvement in growth in GDP and economic development as the unemployment situation is positively impacted leading to a reduction in the misery index in the land. There is no doubt in our mind whatsoever that the prognosis for the economy in 2020 is most certainly brighter.