By Nik Ogbulie
The recent indication of a rebound in Nigeria’s economic rating by a global rating company, Moody’s , has been seen as an improvement in the efforts of the new administration, but has been described as largely insufficient to constitute any significant change in the state of the National economy.
Indications are rife that commodity prices have been escalating with very sharp margins pointing to a possibility of a very harsh rise within year end. Development watchers believe this will truncate the drive to reduce an attempt for more people to plunge into the yawning poverty gap.
Money market operators are of the opinion that the failing rating of the Naira which has forced imports for forex consideration to be pegged at N950/dollar has automatically made it clear that cost of imported items will be more and this will not abate as dollar supply in the new year will be highly reduced.
There are strong indications that major areas of productivity have consistently been moving south due to the high cost of forex, leaving services to continue to thrive against manufacturing, oil and gas, information technology and agriculture, prompting some major manufacturers of Fast Moving Commodities to leave.
It has been identified that the initial projection for the GDP growth may no more be realisable based on the obvious slowdown in the real sector of the economy even as there have been remarkable stability in oil price and improvement in the oil quota conundrum.
Transportation costs at various points have been on the rise with air fairs reaching for a double against the rate few weeks ago while road transportation has become almost out of reach, while water transportation is almost unavailable.
It is obvious that the inflation rate will meet the 30% billing as earlier projected while banking rates will continue to rise based on the increasing costs of tariff on the few existing infrastructure.
Economic analysts are of the opinion that Moody’s rating may have taken into consideration the fallout of President Tinubu’s investment drive tours and the accompanying hypes that greeted the various promises from perceived investors, most of which are still a matter of the drawing board. It is believed that those investment promises and ongoing interventions are considered as long term projection and would not added to any growth multiplier.
However. the Federal Government has been urged to escalate domestic investments and the improvement of the various existing channels while expecting more from foreign investors. For instance, it is obvious that no national refinery would go into production this year against the President’s promise and most of the agricultural fields north of the country has gone into full production.
It will take Nigerians some few months to know the state of the economy when the new budget becomes implementable.
However, the fact that about 82% of the country’s revenue will be channelled into debt services explains that things, especially prices, will continue to rise. It is understate that a N9.5 trillion budget deficit portends a heavy danger to the economy.
