The Nigerian economy Shows Positive Transformation
The News (Lagos)
January 10, 2000
By Semiu Salami
Lagos - Industries in Nigeria are yet to rev at full
capacity and the living
standards of the people yet to be on the upscale. But
there seems to be a
common agreement that in a gradual and systemic
manner, the pains which
hitherto were a pastime of many Nigerians are
receding.
Subjecting the performance of the economy to a
painstaking appraisal in the
new year is always an arduous task, given the absence
of official statistics
from the Federal Ministry of Finance, Federal office
of Statistics, the
Central Bank of Nigeria (CBN) or the representatives
of the organised
private sector (OPS), that is, the Manufacturers
Association of Nigeria
(MAN). But a sectoral analysis conducted by The News
Business revealed a
plethora of happenings that provide a good basis for
understanding the
economic twists in the country.
From all available statistics, the banking sector,
perhaps, for the first
time, upstaged the informal sector in terms of overall
performance. In fact,
1999 marked a turning point for the Nigerian banks
which exchanged a
whopping N907 billion on the floor of the Lagos
clearing house of the
Central Bank of Nigeria.
Although government's attempt at salvaging the naira
during the year
collapsed due, primarily to capital flight and round
tripping of foreign
exchange by some wealthy Nigerians, the banking
environment witnessed a
flurry of activities with the licensing of new banks.
The year also saw a good number of merchant banks
dropping their investment
banking license for the retail banking culture.
Incidentally, this came on
the heels of the transfer of parastatal funds from the
CBN to commercial
banks at a time when the full autonomy of the CBN was
restored under a new
crop of leadership headed by Dr. Joseph Sanusi, a
former managing director
of First Bank. Nineteen ninety-nine also saw the
introduction, by some
ECOWAS countries of the West African Unit of Account
(WAUA), ECOWAS
Travellers Cheque as well as the introduction of the
one hundred naira notes
in Nigeria.
Like the banking sector, the capital market also
witnessed a robust
performance that started with the introduction in
April of the Automated
Trading System (ATS) which subsequently boosted
trading activities. Although
the Nigerian Stock Exchange would have to expand the
ATS coverage area
beyond the Lagos and Abuja floors, the scheme has
nonetheless impacted
positively on stock pricing, transparency as well as
the growing trend the
market witnessed in capitalisation.
The market analysis of the ATS in 1999 reveals that
shares worth N8 billion
were traded in the third quarter alone compared with
N13.6 billion traded in
the whole of 1998.
In fact, the NSE market capitalisation, as at 30
December 1999 rose by
140.92 per cent to N634.35 billion in contrast to
N263.30 billion mark in
1998. The exchange's all share index dipped to
5,240.10 points at the close
of business in December as against the 1998 figure of
5,627.76 due largely
to losses suffered by most of the quoted companies.
Significantly too, apart from supplementary listing of
equities which was
rampant last year, eight other new equities,
especially in the finance
sector also added to the glamour of 1999. The new
entrants included
Manufacturers Bank PLC, Liberty Merchant Bank PLC,
Chartered Bank PLC and
Universal Trust Bank PLC.
The NAL Merchant Bank - backed Nigerian Energy Sector
Fund, Security
Assurance, Confidence Insurance and the cross border
listing of M-Net and
Super Sport of South Africa, which incidentally became
the first foreign
company to benefit from NSE's global focus, were a
part of the high points
of the year. It would be recalled that the coming of
Ashanti Gold Field in
1998 was frustrated by the policy inconsistencies of
the regime of the late
Sani Abacha. The previous year also witnessed the
repositioning of the
market regulatory body, the Security and Exchange
Commission (SEC) through
decree 45 of 1999.
For the aviation sector, the year was a mixed grill as
it reeled from one
controversy to another.
The controversial joint venture pact between Nigeria
Airways and Virgin
Atlantic almost eclipsed the entire industry The
situation persisted until
The Presidency under President Olusegun Obasanjo took
some decisive steps to
pull back the industry. Part of the measures included
the creation of two
new structures, the National Civil Aviation Authority
NCAA and the National
Airspace Management Authority (NAMA), in addition to
the already existing
Federal Airports Authority of Nigeria, FAAN. Under the
new deal, the NCAA is
to regulate the activities of airline operators by
ensuring that only air
worthy aircraft are operated with required qualified
personnel. NAMA, on its
part, is to manage the country's airspace and ensure
that it is not
violated, especially by foreigners.
The year 1999 also saw government taking bold steps
towards putting the
national carrier back on the path of glory when it
commenced the process of
its full privatisation with the appointment of
International Finance
Corporation (IFC) an arm of the World Bank, to oversee
the programme. Also
last year, the government agreed in principle to the
liberalisation of the
nation's Bilateral Air Service Agreement (BASA) which
would enable capable
private domestic airlines to operate on the
international route.
Interestingly, this is one of the sore points which,
in the past, pitched
private airline operators against the regulatory
authorities.
=====
21st Century African Youth Movement
International Coordinating Secretariat
P.O.Box 8582
Madison, WI 53708-8582
E-mail: [log in to unmask]
"Not everything that can be counted counts, and not everything that counts can be counted." -- Einstein
__________________________________________________
Do You Yahoo!?
Talk to your friends online with Yahoo! Messenger.
http://im.yahoo.com
----------------------------------------------------------------------------
To unsubscribe/subscribe or view archives of postings, visit:
http://maelstrom.stjohns.edu/archives/aam.html
AAM Website: http://www.danenet.wicip.org/aam
----------------------------------------------------------------------------
|
