A multinational banking and financial services company, HSBC, has said a second term for President Muhammadu Buhari would stunt the economic development of the country.
In a report, put together by its Global Research Unit, entitled, “Nigeria, Papering over the Cracks,” HSBC said Nigeria’s current economic struggles look set to continue if Buhari wins a second term in office.
According to the financial institution, the president’s “approval ratings sit near all time low,” a development, it said, “largely reflects the impact of Nigeria’s painful recession in 2016-17 and the sustained economic hardship that has accompanied his presidency, including rapidly rising joblessness, and poverty.
“A second term for Mr. Buhari raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”
The multinational banking group, which is Europe’s largest by total assets, noted that while higher oil prices have brightened Nigeria’s macro outlook, boosting export earnings, improving the supply of foreign exchange, and supporting naira stability, the Buhari administration was yet to address the economy’s structural shortcomings.
It said, “Economic growth remains sluggish and reliant on the rebound in oil output while the non-oil economy, which accounts for about 90 per cent of GDP, continues to languish with many service sectors still mired in contraction.
“Joblessness continues to rise, up almost three-fold in three years to 19 per cent in Q3 2017, pushing the number in poverty to 87 million. “Meanwhile, current account improvements may have pivoted on higher oil prices, but they also derive from on-going import restrictions and limited FX access for many sectors of the economy.”
Buhari is set to once again lead the All Progressives Congress (APC), having received his Nomination Form on Tuesday.
Meanwhile, the Federal government has disclosed that it is currently seeking a loan of about $6billion from the China Exim Bank for the construction of the Ibadan-Kano rail line.
The Minister of Transportation, Mr. Rotimi Amaechi, disclosed this at an interactive session with journalists in Abuja on Tuesday.
The minister also stated that $195million had been approved to secure the waterways and expressed hope that it would help reduce crime in the maritime sector.
He said: “We are currently in negotiations with the China Exim Bank to get about $6billion to do (rail lines) from Ibadan to Kano. It is a difficult decision.
“Why is it difficult? The money required is about $8billion to do a double track but the Chinese are insisting that they can’t fund the double track.
“They are asking us to do a single track and they want it at Minna so that instead of going from Minna to Kaduna, we should go from Minna to Abuja and then join it from Abuja to Kaduna.”
He added: “But there are those who argue that we should not accept that, rather we should tell them (Chinese) to fund it in segments. This, however, does not make economic sense.”
On the security of the waterways, Amaechi said, “The Federal government has approved the sum of $195million…to hire an Israeli company to help train our security personnel to help man our water ways.
“Currently there are criminal activities in our waterways which has made it that in some parts of the country, people charge what they call war insurance. War insurance means that you go to an area where there is (seems to be) war, but you know that there is no war there.
“But in such areas criminal activities are taking place in the water ways. So with the approval, after we’ve put the processes in place, we will ensure that there is security on our waters.”