WHY IS NIGERIA IN A RECESSION? Akeem OyewaleGMP Convention December 2016

NIGERIA IN 2016 A country that’s 56 years old Democratic country Largest economy in Africa by GDP Population: 170m approx. Youthful segment: 50% Rich in natural resources, with oil & gas major forex earners Clement climate and weather, not on an earthquake prone plane A country that can move a fast speed when properly revved up.

REFORM DRIVEN ECONOMY – BENEFITS OF GEJ ADMINISTRATION Power sector reforms - Privatisation of PHCN leading to private ownership of generation and distribution companies;

- Introduction of appropriate pricing regime; - Contracting out the management of the Transmission Company of Nigeria (TCN); - National Gas master plan is being implemented, in order to enhance fuel-to-power capabilities.

Agricultural sector reforms - Set up the Nigeria Incentive-based Risk-Sharing System for Agricultural Lending (NIRSAL);

- Incentivizing critical actors in the fertilizer value chain to improve productivity; - Setting up staple crops processing zones. Dangote’s Kano State tomato paste factory is evidence of fruits of this initiative.

REFORM DRIVEN ECONOMY – BENEFITS OF GEJ ADMINISTRATION

Oil and gas sector reforms - National oil and gas policy adopted in 2007; - Introduction in Local Content Act resulting in divestment of IOCs from onshore asset

operations to more technologically intense offshore assets; - Petroleum Industry Bill yet to be passed. This will result in a revision on how royalties are

paid on exploited oil. - Private oil refinery under construction Banking sector reforms - Banking sector intervention; - AMCON setup to clean up sector assets; - National financial inclusion strategy; - Cashlite initiatives; - Migration to Basel II/II. More stringent capital requirements

IS NIGERIA IN A RECESSION?

A recession is one of the following:I. Two consecutive quarters of negative growthII. When real GDP growth is less than potential GDP growthIII. A contraction in output, investment and rising unemployment

Surat Al Furqan v 58

S

Source: FDC, Bismark Rewane

FINANCIAL INVESTMENT ADVISOR Who is a Financial Investment Advisor?

They help investors make sound investments. They analyze a client's finances and make investment suggestions to help the client create a sound financial plan.Basically they are financial analysts.Examples are financial analysts in the banks, in the research companies, advisory companies etc.

FACTORS RESPONSIBLE FOR NIGERIA’S SLIDE INTO RECESSION

1. Fall in global commodity prices, especially crude oil2. Limited foreign exchange earning abilities/inflow3. Weak flow of global capital4. Revenue leakages (the popular whistle blower)5. Inefficient systems/institutions6. Militants’ attack on oil installations7. Fighting Boko Haram war8. Subsidies, that we could not afford9. Lack of efficient diversification of revenue generative abilities

SYMPTOMS OF RECESSION

1. Currency devaluation2. Unavailability of foreign exchange3. Inflation, that could turn to stagflation4. Depleted foreign reserves5. Challenges with sub-national governments’ finances6. Unemployment rising7. Manufacturing concerns folding up8. Opportunities for the discerning and the bold

WAYS OUT OF THE RECESSION

1. Government economic policies should be expansionary2. Institution-building should be encouraged3. Foreign investor-friendly policies should be implemented4. Market-driven exchange rate should be encouraged5. Export-driven investments/productions should be in place6. We should produce what we need/eat and eat what we produce7. Return of focus to agriculture and agric processing a sine qua non8. Friendly finance sources for investors9. We should be innovative10. Let’s strive to work towards a society we want to see.

WORDS ON MARBLE

“You should be Value makers and not stock brokers.” You should be a visionary. FinTech disruptions are real Opportunities abound: think and grab same! Remember there would be a time when adverts for jobs would say “Humans need not apply”.

In fact, its happening now: fintech disruptions, mobile brokerage, Jumia, e-voting etc

What are you doing?

Mr Abubakar GTI CEO

HUMANS NEED NOT APPLY: ARE YOU READY?

QUESTIONS?