Poor management in last 8 years cause of Nigeria’s woes — Agusto

Business a.m

Rating agency Agusto & Co. has issued a stinging rebuke of the management of Nigeria’s economy over the past eight years, citing poor management as the root cause of many of the country’s economic woes.

In its monthly newsletter for January titled, “2024: A year of reckoning, turning points and balancing acts”, Agusto & Co. made a number of predictions about the Nigerian economy for the year ahead.

The rating agency stressed the importance of a coordinated and coherent policy response to the economic challenges facing the country. 

In its analysis, Agusto noted that previous administrations had failed to properly manage the economy and tackle issues such as inflation, poverty, unemployment, and infrastructure deficits. It suggested that the current government must learn from past mistakes and implement a more coherent strategy to address these issues.

“This alludes to the need for a coordinated monetary and fiscal policy response, and we believe that a strategic balance between economic policies and external factors will determine the trajectory of the Nigerian economy in 2024.

“The good news is that the Nigerian economy is unlikely to be as poorly managed in the next four years as it was in the previous eight,” it stated.

Agusto & Co. noted that disruptions to agriculture, including insecurity in the Middle Belt and North West regions, as well as tensions in the Niger Republic, would have a severe impact on crop production this year.

On its part, the Central Bank of Nigeria (CBN) has made it clear that it will no longer provide intervention finance programmes, including the Anchor Borrowers’ Programme, citing a lack of expertise and core focus.

Yemi Cardoso, the CBN governor, has also offered a variety of justifications for the decision to end intervention finance programmes, stressing  that the CBN’s core mandate is to maintain price stability and facilitate economic growth, and that it is not equipped to administer intervention finance programmes. 

Augusto & Co. predicts that the exchange rate of the Nigerian naira to the US dollar will converge at N1100/$ on the official market by the end of 2024. The prediction is based on the assumption that the CBN will continue to tighten monetary policy and focus on its core responsibilities, while the government works to reduce fiscal imbalances and improve economic efficiency.

The rating agency also projected that the CBN will raise the Monetary Policy Rate (MPR) to around 19 percent, given the need to address high inflation, reduce liquidity in the financial system, and raise interest rates to a level where long-term savers can earn positive returns.