By Kingsley Ahanonu
The year 2019 from economic indications has been projected to be one of great downturn. Many factors have been adduced for this.
The global fulfilment of this disheartening forecast, given view by the trade wars between the two major world economic determinants-China and the USA is a strong factor. US- the largest economy and China- the second beat and fastest growing economy are already gripped. Nigeria, as part of the world forum, must in one way or the other be affected by this reality that affects its globe.
Another key factor that gives this dolorous view is the stuttering price of crude oil. Nigeria is a country whose economy is preponderantly hinged on crude oil-its major export. With a budgetary benchmark of $60 per barrel even when the international price is toggling below $54 pb with fears of more fall, it begs to question how we can implement our 2019 budget.
The fears worsen with the glimpse of how tougher economic measures are to be taken in the USA with the increase in the lending rate by the Federal Reserve Bank. We’re in for the hit economically as a country because this suggests something bothering for a year whose large chunk of revenue is borrowing.
Indeed, with the translated slug in revenue and the consequent low money velocity, we are in for a year of financial uncertainty. The increased inflation, the attendant hike in cost of living and the counter-inflationary measures say so.
It’s no news that we’re in for a major election this year. Politically, the environment is rife as competitions both in money exhibition and might expression take centre stage. Should we raise concern over the dollarisation of the Nigerian economy as a result of this? Of course it will be an expressed worry.
The controversial presentation of the 2019 budget, aside from the dogged hullabaloo over it is going to impact on the year’s financial spending due largely to its late presentation. Presenting an appropriation bill just in December, one wonders how long both chambers would deliberate on it committee-by-committee stages, and much more considering the divided attention which the heated electioneering would cause.
The implication is that in a case similar to the exit of 2015 and the entry of 2016, a robust competition between the naira and the dollar, where the later won with its consequent triggering of the GDP to recession, is likely bound to repeat. Increased in exchange rate with a terrific slump to recession will consequently impact on our cost of living.
By and large, disconcerting as the year’s projection might be, we will have to brace up for the challenges. No hope should be lost, for out of the challenges emerge the champions.
Thus, for us 2019 should be a year of discovery and innovation. Just like in 2008, where amidst the global economic downturn, Nigeria went through unscathed (of course, due to robust policies) we could in twist of repeat surmount.
But get this reality; howbeit the turn of event, even if we don’t eventually get through the nose as a nation- as a consequence of bad policies, you, I can win as individuals by taking careful productive financial decisions that gives premium on savings cum investment that wasteful spending.
Kingsley Ahanonu, a blogger and public analyst, writes from Owerri. Ahanonu tweets at @kings_emz.