The record stock market boom in Nigeria is super-amazing: “Last Tuesday (August 29, 20223), the Nigerian Exchange Limited (NGX) witnessed a historic moment as its All-Share Index (ASI) reached a new all-time high of 66,490.34 points, surpassing the previous record of 66,371.20 points that was set on March 5, 2008.
The ASI, which measures the performance of all listed equities on the NGX, rose by 0.51% from 66,151.38 points on Monday, reflecting the bullish sentiment that has dominated the market in recent months.
This remarkable feat was not a fluke or a coincidence, but the result of a series of factors that converged over the last year to create a favourable environment for the capital market.”
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My Response:
It is indeed an irony. In the season Nigerian investors recorded these new heights, most Nigerians are leaving the country: ‘“In the first half of the year [2023], we [the UK] granted approximately 132,000 visas, and those are all sorts of visas, which include visit, work and study visas.”‘…to Nigerians. How do you reconcile a season of stock market boom with one where young people seem hopeless? As we discussed during the Investment Course, banks will break all known “profit” records due to the Naira float as they book what they “bought” at N415 to N750 per USD.
Wow – Nigerians are really going to the United Kingdom: “In the first half of the year, we granted approximately 132,000 visas, and those are all sorts of visas, which include visit, work and study visas. “In the previous full year before that, we issued about 324,000. The UK, in that year, issued about three million visas, and of those three million visas, 324,000 were issued to Nigerians, which is about 10 per cent.”
And that is what is happening. Most of the profits are on currency/FX with minimal growth in lending to manufacturers and other critical players in the economy. Nigeria has always been like this: somehow people will continue to make tons of money even as many struggle. Electricity generating companies are declaring HUGE profits when DISCOS (distributing companies) are going bankrupt or being bought out (Abuja, KD, etc).
How is that possible? You can generate 10 units of energy and be paid for it even if DISCOs can only absorb 3 units to distribute to customers. So, you see record profits for GENCOs in cities with no electricity. Legendary!
Indeed, we have a lot of work ahead in the nation and part of it will involve creating an economy which works for ALL. The investment dividends will start coming for many of us, and that will also be a reminder that in this season of boom for a very few, many citizens are under stress. This is not being against the rich, rather, it is a call for an economic system that is fair for all, anchored on shared prosperity for the rise of all.
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I think you captured this well especially your last sentence. We need to build a system that is fair to all and can support the rise of all. And then leave it to the individuals to determine their paths.
Do this and Nigeria would flourish beyond borders.
This brings be to the attached image. Nigeria is projected to be the 5th largest economy by 2075 at about USD 13 trillion.
Now, the fact that we made it that up the list means that some folks trust that we have what it takes to get there.. There are many things wrong with this projection but I won’t go into that here.
Just wanted to share that if we are to even get close to that, a lot of work is needed. Population growth alone wont cut it.
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We haven’t built any economy, the system is broken, so depending on the side of the divide you find yourself: you can make plenty money for doing the minimum or nothing, or you can do all the hardwork and still finish empty-handed. Just via illegal access to cheap dollars and round-tripping alone, people became billionaires here. We embody wealth without enterprise a lot here.
To build actual economy is harder, the virtues and intellectual rigours required are not what you see in abundance here, so the divide between the rich and the poor keeps widening.
We have so much work to do but where do we start from? We reward bad behaviour a lot here, yet we claim that we want a better and progressive country, it is not possible.
If we start demanding that each person must do his/her job well and reward people based on their work ethic and productivity, we will stand a chance of building an economy that works for all. It is not by sharing palliative or doing activism for the disadvantaged.
We were not properly formed to exist as responsible and caring humans, so reconstruction of the minds can as well become a national project.