OMG! See how much money Buhari's delayed in naming ministers has cost investors!

OMG! See how much money Buhari’s delay in naming ministers has cost investors!

Buhari’s delayed in naming ministers– The delay by President Muhammadu Buhari in naming his cabinet members and other officials couple with no clear economic policy direction yet has been attributed to the lose recorded in the capital market.

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This delay according to The PUNCH has discouraged investors especially the foreigners from investing in the capital market until there is clear policy direction for the economy.

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Data released on 18 June,2015 by Nigerian Stock Exchange shown that market lose N238bn or 2.07 per cent just three weeks to the inauguration of President Muhammadu Buhari.

Capital market analysts believed that the dip in the market could be linked to the failure of Buhari to name his ministers since becoming president especially this economic team. This uncertainty in the economy policy direction of the government has made foreign investors to cut down on investments.

A financial expert at WSTC Financial Services Limited, Mr. Olutola Oni, said that at first hope of investors were risen after a peaceful election. But weeks after the inauguration of the new president and cabinet not constituted has affected the investment community.

Oni said, “When the elections were conducted peacefully and the transition was peaceful, people expected that the incoming government would consolidate on that, roll out the list of those that would form the new government and make one or two policy statements.

“But up till now, apart from the fact that the government moved the military command centre to Borno State, no other policy statement has been made, not even as regards the issue of the fuel crisis. Everything has been virtually the same; just like nothing happened on the political scene.”

He noted that investors are concerned about the economic team Buhari will put up and its ability to handle the twins issues of insecurity and corruption which are key parameters for investment to flourish. .

“The quality of people that are going to come on board will go a long way to determine what the outcome will be in the short to medium-term generally; it is going to determine whether the government is serious about tackling corruption or whether it is going to merely scratch it on the surface.”

Also on the current investors apathy, the Head, Research and Investment Advisory, Sterling Capital, Mr. Sewa Wusu, noted that investors are currently withholding investment to see how things unfold as their initial expectation was that the government would roll out it programme on assumption of office.

Wusu said, “You don’t make investment in a vacuum. You look at certain parameters; the political environment, the economic environment and some other factors.

“Most investors are on the sidelines now as far as investment is concerned; whether in equities or fixed income, because they are waiting for a policy direction from the government before they can make well-informed investment decisions.”

The Nigeria’s capital market is dominated by foreign investors which had withdraw about N1tn in 2014 and another N234.84bn between January and April 30 this year.

Experts believed that for the market to make full recovery, foreign investors will have to return to the market. Available statistic shown that foreign investors investments in the market have declined by 11.25 per cent while local investors investments have make an appreciable increase of 37 per cent.

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