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Author: Fawaz Ayobami

Why Has the Subsidy Removal Policy Failed?

By Fawaz AyobamiPosted on Posted in EconomyTagged , , , , , No Comments on Why Has the Subsidy Removal Policy Failed?

At the moment, there seems to be a consensus among intellectuals and institutional bodies like the IMF and the World Bank on the potential positive impact of the removal of subsidy on the economy. Their arguments are pretty broad and far-reaching. They submit that subsidy payment continues to widen the inequality gap in the country since petroleum subsidy is an implicit subsidy (financing consumption), and the wealthy who consume more than the poor citizens whom the government seeks to protect from the high fuel price also benefit from the regulated price. At the same time, their taxes have not increased commensurately.

Nigeria: A Frail Giant?

By Fawaz AyobamiPosted on Posted in EconomyTagged , , , , , , , , , , No Comments on Nigeria: A Frail Giant?

Since President Muhammadu Buhari’s re-election in 2019, the country has faced a myriad of social and economic challenges. Inflation had surged from 11.40% in May 2019 to 17.33% last month; the Naira has been devalued three times, losing 33% of its value, insecurity has increased, and the general investment climate has waned. All these have happened while Nigerians have not seen any meaningful increase in their economic welfare: the country slumped into a second recession in five years. Many states have found it challenging to implement the new minimum wage signed into law in 2019. We also note that even if all the states had implemented the new minimum wage, the total number of civil servants to the entire labour force is considerably low. To sum it, you would still be worse off if you hold 2X the same Naira note you had in 2010 today.

Nigeria’s Cement Industry in 2020: The Boom Amidst the Burst

By Fawaz AyobamiPosted on Posted in Business & FinanceTagged , , , , , , No Comments on Nigeria’s Cement Industry in 2020: The Boom Amidst the Burst

Dangote cement plc reported a 23% Return on Invested Capital (ROIC), which overshot its nearest competitor (BUA) by 600bps. Lafarge came in a distant third with an ROIC of 6%. We, however, note the gradual increase in Lafarge’s performance over the last five years as it continues to grow its ROIC from the 1% it reported in 2016. We believe this continued uptrend in its performance is hinged on the selloff of its South Africa operations, a strategic action that has continued to impact performance favourably.

How to Analyze the Financial Statement of Banks

By Fawaz AyobamiPosted on Posted in Business & FinanceTagged , , , , , , 1 Comment on How to Analyze the Financial Statement of Banks

Like any other companies, financial institutions prepare financial statements for regulatory purpose and assist their users in making economic decisions. However, banks’ business models are different from other companies. Thus they attract a unique regulatory focus.

The Unholy Union Between the Naira and Devaluation

By Fawaz AyobamiPosted on Posted in EconomyTagged , , , , , , , , 4 Comments on The Unholy Union Between the Naira and Devaluation

In 2020, the Naira lost 25% and 27% of its value at the NAFEX and parallel exchanges, respectively. This quickly disrupted my plans, as I had planned to upskill and purchase some courses priced in dollars at the onset of the year. My disappointment prompted me to visit the CBN’s website in search of its policy stance per the Naira. The website says the apex bank’s exchange rate policy is managed floating – a market-friendly term adopted by developing countries who operate some form of pegged regime. I murmured, why did the Naira not appreciate, and why is it always under severe downward pressure?

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