Law & Policy

Jonathan Exit Seen as Spark Needed to Ignite Nigeria Markets

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President Goodluck Jonathan“President Goodluck Jonathan left the floor of the Nigerian Stock Exchange after a visit two weeks ago to traders singing “For He’s a Jolly Good Fellow”. Some investors would prefer that he keeps walking.
Since rising to a five-year high in July, Nigeria’s benchmark stock index has plummeted 30 percent and is now only 11 percent higher than when Jonathan took office in May 2010. Stocks in South Africa and Kenya rallied 90 percent in the period, while those in Zambia and Ghana more than doubled. The naira fell to a record in February, and domestic government bond yields of almost 16 percent are the highest among 31 emerging markets monitored by Bloomberg indexes.

“It’s been horrible,” Ayodele Salami, who oversees $200 million of Nigerian assets as chief investment officer of Duet Asset Management, said by phone from London on Feb. 23. “Foreigners have been getting out of equities and fixed income. Bond yields in Nigeria are now astronomically high.”
Jonathan’s failure to wean Nigeria off its reliance on oil, and save surplus revenue when crude prices were trading at record highs, is coming back to haunt his campaign for a second term in office. A plunge in crude of almost 50 percent since June risks slowing economic growth in 2015 to half the pace set over the past 15 years. A win for his opponent, Muhammadu Buhari of the All Progressives Congress, may tempt foreign investors back to Africa’s biggest economy and spur a rally in Nigerian assets, according to Holger Siebrecht at Boston-based Acadian Asset Management.

Election Delay
The election was delayed by six weeks after security forces said they needed more time to defeat an insurgency by Islamist militant group Boko Haram, which killed 4,700 people last year, according to U.K.-based risk consultancy Verisk Maplecroft. With lower oil prices slashing export revenues, the International Monetary Fund forecasts growth of 4.8 percent this year, about half the average of the past 15 years…”

Bloomberg Business has the full story.


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Africa Music Law™

AFRICA MUSIC LAW™ (AML) is a pioneering music business and entertainment law blog and podcast show by Fashion and Entertainment Lawyer Ms. Uduak Oduok empowering the African artist and Africa's rapidly evolving entertainment industry through brilliant music business and entertainment law commentary and analysis, industry news, and exclusive interviews.

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