-Dollar now N190 at black market
The Nigerian economy is on the path of recovery after the successful conduct of the March 29, 2015 presidential elections, eventually won by General Muhammadu Buhari of the opposition All Progressives Congress (APC).
The fortunes of the Nigerian economy tremendously improved just a day after the election results were realized in favour of the former head of state. For instance, the hitherto battered naira gained much ground on Wednesday, April 1, 2015, with the local currency trading at N205 to $1. The naira appreciated further on Thursday, April 2, with a gain of over N1.
By Friday, it was obvious the forex crisis that saw the naira exchanging at over N230, weeks back, is almost over as exchange stood at a record N190 to $1 at the parallel market.
The market remained stable all through Easter, as financial experts predict it would even be better in the weeks ahead the inauguration of the new Buhari administration.
“The forex crisis was actually caused by several factors, some of which were induced by Nigerians. I don’t want to call names. It was also a matter of perception. For instance, politicians flooded the country with foreign currencies, especially the US dollar. It was this illegal transaction that pushed the dollar up against the naira. And now, the elections are winding up, the runs on the naira is gradually being halted. It also happens that the optimism that greets a new government would also affect the economy in a positive sense. By and large, the future is bright, every other thing being equal”, Miss Gloria Nwagbara, an economist opined in phone interview with ENCOMIUM Weekly on Friday, April 3, 2015.
Also in a positive run is the Nigerian stock market which lost over 4 trillion as a result of the air of uncertainty that prevailed during the campaigning for the 2015 general elections. Interestingly, both foreign and local investors fled the capital market in anticipation of post election violence.
But the peaceful election and its welcome outcome has now given boost to the stock market that maintained a bearish trend these past weeks. The good news is that the market gained over N1 trillion in just two days on a positive run of 17.60 percent weekly rise. The market reacted positively to Buhari’s early lead as the Nigerian Stock Exchange all share index and market capitalization rose by 1.73 percent each.
The next day, as the Independent National Electoral Commission (INEC) started announcing the results of the presidential election from the states, both indicators edged higher by 2.13 percent. Confidence in the market dramatically surged on Wednesday, April 1, following General Buhari’s win. In fact, the market recorded its biggest jump of 8.33 percent all share index and market capitalization in a single day.
In the last trading day (Thursday April 2), it gained additional 3.92 percent to close the bullish week and bring the total appreciation of the market indications to a positive 17.60 percent. And that is N12.135 trillion as against the market capitalization of 10.717 trillion recorded the previous days.
We also found out the stock market was almost crashing before the sudden surge in its fortunes. A review of the capital market as at March 16, 2015, when tension was really high showed that market capitalization was only N9.984 trillion while the all share index was 29,929.56.
This sign posts a recorded leap indeed, as the current share index is well over 34,380.14. Reviewing the performance of the market, so far, analysts said the positive runs would however, be sustained at a moderate level. They reasoned that the euphoria of the positive rise largely from the peaceful elections portends good tiding for not only investors but the economy at large.
Serious concerns were raised over the grave state of the Nigerian economy before the elections, with all key economic indicators on the negative side.
Things now, however appear to be getting better with the stock market recording an unprecedented rise in all fronts even as the wobbling and battered naira now exchanges at N190 to $1.