Politics won’t kill us this year, but we can look forward to more drama

Don’t bet on anything good to come from politics this year. It will, as usual, be the biggest bad news in all ramifications. At least, I don’t see politicians shaken out from their sense of entitlement yet, not this year, or make those speeches that will illuminate issues that have challenged the existence of the country including ethnic tensions. And so, I doubt there will be reasons to hope that we will see any pragmatic doctrine from the politicians based on the interest of the public or people who elected them to serve.

But we can look forward to more drama in the course of the year from unexpected ‘galaxies’. At least we gaped at the slide of crude oil prices from glory all through 2014, hopeless at the challenges it threw at the country’s economic managers. Nobody expected the price to still be digging its grave up until now and nobody ever bet at the beginning of the year that country’s revenues will be stupid enough to make the finance minister, Ngozi Okonjo-Iweala talk up the austerity measures idea.

‘Crude oil price’. So great a warrior. Again, I expect it to continue on its mission to push critical issues back on the table all through 2015. We saw how it put fire in the belly of the Central Bank Governor, Godwin Emefiele, who responded with a masterstroke devaluation of the currency (Naira), a spike on rates by 1 percentage point to 13 percent, a position it had lazed all through the year that most analysts and economist in the country thought was the best thing to ever happen to interest rates.

Interest rate will be raised again by the second quarter of this year and with a higher degree of conviction that higher rates are indeed better and more bullish. You may scoff at this suggestion but all the ingredients are there to make it happen.

Sure they are. Nothing happens when Interest rates stay dormant. Nothing. If interest rates stay dormant the markets are uninterested, sentiments don’t shift. So the markets will be hungry for a little bit more of action from the Central Bank on interest rates. At least, I don’t think the stocks paid any attention to inflation, the major reason the rates was jailed for a year. This will be a topic for another day though.
Last week I dwelt on the need for government to take the opportunity the crashing oil price presented to quite the oil business. This year I should think they will be needing no reminder of how silly it will be to continue to pay and publish all that absurd figure on subsidy.

Interestingly, the Federal government realize the axe has to fall on recurrent spending but the zeal is not in making it happen. That is probably the only casualty the oil price will struggle to unravel this year.

Will all of these issues influence businesses? Yes, to some extent. But businesses are used to bad years. The innovative ones have thrived in the face of adversity in the past and so they will survive this year.

But it will take some great magic to get manufacturing sector breathing properly again. Two major things will continue to challenge their performance-volatility of the exchange rate and the country’s porous borders that has allowed greater influx of untaxed and uncensored goods.

The bankers will not as always be their best friend. These guys will continue to live under the illusion that what they do is banking. They are a bunch of smart crooks, interested only in what they can steal from you through hidden charges and interest rates so absurd even on consumer loans. And they will continue this year to round trip in the forex market with their savvy treasures leading the charge. So don’t expect them to extend any survival loan to businesses this year or increase their loan portfolio by any significant margin.

Over all, 2014 is much of guide to what to expect this year.

May you all see bluer skies and calmer seas in 2015. Happy New Year.