since President Buhari took office, the Nigerian stock market has witnessed unprecedented losses amounting to over N1.032 trillion. The market capitalization has declined from N11.659 when Buhari came to office to N10.627 currently as at the end of trading on Thursday July 30th. The Nigerian stock markets are closed on Friday and Monday for celebration of Muslim Eid Holidays. The Index has lost 7.2 percent of its value in this quarter, thus becoming the worst perfoming stock market in the world outside of Chinese Stock Market according to the 93 Global stock market rankings tabulated by Bloomberg
Many stock market analysts both local and international all agree that among many factors that contribute to the meltdown in the Nigerian Stock Market includes the lack of policy direction of the current Administration of President Mohammad Buhari. During the presidential campaign, Buhari failed to articulate his economic development policies and since his administration took office in May 29th such issue still remains largely unaddressed.
While Nigerians clamored for change, it may very well be that the change could mean jumping from frying pan into fire. Other problems leading to the meltdown in the Nigerian Stock market may include the in-fighting going on in the leadership of the Nigerian House and Senate. There is also the decline in revenues from the crude oil market which has fallen to about half of past levels. Crude oil sales accounts for nearly 80% of Nigerian government revenues.
The major actors in the Nigerian stock Market are foreign investors. Many have either left or are staying on the sidelines currently waiting to see the direction the current administration is going. Many foreign investors have changed their perceptions about investing in the Nigerian markets which they now see as risky partly due to lack of direction of current administration.
The Acting President of Chartered Institute of Stockbrokers, CIS, Mr. Oluwaseyi Abe told Financial Vanguard that “Currently, the slow governance, non appointment of ministers, lack of policy direction by the Federal Government have all contributed to affect the performance of the market . It is our hope that once the economy starts running the market will improve and begin to attract investors.”
President Buhari through his actions or lack of it, is not helping matters either through his go-slow approach. After 2 months of coming to office, most of his cabinet positions still remain unfilled. Some speculate that it may take him up to September to appoint his ministers by then the damage to the Nigerian economy would spell disaster for the welfare of the country. Many now see Buhari’s campaign promise of attaining a one naira to one dollar exchange rate as perhaps one of the biggest jokes of this decade. One dollar currently is equal to about two hundred naira.