President Muhammadu Buhari delay in appointing ministers and other key officials as well as the lack of apparent information about his government’s policy direction have been major deterrents to investment in the nation’s capital market.
Capital market analysts disclosed recently that the current performance of the market revealed that investors, in particular foreigners, were unlikely to make noteworthy investment in the market, if any at all until, they had a clear picture of the policy direction of the government.
As of June 18th 2015, three weeks after the inauguration of the President on May 29, the value of equities listed on the Nigerian Stock Exchange had declined by N238bn or 2.04%, while the NSE All-Share Index drop by 2.47% or 849.87 basis points.
In 14 trading sessions post-inauguration, the stock market closed on a positive note on only five occasions and with marginal gains.
This, according to analysts, is as a result of the delay in the formation of the cabinet and lack of essential information about what the economy direction is going to look like, leaving investors vague about what policies the government will implement.
Financial analyst at WSTC Financial Services Limited, Mr. Olutola Oni disclosed that the delay in forming the cabinet had affected the performance of the market when asked.
He explained that the investment climate had been to a large extent dampened by the fact that the keenness by which people looked forward to the coming of the new government was buried by what they had seen the government do since it was inaugurated.
Oni said, apart from the fact that the government moved the military command centre to Borno State, no other policy statement has been made, not even as regards the issue of the fuel crisis. Everything has been practically the same; just like nothing happened on the political scene.
He further stated that “The quality of people that are going to come on board will go a long way to determine what the outcome will be in the short to medium-term generally; it is going to determine whether the government is serious about tackling corruption or whether it is going to merely scratch it on the surface,”.