My Blog

Category: Economy

  • FG Proposes N26.01trn For 2024 Fiscal Year

    FG Proposes N26.01trn For 2024 Fiscal Year

    The Federal Government has proposed the sum of N26.01 trillion for the 2024 appropriation based on oil price benchmark of $73.96 and 21 per cent interest rate.

    Minister of Budget and Economic Planning, Atiku Bagudu, disclosed this to State House Correspondents at the end of the Federal Executive Council (FEC) meeting on Monday in Abuja.

    He said that the budget would be presented to the National assembly before the end of the year since President Bola Tinubu was already engaging with the legislative arm towards getting their buy-in.

    He said that the budget was expected to consolidate on the various economic reforms initiated by the present administration aimed at improving the standard of living of Nigerians and attracting investors.

    Bagudu said that assumption of the budget was based on the various diplomatic engagements by the president and other government functionaries that were expected to improve inflow and boost exchange rate.

    Mr Dave Umahi, Minister of Works, also disclosed FEC approved the use of concrete for road projects across the country including those of new ones, depending on the level of completion.

    He said, ‘’FEC was also informed on the on-going projects and to mitigate so much inflation and variation of the projects, to have some of the projects that have attended completion to be redesigned on concrete and going forward for new projects to be done on concrete.

    ‘’FEC approved that concept that most of the on-going projects should be designed on concrete pavements depending on the level of completion and if you’re doing Asphalt there are also conditions for that.

    ‘’FEC also approved the coastal road running from Phase 1 which runs from Lagos to Port Harcourt to Calabar. Phase 2 runs from S4 tearing off from this stretch to Sokoto and to Ogoja.

    “It was approved to be done on Engineering, Procurement and Construction plus Financing.

    ‘’Eight roads that were started in the past administration for concessioning that have gone through all the processes were also approved and that the financial closure should be reached November.’’

    Umahi also said that a 24-hour approval would be given to any state interested in taking over road projects in their domain, while particular conditions must be met for the agreement to take effect.

    He said that the project by the states must conform to the standard of the Federal Ministry of Works as well as meet the tolling system through which they would recoup their investment.

    The minister also disclosed that FEC approved the NNPC and FIRS road projects, which they oversee and fund across the country.

  • Inflation Rate Climbs To 26.72% In September -NBS

    In September 2023, the headline inflation rate increased to 26.72% relative to the August 2023 headline inflation rate which was 25.80%, the National Bureau of Statistics has said. 

    In it’s CPI and Inflation Report for September, released Monday in Abuja, the bureau said the rates showed a showed an increase of 0.92% points when compared to the August 2023 headline inflation rate. 

    On a year-on-year basis, the headline inflation rate was 5.94% points higher compared to the rate recorded in September 2022, which was 20.77%.

    This shows that the headline inflation rate (year-on-year basis) increased in September 2023 when compared to the same month in the preceding year (i.e., September 2022).

    Furthermore, on a month-on-month basis, the headline inflation rate in September 2023 was 2.10%, which was 1.08% lower than the rate recorded in August 2023 (3.18%). 

    This means that in September 2023, the rate of increase in the average price level was less than the rate of increase in the average price level in August 2023. 

  • Analysts Express Concerns Over Timing Of Lifting Forex Ban on 43 Items

    The recent decision by the Central Bank of Nigeria (CBN) to lift the foreign exchange restriction on 43 items is seen as a move that could potentially boost market confidence.

    However, analysts argue that the timing of this decision is challenging, given the current global economic context, where capital flows are unfavorable for emerging economies.

    According to analysts at Afrinvest, the policy has good intentions as it aims to cautiously restore market confidence, which has been undermined by liquidity issues and previous unconventional policies. Nevertheless, the analysts highlight the unfavorable timing, as developed markets are experiencing moderating inflation, which supports improved real rates of return, while emerging markets face forex volatility, high inflation, and political uncertainty, which compound investment risks.

    Afrinvest recommends that the CBN should implement complementary policies to attract the necessary forex to achieve its objectives. They suggest seeking concessionary loans from bilateral and multilateral institutions to bolster foreign reserves. They also advise exploring oil-for-loan agreements to unlock liquidity, along with stronger efforts to combat oil theft and enhance oil production.

    The analysts cite data from the Nigerian Upstream Petroleum Regulatory Commission, which reveals a 14.0% month-on-month increase in the nation’s oil output to an average of 1.35 million barrels per day (excluding condensates) in September 2023. This marks the highest level since January 2022, and they attribute the improvement to the government’s commitment to curbing oil theft and bolstering fiscal capacity.

    Afrinvest emphasizes that the success of the CBN’s decision to reverse the forex ban on 43 items hinges on its ability to provide sufficient liquidity to meet the demand at the official window. They predict that, with adequate liquidity, the parallel market premium will gradually decline, but insufficient liquidity could lead to increased pressure in both the official and parallel markets.

    The analysts advocate a long-term approach to addressing Nigeria’s forex challenges, including containing oil theft, boosting non-oil exports, and encouraging cross-border investment in technology and service-based sectors.

    The CBN recently reaffirmed its commitment to enhancing foreign exchange liquidity and shared a 6-point plan to address forex challenges, including the lifting of the forex ban on 43 items. They also pledged to make regular market interventions and clear the current forex backlog.

    In 2015, the CBN, under the leadership of Godwin Emefiele, had imposed a forex ban on 43 items in an attempt to manage forex and promote import substitution. However, this policy failed to achieve its objectives due to misalignment with market forces and a lack of coordination between fiscal and monetary authorities, resulting in declining forex reserves and a weakening Naira. The decision to lift the forex ban is seen as a positive step to reduce pressure on the parallel market and curb speculative activities, potentially narrowing the gap between official and parallel market rates.

  • Solid Minerals Will Be Nigeria’s Biggest Revenue Earner –Alake   

    The Minister of Solid Minerals Development, Oladele Alake, has said the administration of Bola Ahmed Tinubu is committed to ensuring that the solid mineral sector becomes the biggest revenue generation hub of the country.

    He said for the present administration to achieve its vision of economic rejuvenation, all hands must be on deck.

    Alake said, “We have recognised the fortunes of the oil sector, and we are determined to ensure that the solid minerals sector is the Noah’s ark that would take us out of the deluge of economic challenges that Nigeria currently faces.”

    Speaking during the 22 Annual General Meeting and International Conference of The Nigerian Society of Mining Engineers in Kaduna, Minister Alake enjoined all the stakeholders to be patriotic, saying that the president is determined to take the nation out of the wood.

    Alake stated that the seven point agenda of the present administration is geared towards promoting the public private company that will galvanise financial and physical access of government in the sector.

    “It is now that our country needs patriotic and scientific contributions more than any other time, where all hands must be on deck to realise the vision of the Tinubu led administration, aiming at making solid minerals the biggest revenue generation hub among all sectors in the economic structure of Nigeria.

    “I wish to enjoin your society to be seen and heard in this historic process of rejuvenation and resurgence of the sector that will mature hitherto; our doors are open to ideas and proposals, and we shall re-evaluate all of them and shall reflect with our professional alacrity,” the minister said.

    Meanwhile, the Nigerian Society of Engineers said that Public Private Partnership (PPP) concession will make the private sector concessionaire responsible for full delivery of specified production and infrastructure services.

    “Government should intensify efforts in providing an enabling environment to attract investors into the mining sector for PPP agreement especially as it concerns fully explored strategic mineral deposits,” the Society advised.

    In its communiqué issued at the end of the AGM, the society tasked the federal government on Public Private Partnership, while also urging government and private investors to ensure due diligence before consummating any form of agreement.

    According to the communiqué, “the government should make deliberate efforts in implementing established roadmaps to fast- track the development of the minerals industry.”

    In the communiqué jointly signed by the President and Secretary General of the Society, Eng. Benson Jatau and Engineer Tony Ojile, enjoined the government to embrace PPP in its bids for industrial development in order to attract private expertise for service delivery enhancement.

    The duo however, called on the ministry of solid minerals development to as a matter of urgency resolve the challenge of state interference with the ministry statutory regulatory functions, as otherwise will erode the authority of the minister and also has the tendency of driving away private mining investors.

  • Nigeria’s Underperforming In Oil, Gas Sector Due To Insecurity – Lokpobiri

    Minister of State for Petroleum Resources (Oil), Mr Heineken Lokpobiri, has said that the challenge of insecurity in the Niger Delta was responsible for the underperformance of the petroleum sector.

    The Minister, who said this in a meeting with the Abuja Chapter of the Energy Correspondent Association Friday in Abuja, added that it was also affecting Nigeria’s oil production output.  

    While noting that the issue was making it difficult for the country to meet its OPEC production quota, Lokpobiri said the government was working to address the drawback.

    He was hopeful that by the end of 2023, the country would increase its oil production to about 2 million barrels per day.

    Due to massive crude oil theft and pipeline vandalisation, Nigeria’s oil production presently hovers between 1.3-1.4 million barrels per day.

    “My sole agenda is to increase production. Once we increase production we will get more revenue for the country. You know Nigeria is still more dependent on oil.

    “Though the non-oil sector is also supporting the economy, a substantial part of our forex comes from oil.

    “The reason why we are underperforming is because of insecurity and we are gradually tackling those problems.

    “So, my ambition is to see how I can lead the sector to increase production so that we can get more revenue to deal with the fund and strategic rationale projects in the country.

    “I get the reports from relevant authorities. Today, we are doing about 1.4 million barrels of crude. So, we are steadily increasing but our target is to see how we can get to two million barrels,” he said.

    Lokpobiri urged the industry players to join hands together to find a permanent solution to the issue.

    He said the federal government was discussing with International Oil Companies and local producers to find a lasting solution to the insecurity challenge.

    He said the engagement was already yielding positive results.

    “We have identified where the problem is, and where we are getting the shortfall and we are already engaging them within the next few weeks, we will be able to give you how far we have gone in that direction.

    In an earlier remark, President of the association, Mr Victor Nnodim, assured the minister of the association’s readiness to partner with him as he sought to fulfill his agenda of ramping up crude oil production and delivering a better petroleum industry for the country.

    “We will support you to achieve your mandate,” he said.

  • Diminishing Naira Will Push Inflation To 18-Year High Of 27.67% – Rewane

    Chief executive Officer of Financial Derivatives Company Limited, Bismarck Rewane has projected that inflation is set to rise to 27.57 per cent due to a weak naira.

    This is the ninth consecutive rise in inflation rates.
    Analysts say it would represent the highest figure ever reached since September 2005.
    “Nigeria’s headline inflation is expected to increase again in September, rising to 27.57 per cent from 25.80 per cent in August.

    “Price increases were most notable in the food basket, predominantly commodities with high import content such as flour, semovita, noodles, and sugar.

    “With prices rising, fingers are pointing towards the exchange rate as the major inflation culprit. The naira crossed the psychological threshold of N1,000/$ in the parallel market, pushing up imported inflation despite the relative stability in global food prices. The Food and Agricultural Organisation of the United Nations (FAO) food price index was relatively flat at 121.5 points (pts) in September.”, said Rewane.

    Apart from the weak naira, drivers of inflation includes higher logistics costs and money supply growth (36 per cent year-on-year (y-o-y), saying the price of diesel, the major fuel used by trucks for logistics and distribution purposes, surged to a record high of N1,030/litre during the period.


    “Notably, month-on-month inflation, which is a more current measure of price movement, is expected to decline marginally to 2.78 per cent from 3.18 per cent in August, largely due to the harvest season impact. This suggests that inflation is likely to reach an inflection point and could begin to taper in the first quarter of 2024.

  • Naira Weakens Despite CBN’s Intervention

    Naira Weakens Despite CBN’s Intervention

    Since the unification of all the official foreign exchange (FX) windows, the Naira has continued to depreciate against the US dollar, down by 39.6 per cent to N765.83/$ as of 11 October 2023 from N462.88/$ at the I&E Window.

    Based on the half-year financial markets report of the Central Bank of Nigeria, it has maintained its intervention in the foreign exchange market in an attempt to alleviate demand pressures and ensure exchange rate stability.

    A total of $6,439.33 million was sold at the foreign exchange market made up of spot sales of $1,557.47 million and forward sales of $4,881.86 million.

    The spot sales comprised $612.41 million sold at the inter-bank Secondary Market Intervention Sales (SMIS) window, $455.31 million sold to Small and Medium Enterprises (SMEs), $441.75 million for Invisibles, and $48.00 million sold at the I&E window while the bank purchased a total of $655.53 million in the FX market.

    However, the shocks of the policy have been more pronounced at the parallel market leading to a steep depreciation of the Naira to N1020/US$ on 10 October 2023.

    With little control over the depreciation of the nation’s currency, the then acting governor of the Central Bank of Nigeria (CBN), Mr. Fola Shonubi, announced plans to put in place new policies that would guide the dealings of FX to boost supply in the market.

    Apparently, the measures put in place have not been effective as demand for FX continues to rise amidst an acute shortage of supply.

    “We have always argued that while we believe the unification of the various FX rates is a pro-market policy that will be positive for the economy in the long term, the short to medium-term impact will be hard too hard on the average consumer.

    “A focus on rate convergence without structural reforms to increase the supply of FX will be a case of treating the symptoms while ignoring the underlying cause of the problem which is an acute shortage of supply amidst a growing demand for FX.

    Meanwhile, while crude oil sales and Foreign Portfolio Investments (FPIs) are two major sources of FX that have declined significantly, Oil production remains depressed, reported at 1.57 mbpd in September (highest so far this year) and are yet to see any significant foreign capital inflows.

    According to the Nigerian National Petroleum Company Limited (NNPCL), between September 30 and October 6, 128 crude oil theft incidents were recorded across the oil-producing areas of the Niger Delta.

    In the specific timeframe mentioned, there were numerous illicit activities in the oil sector.

    These included 17 cases of unauthorized connections, 27 illegal refineries, 11 infractions related to vessel tracking systems (AIS), and 49 instances of wooden boat arrests.

  • IMF Downgrades Nigeria’s Economic Growth By 2.9%

    IMF Downgrades Nigeria’s Economic Growth By 2.9%

    The International Monetary Fund (IMF) has downgraded Nigeria’s economic growth by 2.9 per cent for 2023.

    In July, the Fund had projected a 3.2 per cent growth for Nigeria in 2023. The lender however warned that the growth would be impacted by security issues in the oil sector.

    In its October World Economic Outlook with the themed, ‘Navigating Global Divergences,’ posted on its website Tuesday, the IMF said, “Growth in Nigeria is projected to decline from 3.3 per cent in 2022 to 2.9 per cent in 2023 and 3.1 per cent in 2024, with negative effects of high inflation on consumption taking hold.

    “The forecast for 2023 is revised downward by 0.3 percentage point, reflecting weaker oil and gas production than expected, partially as a result of maintenance work.”

    The International lender, while commenting on its new prediction for the country, said: “

    For the sub-Saharan African region, growth is expected to decline to 3.3 per cent in 2023 due to worsening weather shocks, the global slowdown, and domestic supply issues, the IMF said.

     However, growth would pick up by 2024 to 4.0 per cent in 2024, which is still below the region’s historical average of 4.8 per cent.

    It also stated that global economic growth was projected to slow from 3.5 per cent in 2022 to 3.0 per cent in 2023 and 2.9 per cent in 2024, well below the historical (2000–19) average of 3.8 per cent, the IMF declared.

    “Advanced economies are expected to slow from 2.6 per cent in 2022 to 1.5 per cent in 2023 and 1.4 per cent in 2024 as policy tightening starts to bite. Emerging market and developing economies are projected to have a modest decline in growth from 4.1 per cent in 2022 to 4.0 per cent in both 2023 and 2024″, the IMF said.

    The global financial institute stated that global inflation is expected to decelerate to 6.9 per cent in 2023 and 5.8 per cent in 2024 from the present 8.7 per cent in 2022.  

  • Foreign Reserves Drop By $841m In 3 Months -Report 

    Nigeria’s external reserves fell by $841.75 million between July and September, data from the Central Bank of Nigeria (CBN) has revealed.

    The apex revealed in its report on the movement of external reserves that the reserves, which stood at $34.07bn as of July 7, 2023, fell to $33.23bn as of October 5, 2023.

    External reserves fell by $2.85 billion in the first half of 2023 due to external debt finance among other challenges, figures obtained from the CBN showed.

    The CBN had earlier revealed that the reserves which commenced January 3, 2023, at $37.07 billion fell to $34.22 billion as of the end of June 26, 2023.

    According to personal statements released by the CBN by Monetary Policy Committee members, as of July, accretion to external reserves remained weak while foreign exchange demand pressures persisted.

    Former acting Governor, CBN, Folashodun Shonubi, had stated that, “Eventual stability of the foreign exchange market over the medium-term, will further help to achieve price stability.

    “Besides, the recent removal of subsidy could have a favourable effect on price stability as increased crude oil receipts by the government will bolster reserves, engender exchange rate stability, and help to moderate inflation.”

  • Nigeria’s Q2 Capital Importation Decreases By 32.9% – NBS

    In the second quarter of 2023, total capital importation into Nigeria stood at $1,030.21 billion, lower than $1,535.35 billion recorded in the second quarter, indicating a decrease of 32.90 per cent, the National Bureau of Statistics (NBS), has said.

    The bureau noted in its Nigeria Capital Importation Q2 2023, when compared to the preceding quarter, capital importation fell by 9.04 per cent from $1,132.65 billion in Q1 2023.

    The statistics agency stated that Other Investment ranked top accounting for 81.28 per cent ($837.34 million) of total capital importation in Q2 2023, followed by Portfolio Investment with 10.37 per cent ($106.85 million) and Foreign Direct Investment (FDI) with 8.35 per cent ($86.03 million).

    “The production sector recorded the highest inflow with $605.04 million, representing 58.73 per cent of total capital imported in Q2 2023, followed by the banking sector, valued at $194.58 million (18.89%), and Shares with $68.63 million (6.66%).

    “Capital importation during the reference period originated largely from the United States with $271.92 million, accounting for 26.39 per cent, followed by Singapore and the Republic of South Africa with $177.44 million (17.22%) and $136.95 million (13.29%) respectively.

    “Lagos state remained the top destination in Q2 2023 with $778.06 million, accounting for 75.52 per cent of total capital, followed by Abuja (FCT), with $194.28 million (18.86%).

    “First Bank of Nigeria Limited received the highest capital into Nigeria in Q2 2023 with $323.13 million (18.23%), followed by Citibank Nigeria Limited with $187.77 million (12.23%) and Rand Merchant Bank with $126.03 (6.47%), the bureau said.