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Displaying items by tag: Nigeria's gross domestic product (GDP)

As the 2019 General elections draw near in Nigeria, some commercial banks plan to cut lending to avert risks, Ike Chioke, Managing Director, Afrinvest West Africa Limited, has said.

Chioke made the disclosure while releasing the 2018 Nigerian Banking Sector Report in Lagos on Tuesday.

The development is coming in spite of the promise by the Central Bank of Nigeria (CBN) to support banks that fund projects in the agriculture, manufacturing, and other related sectors that are employment and growth stimulating to the economy by refunding Cash Reserve Ratio (CRR) at a single interest rate of 9 percent per annum.

The CBN had said the effort under the differentiated CRR regime was part of measures aimed at increasing the flow of credit to the real sector of the economy in order to consolidate and sustain the nation’s economic recovery

But according to the Managing Director of a Lagos-based investment and research firm, lenders are already cutting loans to key sectors of the economy to reduce the political risks and ensure safety of their funds.

“The political environment is heating up, new alliances are emerging and defections across the biggest parties have punctuated the polity.

“These events are evidence of the prevailing political risk factor in Nigeria, creating uncertainty in the environment, with potential impacts on business and investor confidence,” Chioke said.

He added that the election fears have contributed to the decline in the Foreign Direct Investment (FDI) inflow into the country as some of the investors are caution against the polls.

The Managing Director forecast that with the expected recovery in the non-sector which reflected in the nation’s Q2 Gross Domestic Product (GDP) report, Nigeria’s economy would reach 2.1 percent in 2018.

His outlook is 0.5 percent points from 2.6 percent earlier projected for the nation’s growth.

“To achieve this, we believe that increased spending ahead of the 2019 elections will support non-oil sector activities, while increased oil output due to an additional 0.2 million barrels per day from the Egina Oil Field will drive oil sector growth,” he said.

In August, a $3.3 billion worth Egina Floating Production, Storage and Offloading (FPSO) had sailed from LADOL Island in Lagos to its oil field located in Oil Mining Lease (OML) 130 located some 130 kilometers off the coast of Nigeria at water depths of over 1,500 meters.

The oil field was projected raise Nigeria’s crude oil production by 200,000 barrels per day, an approximate of 10 percent of the country’s total oil production output, when it comes on stream in December.

The project, built by Samsung Heavy Industries of Korea (SHI) for the Egina oil field was primarily operated in Nigeria by the global oil giant, Total, at a cost of $16 billion.

 

Source: The Ripples

Published in Bank & Finance
The Federal Government  of Nigeria on Tuesday said the solid minerals sector in the country is set to receive $3.3 billion foreign investment.
 
The Minister of State in the Ministry of Mines and Solid Minerals, Abubakar Bwari, stated this in Abuja at the Third Nigeria Mining Week.
 
According to him, private investors have expressed their readiness to commit the money to fund some projects in the mining sector.
 
The mining week, a three-day event, was organised by the Miners Association of Nigeria in partnership with PricewaterhouseCoopers and Spintelligent.
 
Speaking further, Bwari said the fund will be used to finance gold mining and refining, foundry works, lead/zinc exploration and production, tin, tantalite and columbite mining and processing.
 
The minister also gave hints of the efforts of the ministry to focus on tackling challenges hindering the formal exploitation of gold, tin and lead-zinc as well stop indiscriminate exports of these mineral commodities to foreign smelters, adding that the ministry had also developed a new Export Guidelines for the Export of Mineral Commodities to ease challenges in the granting of export permits and other licensing issues.
 
 
Source: The Vanguard
Published in Economy
The Central Bank of Nigeria (CBN) said it expects to maintain its tight monetary policy stance until the inflationary pressures ease towards it target band as it doesn’t see oil prices falling below $80 a barrel this year.
 
The Brent crude, against which Nigeria’s oil is priced, had hit its highest level of over $86 per barrel since November 2014 last Wednesday on the back of supply concerns in the international market ahead of United States (U.S.) sanctions on Iran’s oil sector expected to take effect next month.
 
So long as U.S. sanctions take effect on Iran in November, “I do not expect the price to close less than $80 this year,’’ CBN governor, Godwin Emefiele told reporters in London on Sunday.
 
The product, which serves as the nation’s major source of revenue, slumped from its 4-year highs during the week to close at $84.03 a barrel on Friday.
 
Rising oil prices will amount to increased revenue for the country as crude oil price in the 2018 Budget was benchmarked at $51 a barrel. This may cause an increment in capital release for the budget, resulting into excess liquidity and quickening inflation.
 
With CBN’s tight monetary policy position, interest rate among other policy rates at a relatively high levels will reduce liquidity in the Nigerian market and check demands, an intervention that would in turn moderate the macroeconomic variable.
 
The CBN continued to keep its interest rates on hold at a record high 14 percent since July 2016 to curtail inflationary pressures which had risen above its acceptable band of 6 percent to 9 percent for more than three years and accelerated in August for the first time in 19 months.
 
“The current state of tightening will continue until at least we see inflation attaining those levels that have been set” as a target, Emefiele said.
 
Emefiele said the apex bank would not relent in its intervention to support the exchange. “We will continue to intervene, we believe in a stable exchange rate regime,” he said.
 
Ripples Nigeria reports that the CBN had resisted several calls to allow the forces of demand and supply to determine the value of the Naira in the foreign exchange market. Rather, it fixed the exchange rate and continued support the local currency through its interventions.
 
These interventions, including foreign portfolio investors’ exit from emerging economies to take advantage of high yields U.S. as the US FED Reserve continued to raise its interest rate, plunged the nation’s external reserves to $43.92 billion as of October 4, 2018 from a high of $47.79 billion on July 5, 2018.
 
CBN’s spokesperson, Isaac Okoroafor, had last Wednesday affirmed that the current depletion in the nation’s foreign reserves was attributable to the two factors this media platform had pointed out.
 
While explaining that the major reason for Naira appreciation was due to the bank’s forex management strategy, which includes its support, Okoroafor had stated that, “the drop in our forex reserves is basically as a result of the capital flow reversals arising from rising interest rates in the United States.”
 
 
Source: Business Gist
Published in Bank & Finance
Friday, 05 October 2018 12:56

Nigerians may pay more for rice in 2019

The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, has expressed fear over a likelihood of rice shortage across the country next year, which may lead to a hike in the price of the staple food product.
 
Ogbeh said about 14 states are currently being affected with heavy flood, warning that there may be scarcity of rice in 2019 if adequate measures were not taken to replant in some major rice-producing states with severe cases of flood.
 
Ogbeh made this known while speaking at the inauguration of the National Agricultural Seed Council (NASC) Molecular Facility and the 2018 Seed Fair and Farmers’ Field Day in Abuja on Thursday.
 
“We have to find out a way to assist farmers, who were affected by the flood; places like Jigawa, Kebbi, Anambra and Kogi were majorly affected. Farmers lost everything they planted.
 
“There are different varieties of rice that are being produced at NASC like faro 66 and 67 which are flood tolerant. We hope to get them into the field in large quantity for farmers to plant in the near future.
 
“We are also hoping that as soon as the rain seized, we are encouraging farmers to replant so that the residual moisture on the soil plus irrigation can give us another crop by the end of December or early January. Otherwise, we will be in serious trouble for rice, millet, sorghum and maize next year,” the minister said.
 
Also speaking, NASC Director-General, Philip Ojo, said the event was to create awareness about improved seeds to farmers, adding that the agency has achieved some successes in the Nigerian Seed Industry.
 
“NASC collaborations with other stakeholders have started yielded positive results such as the NASC Molecular Facility that will soon be inaugurated.
 
“The facility which is funded by the Bill and Melinda Gates Foundation under the BASICS Programme will help in the development of the Cassava Seed System in the country and enhance productivity,” Ojo said.
 
 
Source: The Ripples
Published in Agriculture
The World Bank has lowered its growth forecast for Nigeria’s economy in 2018 to 1.9 percent as the growth continued to downsize in the oil and agriculture sector.
 
The latest estimate is 0.2 percent points lower than 2.1 percent growth the global financial body earlier projected for the nation’s economy in April.
 
The world bank said its decision to cut Nigeria’s 2018 growth estimate was occasioned by the reduction in the production volume of crude oil, the country’s main source of revenue, and contraction in the agricultural sector of the economy which was largely driven by the herder-farmer clashes.
 
“In Nigeria, declining oil production and contraction in the agriculture sector partially offset a rebound in the services sector and dampened non-oil growth, all of which affected economic recovery.
 
“Nigeria’s recovery faltered in the first half of the year. Oil production fell, partly due to pipeline closures.
 
“The agriculture sector contracted, as conflict over land between farmers and herders disrupted crop production, partially offsetting a rebound in the services sector and dampening non-oil growth,” the bank stated.
 
According to the National Bureau of Statistics (NBS), the oil sector of the economy contracted by -3.95 percent in the second quarter of 2018 from a year earlier, while the non-oil sector grew by 2.05 percent in real terms during the reference quarter.
 
The drop in the oil sector impeded growth in the Nigerian economy to 1.50 percent in the quarter down from 1.95 percent recorded in the preceding quarter.
 
Available statistics from NBS shows that the nation’s agricultural sector grew by 1.19 percent from a year earlier in real terms in the second quarter of 2018, representing a decrease by –1.82 percent points from the corresponding period in 2017.
 
The data further shows that Nigeria’s average daily oil production volume dropped in Q2 2018 to 1.84 million barrels per day after recording an average production volume of two (2) million barrels per day in the previous quarter.
 
The contraction in the Crude oil and Gas sectors was attributable to some production issues which, according to the Minister of Budget and National Planning, Sen. Udoma Udo Udoma, were being addressed by the Nigerian National Petroleum Corporation (NNPC).
 
But the Minister of State for Petroleum, Ibe Kachikwu, had last month noted that the decision to raise or cut production volume would be largely dependent on the prices of crude in the international market.
 
This indicates that there may soon be a rebound in the country’s crude oil production volume as the Brent crude, against which Nigeria’s oil is priced, hit its highest level of $84 per barrel since November 2014 last Monday.
 
The development was occasioned by supply concerns in the international market ahead of United States sanctions on Iran’s oil sector expected to take effect from next month.
 
 
Source: Business linking
Published in Business

The Institute of Chartered Accountants of Nigeria (ICAN) has revealed that the nation’s stunted economic development was attributable to unhealthy politics, poor leadership and the tussle for resources distribution at all levels of government.

ICAN President, Alhaji Razak Jaiyeola, made this revelation while speaking at the 48th Annual Conference of the institute in Abuja on Tuesday.

According to Jaiyeola, the country was yet to leverage the enormous resources which it had been endowed with to accelerate its growth.

“I will not be saying anything new if I assert that Nigeria is a great, blessed and richly endowed nation with abundant human and natural resources. What may be new is that the unhealthy politics of governance, poor leadership and tussle for resource distribution at all levels have stunted, rather than accelerated, the nation’s pace of social and economic development.

“We have not, as a people, leveraged the opportunity of our endowment to advance the cause of the nation and its people. Individual will, rather than the common good, has tended to be the driving force in politics in the last 58 years. No nation prospers under such a scenario,” Jaiyeola said.

He noted that the country’s environment was facing great degradation, impaired ecosystem, air, water and noise pollution owing to the exploration and mining of the nation’s wasting natural resources.

He said the activities were making it difficult for the environment to play its triple functions of food provider, waste assimilator and life sustainer for the present and future generations.

Also speaking, President Muhammadu Buhari said it is a collective task to build the nation, adding that while the accountants’ role remained critical in the fight against corruption, every citizen had a role to play in the fight against insecurity.

In his address, President Muhammadu Buhari said accountants had a critical role in his administration’s fight against corruption.

The President, who was represented by the Minister of Budget and National Planning, Senator Udo Udoma, stated, “Let me first say that with regard to fighting corruption, you have a special contribution to make as accountants in this regard. Your members serving as accountants and auditors can bring to bear your special skills in ensuring that books and records are properly kept.

“Working closely with the statutory agencies responsible for fighting corruption, ICAN will no doubt assist the government in its effort at fighting this national malaise.”

Also speaking at the event, the President of the International Federation of Accountants (IFAC), Rachel Grimes, said trust crisis, in which citizens had lost faith in governing institutions, had been identified across the world.

She added that it was against the backdrop that IFAC developed a strategic plan titled ‘Build Trust; Inspire Confidence’ for 2019 – 2020.

 

The Ripples...

Published in Opinion & Analysis
Thursday, 20 September 2018 12:11

Udom Emmanuel’s midas touch in agriculture

When he was sworn in as governor in 2015, Mr. Udom Emmanuel of Akwa Ibom State, made it clear that his election was an event of some importance. He said “the Akwa Ibom people had come together not to celebrate the triumph of a party, but to celebrate the victory of hope.”
 
He promised “to transform the economy of our state via industrialization and sustain public-private Sector initiative, thereby opening up opportunities for growth and improved living standards.” More than three years after, he has achieved what he promised especially in agricultural sector.
 
Governor Udom Emmanuel has taken a bold step to secure the future of Akwa Ibom State through agriculture in the event that oil ceases to yield as much revenue as it does today. Fortunately, Akwa Ibom state is blessed with arable land and favourable climate that supports all-year-round cultivation and extraction of agricultural and forest products such as palm produce, rubber, cocoa, rice, cassava, yam, plantain, banana, maize, and timber.
 
Through his policy in agriculture, his administration is creating food security, industrial hubs and massive job opportunities for the people of Akwa Ibom. The state is being transformed from one that is heavily dependent on federal allocations to one that generates revenue and earns foreign exchange through agriculture, a vision that Nigeria, even with all its resources still find difficult to achieve.
 
Visionary administration:
 
Udom Emmanuel’s visionary administration from the onset, declared a state of emergency in the agricultural sector, targeting food sufficiency, welfare of the people, export and economic development of the state. With prevailing high cost of living, this couldn’t have come at a better time even as pervasive poverty and hunger ravage the country. It couldn’t have come at a better time than when quality leadership is in short supply.
 
Although its rural communities are largely agrarian, relying on subsistent agriculture, their enormous potentials are now being harnessed for commercial and mechanised farming in cash crops like yam, coconut, plantain, maize, rice, tomatoes, cucumber and rubber as well as animal production, poultry and fish farming.
 
The revolution has, no doubt, taken the state by storm. For instance, the state has created an 11, 000 hectares of coconut plantation. With about two million stands of coconut already planted, the plantation is said to be the largest in the world. It will feed raw materials to the coconut refinery, and at full capacity, the refinery would process 300, 000 coconuts per day. This is a huge foreign exchange earner as virgin coconut oil is a highly priced product in the international market, selling higher than crude oil.
 
The state has also achieved 2,100 hectares of cassava plantation in 15 Local Government Areas under the FADAMA programme. To complement that, the government embarked on the construction of 33 cassava micro processing mills.
 
To take it a step further, the government embarked on refurbishment of cassava processing plants at Ikot Okudom, Eket Local Government Area, Nung Udoe, Ibesikpo/Asutan Local Government Area as well as Ikot Ekang in Abak council area. These factories were leased to private sector operators for the production of high quality garri, odourless fufu and cassava flour.
 
Under the Udom Emmanuel administration, 48,000 rice farmers have so far been registered under the Central Bank of Nigeria (CBN) Anchor Borrowers scheme. So far, over 100 hectares of rice farmland have been cultivated.
 
As a result of its commercial value, coupled with the comparative advantage Akwa Ibom State has in the production of cocoa, the Udom Emmanuel administration has so far, trained 450 youths in new methods of planting cocoa and other extension services to its farmers in the state. The state went further to establish Special Cocoa Maintenance Scheme (SCMS) for the training of farmers and youths on pruning/shade management, under brushing, and tree care by fumigation, in order to ensure the improved yields from 300 kg/hectare to 2, 000kg/hectare over a period of  three years.
 
About 500, 000 improved cocoa seedlings were raised for distribution to farmers at highly subsidised rates across the 28 cocoa producing Local Government Areas in the state.
 
In poultry business, the Akwa Prime Hatchery, located at Mbiaya, Uruan has produced and distributed about 160, 000 birds to contract farmers across the state. The Hatchery has a capacity to produce 10, 000 day-old-chicks per week. The government also embarked on distribution of improved corn seedlings to farmers; Construction of vegetable green houses and cattle ranch.
 
Under the Graduate Unemployment Youth Scheme (GUYS), no fewer than 300 youths have been trained. Each of the young graduates is to be empowered with one million naira to embark on any agricultural enterprise of their choice.
 
In order to boost mechanised farming in the state, the Udom Emmanuel administration also established a Tractor Hiring Enterprise Centre. This is aimed at making such farm equipment available and affordable to farmers.
 
To further illustrate its commitment to the revolution, the administration procured about 600, 000 bags of fertilizers for farmers in the state. In September 2016 alone, 1,000 bags of special cocoa fertilizer were imported from Ghana for optimal yield. The government also planted about 500 citrus seedlings, 600 hybrid plantain suckers and 1, 000 pineapple suckers at the Horticulture Garden in Uyo.
 
Transfer of improved technologies:
 
At Ebighi Anwa, Okobo council area of the state, the government in partnership with the Rubber Research Institute of Nigeria established a large hybrid rubber nursery for distribution to rubber farmers in the state at a highly subsidised rate. It went further to establish demonstration plots of various agricultural technologies for the transfer of improved technologies to farmers through the Akwa Ibom Agricultural Development Programme (AKADEP).
 
Furthermore, the state established three model villages for production, processing and packaging of Vitamin A products as well as partnering Word Bamboo Organisation for bamboo development in the state.
 
In animal production and husbandry, the governor has equally made remarkable progress. It is working in collaboration with Carlos Farms, a Mexican group that has interest in commercial agriculture. The firm is investing in massive commercial farming in Nigeria to develop ranches. The aim is not just cow production but also processing of cow milk for dairy companies in the country.
 
The governor’s giant strides in agriculture is largely indicative of his leadership acumen. No doubt, his versed experience in the private sector and corporate governance has been of great benefit to Akwa Ibom state. His ability to attract private investors and some times, go into Public Private Partnership (PPP) is an indication of a man who has what it takes to be in leadership position.
 
Published in Agriculture

Zainab Ahmed, who is acting minister of finance, said Monday that Nigeria’s economy faced “challenging times” as she formally assumed duty.

President Muhammadu Buhari appointed her to oversee the finance ministry following the the resignation of Kemi Adeosun who resigned over forged certificate of the National Youth Service Corps (NYSC).

Ahmed, who is the Minister of State, Budget and National Planning, said the new task would require collaboration with minister officials to achieve success.

Mahmoud Isa-Dutse, permanent secretary and some directors in the ministry, welcomed her.

“These are very challenging times for our country. It means we are part of the economic team that has been charged with making sure there is economic stability in our country,” she said.

“We have very serious revenue challenges and it is up to us to shore up the revenues of this country.

“Mr President has a lot of confidence that we can do this very well together. We are working for Mr President, but at the end of the day we are working for the benefit of the citizens of our country.

“There are a lot of sacrifices that I know that you have done, and we are going to push ourselves to still do more so that at the end of the day we will say Alhamdulillah– glory be to God!

“The finance ministry has overtime been known to have very skilled personnel; from interacting with some of you, I know that there is a lot of skill set within the ministry, and that I am in good hands.

“I plan to work very closely with the whole of the directors, most especially with the permanent secretary.

“I want to declare that today the permanent secretary is my new next-of-kin. What that means is that I am going to work hand-in-gloves with him, and I expect everybody to do the same thing.

“There are some things I know about finance, but there is a lot that I don’t know; and the knowledge resides in you.”

 

Vanguard.

Published in News Economy

The Nigeria’s inflation rate has rebounded in August for the first time since January 2017 after recording 18 consecutive months of downward trend, according to the National Bureau of Statistics (NBS).

In the August inflation report by the statistics bureau on Friday, the nation’s Consumer Price Index (CPI), which measures inflation, rose by 0.09 percent points to 11.23 percent in August.

This implies the prices of goods and services rose at a faster rate in review month – just like June 2018 – when compared with July 2018.

The headline inflation had been on steady decline from 18.72 percent since January 2017 to 11.14 percent in July 2018, this was after it fell to 18.55 percent in December 2016.

In spite of the persistent decline during the period, the macroeconomic variable remained above the Central Bank of Nigeria’s (CBN) acceptable band of 6 percent to 9 percent.

The CPI measures the composite changes in the prices of consumer goods and services, such as food, transportation, and medical care, purchased by households, over a period.

The NBS said food inflation also surged to 13.16 percent YoY in August up from 12.85 percent recorded in previous month, while core inflation, which excludes agricultural produce, dropped from 10.2 percent in July to 10.0 percent in August.

The CBN had expressed fear over the possibility of a rebound in the macroeconomic indicator in the second half of 2018 as a result of increased spending ahead of the 2019 general elections.

In August, the CBN said it may consider raising its key lending rate for the first time in two years if the inflation rate worsens.

The Monetary Policy Committee (MPC) of the CBN in its July meeting had retained the Monetary Policy Rate (MPR) at record-high of 14 percent for the 11th consecutive time since 2016 to monitor the magnitude of the liquidity impact of the fiscal injection and election related expenditure.

 

The Ripples.

Published in News Economy

Following declines in the value of shares of Nestle Nigeria, Guaranty Trust Bank, Zenith Bank and other highly capitalized stocks, the trading activity on the floor of the Nigeria Stock Exchange (NSE) on Monday closed in red to start the week.

The bearishness recorded at the market was as a result of persisted sell pressures on the local bourse, dragging the key performance indicator of the NSE, the All-Share Index (ASI), down by 1.25 percent to close at 34,037.91 points, and plunging the year-to-date loss of the ASI to -12.16 percent.

After the close of business, equities investors lost a total of N155.60 billion in value as market capitalization of all listed stocks, which opened at N12.27 trillion, dropped to N12.43 trillion.

Consequently, the total volume and value of transactions dipped by 11.75 percent and 35.53 percent from 155.95 million shares and N2.1 billion to 137.63 million shares and N1.36 billion, respectively.

Performance across sectors was also bearish, as indices of all major sectors headed to the south. The NSE Consumer Goods index led the sector decliners, falling by 3.69 percent as investors sold off Nestle Nigeria, which dropped by 9.7 percent, and Nigerian Breweries shedding 0.4 percent.

NSE Insurance index trailed with 2.09 percent depreciation on the back of sell-offs in NEM Insurance and Continental Reinsurance, while NSE Banking index dropped by 1.25 percent, driven by sell pressures in Guaranty Trust Bank, Zenith Bank and Access Bank, which fell by 1.4 percent, 1.9 percent and 1.7 percent, respectively.

Similarly, Forte Oil, which shed 9.3 percent, pulled the NSE Oil & Gas index down by 0.52 percent, while NSE Industrial Goods index closed flat amid profit taking activity on Cutix, dropping 0.25 percent of its share value.

Nestle Nigeria led the laggards chart, depreciating by 9.67 percent to close at N1,355 per share. Global Spectrum Energy Services followed by shedding 9.45 percent to close N5.75 per share, while Forte Oil dropped 9.29 percent to close at N19.05 per share.

Regency Alliance Insurance Company lost 8.70 percent to close at 21 Kobo per share, while Japaul Oil fell by 7.69 percent to close at 24 Kobo per share.

On the flip side, Sunu Assurances Nigeria emerged the top gainer with10 percent to close at 22 Kobo per share. Union Diagnostic & Clinical Services trailed by gaining 7.41 percent to close at 29 kobo, while Honeywell Flour garnered 5.56 percent to close at N1.52 per share.

University Press gained 4.17 percent to close at N2 per share, while Mutual Benefits Assurance rose by 3.70 percent to close at 28 Kobo per share.

Guaranty Trust Bank was the most traded stock in value after recording 29 percent of the total investment turnover, reaching 11.25 million volumes of shares valued at N390.94 million.

Nigerian Breweries, which accounted for 26 percent of the total return, traded a total volume of 2.36 million worth N218.80 million, while Zenith Bank sold 6.64 million volume of shares at N136.60 million.

United Bank for Africa traded 16.66 million shares valued at N130.87 million, while Nestle Nigeria transacted 87,930 shares worth N119.77 million.

Analysts at Afrinvest Securities said the market performance reflects investors’ bearish outlook on the market as political risks remain heightened and in addition to continued absence of positive drivers.

In spite of the negative performance, the analysts remained optimistic that some bargain hunting would drive performance in the near term.

 

Vanguard

Published in Business
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