Economy
What Awaits Nigeria’s Economy in Buhari’s 2nd Term
By Modupe Gbadeyanka
The presidential election in Nigeria may have come and gone, but the effect will be with the Africa’s largest economy for the next four years.
Last Saturday, Nigerians went to the polls to re-elect President Muhammadu Buhari for another four years.
In his first four years in office, which will officially end on May 29, 2019, the nation suffered its first recession in many years.
During the period, a lot of investors rushed to pull out their funds from the country and the stock market suffered for it.
Also, the President had to spend a chunk of his time in office treating himself at a hospital in London, creating the impression that he was not fully fit to govern the country.
As the country prepare for another four years of President Buhari, analysts at United Capital Research have given their views on the economic outlook in his second term in office.
“The outlook for the economy over the next four years is positive but modest as President Buhari’s victory signals policy stability,” the firm said.
It was stated that the administration will clearly continue to invest in infrastructure, sustain its welfare scheme, reinforce the drive to substitute imports for local production, and retain its intervention programs across the Agric, Power and the SMEs space, by building on its Economic Recovery and Growth Plan (ERGP).
“We expect the budget to remain large, broadly financed by borrowings. However, the role of the private sector may be limited by the absence of far-reaching liberal policies.
“This may keep investment low and output growth soft. Accordingly, we expect GDP growth to sustain a gradual uptick over the next four years, rising from 2.0% to 3.5% or more over the period.
“Inflation rate is likely to ease 10%/9%, though minimum wage implementation and power tariff adjustment may weigh on prices.
“Thus, interest rate may to revert to its long term 12% over the period. In the rest of the report, we highlight our views of the medium term economic outlook for Nigeria,” it said.
The firm further said beyond elections, the medium to long term outlook for the Nigerian economy depends on the position of government on the implementation of far-reaching economic reforms to fix the structural challenges in the economy.
“If not urgently addressed, structural constraints such as; the enormous infrastructural deficit, poor electricity supply, sharp rising population growth, dependence on oil export and oil revenue for budget funding, and the problem of the viability of sub-national governments, are bound to mar economic progress.
“Notably, system inefficiencies continue to undermine the ability of the federal government to diversify its revenue base, enhance social justice, allocate resources efficiently and drive economic diversification. If the stance of the current administration over the last four years is anything to go by, we do not envisage a significant drive for bold reforms.
“However, we expect investment in infrastructures such as rail project, road, and similar social amenities to continue in a bid to bridge the infrastructural gap.
“Again, the drive to diversify government revenue via improving the efficiency of tax authorities such as the FIRS, Customs and Ports Authorities, and support the SMEs boost job creation through intervention in the Agric sector will continue.
“Finally, efforts to ease doing business in Nigeria, via the initiatives of the Presidential Enabling Business Environment Council (PEBEC), by reviewing the bureaucracies and red tapes within the civil service and other government agencies, should be more obvious going forward,” the report said.
In its report, United Capital Research further during the period, it expects the present Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, if retained by the President for another term in office, to sustain its current fixed/multiple forex regime.
On monetary policy, it said aggressive liquidity mop-up via persistent OMO issuances may be retained considering that FX rate will broadly drive policy actions.
On the government’s anti-corruption war, the company said efforts to stamp-out corruption will be sustained and the EFCC will continue to clamp down on looters and individuals with allegations of misappropriation of public funds.
Over the last three to four years, the implementation of TSA, whistleblower’s policy and the efficiency unit of the Ministry of Finance, by the administration has supported significant improvement in independent revenue and recoveries.
“While this will remain appealing to the poor masses, it may rein in discretionary spending by the elite, ultimately limiting the growth rate of aggregate spending in the economy, especially on activities in the services sector,” it said.
On security and social political environment, it said a major aspect of the socio-political environment that seems to have benefited a lot from President Buhari’s first 4-year is the war against insurgency.
If the voting pattern from the region is anything to go by, the massive re-election of the President by voters in Borno and Yobe (the most affected States) suggests that the perceived containment of Boko Haram activities by the Buhari government is paying off.
“Hence, we imagine that another four years in office is positive for relative peace and security in the North Eastern region of the country,” it stated.
By Adedapo Adesanya
Dangote Petroleum Refinery is seeking to raise about $1 billion through a private placement that values the company at $39.1 billion.
According to reports, the refinery is offering 3 billion ordinary shares at $0.35 per share. Investors must subscribe for at least 1 million shares, equal to $350,000, with additional subscriptions accepted in multiples of 500,000 shares. The shares will be subject to a 365-day lock-up period from allotment.
It was reported that demand for the offer has already exceeded $2 billion, suggesting that the placement may be oversubscribed.
The operation is already attracting the interest of local investors. Recall that Nigerian billionaire, Mr Femi Otedola, has committed $100 million, while Afrobeats superstar, Mr David Adeleke, popularly known as Davido, also announced he would participate.
The proceeds will be used for expansion projects and general corporate purposes as the refinery deepens its role in Nigeria’s fuel supply market.
The facility has a nameplate capacity of 650,000 barrels per day and began fuel production in 2024. It produces diesel, aviation fuel, naphtha and premium motor spirit.
Standard Bank Group has also said it plans to play a leading role in the refinery’s future public listing, after the facility completed test runs at 700,000 barrels per day. It aims to reach 1.4 million barrels per day by 2028.
The fundraising is likely to renew expectations of a future public listing with a major stakeholder, Mr Aliko Dangote, saying the refinery could be listed, though no timeline was disclosed in the memorandum.
The current placement is seen as an early step that could expand ownership ahead of any future initial public offering (IPO).
Mr Dangote plans to sell between 5 and 10 per cent of the refinery on five major African exchanges: the Nigerian Exchange (NGX), the Johannesburg Stock Exchange (JSE), the BRVM, the Nairobi Securities Exchange (NSE) and the Ghana Stock Exchange (GSE).
It has appointed Stanbic IBTC Capital, Vetiva Capital Management and FirstCap to lead the planned initial public offering of its refinery business on the Nigerian Exchange.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange entered a third straight day of losses after it fell by 0.12 per cent on Wednesday, June 10.
The depletion trimmed the market capitalisation further by N3.1 billion to N2.590 trillion from N2.593 trillion, and cut the NASD Unlisted Security Index (NSI) by 5.19 points to 4330.12 points from 4,335.31 points.
11 Plc lost N22.21 during the session to finish at N221.00 per share versus the previous day’s N243.21 per share, MRS Oil Plc depreciated by N6.90 to N158.10 per unit from N165.00 per unit, and Central Securities Clearing System (CSCS) Plc decreased by N2.81 to N78.32 per share from N81.13 per share.
On the flip side, FrieslandCampina Wamco Nigeria Plc went up by N9.27 to N183.08 per unit from N173.81 per unit, Nitrox Industrial Gases Plc added N1.92 to its value to close at N23.80 per share compared with the preceding day’s N21.88 per share, and Food Concepts Plc gained 10 Kobo to exchange at N2.58 per unit, in contrast to Tuesday’s closing price of N2.48 per unit.
At the close of business, the volume of securities traded by investors contracted by 92.6 per cent to 117,374 units from 1.6 million units, and the value of securities moderated by 80.5 per cent to N12.2 million from N62.3 million, while the number of deals increased by 4.9 per cent to 43 deals from 41 deals.
Great Nigeria Insurance (GNI) Plc finished the day as the most traded stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units traded for N6.5 billion, and CSCS Plc with 65.2 million units exchanged for N4.4 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million
By Adedapo Adesanya
The Naira fell against the United States Dollar by N1.50 or 0.11 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) to sell at N1,362.05/$1 on Wednesday, June 10, compared with the N1,360.55/$1 it traded on Tuesday.
Also, the local currency lost N4.33 against the Pound Sterling in the official window yesterday to trade at N1,827.33/£1 versus the preceding day’s N1,823.00/£1, and depreciated against the Euro by N1.74 to quote at N1,575.35/€1, in contrast to N1,573.61/€1 of the previous session.
However, at the GTBank forex desk, the Naira gained N3 against the US Dollar to sell at N1,370/$1 versus N1,373/$1, and at the parallel market, it remained unchanged at N1,380/$1.
Updated data from the Central Bank of Nigeria (CBN) showed that foreign reserves surged further due to additional inflows from various sources. Nigeria’s gross external reserves increased to $50.439 billion, its highest level since March 2026, reflecting sustained inflows from oil revenue and other FX sources.
Also, the International Monetary Fund (IMF) has said increased confidence in the Naira, supported by lower and more stable inflation, would encourage households, businesses and investors to hold more local currency assets and reduce reliance on foreign currencies.
The global lender, in a recent assessment, stressed the importance of strengthening the CBN’s operational framework and aligning liquidity management operations more closely with monetary policy objectives.
In the cryptocurrency market, there were recoveries from recent losses as US headline inflation rose an expected 0.5 per cent in May, but the beat on the core rate — which cuts out food and energy costs — pleased markets. The core rate, though, rose just 0.2 per cent in May against forecasts for 0.3 per cent.
The print reinforces the view that the US Federal Reserve will keep interest rates at 350-375 basis points at its June 17 meeting, but is likely to increase rates by 25 basis points by the end of the year.
Cardano (ADA) went up by 2.4 per cent to $0.1647, Bitcoin (BTC) rose by 2.3 per cent to $62,794.09, Binance Coin (BNB) jumped 1.8 per cent to $596.23, Ethereum (ETH) grew by 1.7 per cent to $1,658.12, and Solana (SOL) also soared by 1.7 per cent to $65.23.
Further, Dogecoin (DOGE) appreciated by 1.5 per cent to $0.0849, Ripple (XRP) expanded by 0.4 per cent to $1.11, and TRON (TRX) increased by 0.05 per cent to $0.3218, while the US Dollar Tether (USDT) lost 0.10 per cent to close at $0.9989, and the US Dollar Coin (USDC) declined by 0.01 per cent to $0.9997.
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