Economy

S&P Cuts Nigeria’s 2020 GDP Growth Forecast to 1.5%

Published

6 years ago

27/03/2020

By Dipo Olowookere

The Gross Domestic Product (GDP) growth forecast for Nigeria in 2020 has been revised downward to 1.5 percent from 2.2 percent by Standard and Poors (S&P).

In a press statement issued on Thursday, the rating agency also announced lowering its long-term foreign and local currency sovereign credit ratings on Nigeria to ‘B-’ from ‘B’.

In addition, the renowned company said it has affirmed its ‘B’ short-term sovereign credit ratings on Nigeria, while downgrading its long-term Nigeria national scale rating to ‘ngBBB’ from ‘ngA-’ and affirming the ‘ngA-2’ short-term Nigeria national scale rating.

S&P explained that the economic growth projection was reduced to 1.5 percent “since the effects of lower oil revenue will filter through to the non-oil real sector” of the country.

“We forecast real GDP will expand by a modest 2 percent over 2020-2023.

“In per capita terms, this translates into economic contraction over our forecast horizon through 2023. Nigeria’s per capita GDP remains below that of several peers, with income levels below $2,000 in 2020,” it said in the statement.

Early this month, the Organisation for the Oil Producing Exporting Countries (OPEC) failed to agree to a proposed reduction of 1.5 million barrels per day (mmbbl/d) to address an expected significant drop in global demand partly due to the spread of the coronavirus.

Shortly after the meetings, Saudi Arabia announced that it was immediately slashing its official selling price and would increase its production to over 12 mmbbl/d in April after the current production cut expires next Tuesday.

These actions possibly signal that, despite a collapse in global demand and shrinking physical markets, Russia and Saudi Arabia may engage in a price war to try and maintain market share and market relevance.

Oil markets are now heading into a period of severe supply-demand imbalance in second-quarter 2020.

Given that Nigeria’s reliance on oil revenue is still high, over 85 percent of goods exports and about half of fiscal revenues, lower oil prices in 2020 will significantly hurt its external and fiscal positions, S&P said.

“We estimate the economy will grow about 1.5 percent in 2020 (our previous estimate was 2.2 percent) and average 2.0 percent in 2020-2023.

“Our forecast for a sharp decline in oil prices, and consequent lower export revenues, are likely to result in the current account deficit increasing to 3.3 percent of GDP this year before moderating over the medium term and averaging -1.1 percent in 2020-2023,” the agency said.

S&P had said in February 2020 that the Brent oil prices were expected to average $60 per barrel (/bbl) in 2020 and to gradually decline to $55/bbl from 2021.

However, based on recent development, it has now projected price of the Brent oil at $30/bbl in 2020, $50/bbl in 2021, and $55/bbl from 2022.

In the 2020 budget, Nigeria pegged the crude oil benchmark at $57/bbl, but the COVID-19 pandemic forced a downward review recently to $30/bbl, with the size of the budget cut by N1.5 trillion from just over N10 trillion.

In its statement yesterday, S&P said on the fiscal side, lower oil-related revenue will keep general government in Nigeria (federal and state government combined) fiscal deficits elevated at about 5 percent of GDP this year, delaying planned gradual consolidation, before averaging 4.2 percent in 2020-2023.

The federal government has and will continue to make efforts to increase non-oil revenue, including the increase in value-added tax to 7.5 percent from 5.0 percent, reducing fuel subsidies, and raising electricity tariffs among other administrative measures, it said.

“In addition, adjustments to the exchange rate should also yield the federal government higher Naira revenues. Nevertheless, these measures are not expected to be enough to compensate for the forecast reduction in oil revenue. In addition, COVID-19-related spending is likely to affect expenditure,” the statement said.

Economy

MTN to Acquire Additional 75% Stake in IHS Holdings for Full Control

Published

56 minutes ago

06/02/2026

Adedapo Adesanya

By Adedapo Adesanya

MTN Group, Africa’s largest mobile network operator, has entered advanced discussions to buy approximately 75 per cent of shares in IHS Holding Limited (IHS Towers) that it does not already own.

The move would give the South African telco full control of IHS, which is the leading independent tower operator in several of its key markets, providing colocation services and supporting the expansion of mobile networks in regions with growing demand for digital connectivity.

In a cautionary announcement to investors on Thursday, MTN confirmed it is considering a transaction to acquire the remaining stake in the New York Stock Exchange-listed IHS, following recent market speculation.

The potential offer price would be “at a level near the last trading price” of IHS shares on the NYSE as of February 4, 2025, a period when the stock has seen a sharp rise in recent months, reflecting renewed investor confidence in the sector.

No binding agreement has been reached, and MTN emphasised there is no certainty that the deal will proceed.

However, if completed, the transaction could materially impact MTN’s share price, prompting the company to advise shareholders to exercise caution in trading until further updates.

MTN already holds a significant stake in IHS and maintains a deep operational partnership across multiple African markets.

Over the past decade, MTN has sold thousands of passive network sites to IHS through sale-and-leaseback deals, including a major transaction in South Africa in 2022 involving over 5,700 towers.

These arrangements allowed MTN to free up capital from infrastructure while securing long-term tower access via master lease agreements.

A full buyout would represent a dramatic strategic pivot for MTN, effectively bringing tower infrastructure back in-house after years of outsourcing to specialised operators like IHS.

MTN has previously voiced concerns about corporate governance at IHS, adding context to its cautious approach in the announcement.

If the deal falls through, MTN said it would continue exploring options to unlock value from its IHS investment, consistent with its disciplined capital allocation strategy.

The potential acquisition underscores the evolving dynamics in Africa’s telecom infrastructure sector, where operators weigh the benefits of owning versus leasing critical assets amid rising data demands and economic pressures.

Economy

NASD Exchange Moves Higher by 0.77%

Published

1 hour ago

06/02/2026

Adedapo Adesanya

By Adedapo Adesanya

For the third consecutive trading session, the NASD Over-the-Counter (OTC) Securities Exchange ended in the green territory, rising further by 0.77 per cent on Thursday, February 5.

Two price gainers helped the bourse to rally during the session, with the market capitalisation up by N16.87 billion to N2.197 trillion from N2.180 trillion and the NASD Unlisted Security Index (NSI) up by 3.18 points to 3,672 points from the 3,644.48 points in the midweek session.

The advancers’ group was led by Central Securities Clearing System (CSCS), which added N3.70 to sell at N48.67 per share versus the previous day’s N44.97 per share, and Afriland Properties Plc expanded by N1.01 to N15.01 per unit from N14.01 per unit.

It was observed that the alternative stock exchange recorded two price losers led by Geo-Fluids Plc, which further lost 51 Kobo to sell at N4.75 per share versus Wednesday’s closing price of N5.26 per share, and Industrial and General Insurance (IGI) declined by 6 Kobo to 59 Kobo per unit from 65 Kobo per unit.

During the session, the volume of securities transacted by investors slid by 51.9 per cent to 1.2 million units from 2.5 million units, the value of securities went down by 32.0 per cent to N12.0 million from N17.7 million, and the number of deals increased by 27.8 per cent to 23 deals from 18 deals.

At the close of trades, CSCS Plc was the most traded stock by value on a year-to-date basis with 16.2 million units exchanged for N659.9 million, followed by FrieslandCampina Wamco Nigeria Plc with 1.7 million units traded for N117.8 million, and Geo-Fluids Plc with 12.3 million units valued at N79.1 million.

CSCS Plc remained the most active stock by volume on a year-to-date basis with 16.2 million units sold for N659.9 million, trailed by Mass Telecom Innovation Plc with 13.6 million units valued at N5.5 million, and Geo-Fluids Plc with 12.3 million units worth N79.1 million.

Economy

NGX Index Crosses 170,000 Points as Investors Sustains Buying Pressure

Published

1 hour ago

06/02/2026

Dipo Olowookere

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited recorded another milestone after it further closed higher by 1.18 per cent on Thursday amid renewed confidence in the market.

The All-Share Index (ASI) crossed the 170,000-point threshold during the session as it added 1,975.18 points to the preceding day’s 168,030.18 points to settle at 170,005.36 points.

Also yesterday, the market capitalisation of Customs Street was up by 1,268 trillion to N109.129 trillion from the N107.861 it ended a day earlier.

The growth recorded during the session was powered 55 equities, which outweighed the losses recorded by 19 other equities.

Guinea Insurance expanded by 10.00 per cent to N1.43, Seplat Energy grew by 10.00 per cent to N7,370.00, RT Briscoe increased by 9.95 per cent to N11.49, Neimeth chalked up 9.90 per cent to close at N11.10, and Zichis rose by 9.89 per cent to N6.11.

At the other side, Deap Capital lost 9.62 per cent to trade at N6.20, Universal Insurance slipped by 9.43 per cent to N1.44, Haldane McCall declined by 9.09 per cent to N4.00, Red Star Express went down by 9.04 per cent to N15.60, and UPDC depreciated by 7.02 per cent to N5.30.

Business Post reports that the energy index was up by 4.68 per cent, the industrial goods improved by 0.79 per cent, the banking space grew by 0.64 per cent, and the consumer goods sector soared by 0.11 per cent, while the insurance counter lost 0.31 per cent.

Yesterday, market participants traded 713.0 million stocks valued at N22.3 billion in 46,104 deals versus the 694.8 million stocks worth N20.6 billion transacted in 42,095 deals on Wednesday, showing a spike in the trading volume, value, and number of deals by 2.62 per cent, 8.25 per cent, and 9.52 per cent, respectively.

Access Holdings sold 106.6 million shares valued at N2.5 billion, Chams transacted 44.5 million equities worth N201.3 million, Champion Breweries traded 44.5 million stocks for N774.3 million, Universal Insurance exchanged 34.8 million shares worth N53.6 million, and Deap Capital sold 22.7 million equities valued at N141.9 million.