Economy
AfDB Forecasts 4.1% GDP Growth for Nigeria, Others in 2023
By Adedapo Adesanya
The African Development Bank (AfDB) says Nigeria and other economies of Africa are projected to grow by 4.1 per cent in 2023 and 4.3 per cent in 2024.
This was announced by the President of the regional lender, Mr Akinwumi Adesina, while inaugurating the African Economic Outlook (AEO) 2023 at the ongoing 2023 AfDB Annual Meetings in Sharm El Sheikh, Egypt.
According to him, the economies on the continent have shown remarkable resilience in spite of the multiple and dynamic shocks it faces.
“These multiple and dynamic shocks have weighed on Africa’s growth momentum, with growth in real Gross Domestic Product (GDP) estimated at 3.8 per cent in 2022.
“This is down from 4.8 per cent in 2021. The GDP growth in 2022 is above the global average of 3.4 per cent.
“Africa has also shown remarkable resilience, evident in the projected consolidation of economic growth in the medium term.
“The outlook remains positive and stable, with a projected rebound to four per cent in 2023 and further consolidation to 4.3 per cent in 2024,” he said.
The AfDB boss attributed the slowed growth on the continent to the tightening global financial conditions and supply chain disruptions exacerbated by Russia’s invasion of Ukraine, which subdued global growth.
He said growth was also impaired by the residual effects of the COVID-19 pandemic and the growing impact of climate change and extreme weather events.
Mr Adesina said Africa had a great potential to pursue green growth and climate objectives to accelerate economic growth, given its enormous advantages.
He said the continent had some of the world’s fastest-growing economies, and its real GDP growth was projected to surpass the global average from 2023 to 2024, even as headwinds persist.
He further said the continent also had an important human capital base, with its population projected to increase to 2.4 billion by 2050.
“As most of the current population is young, compared with other regions’ ageing populations, Africa is the current and future frontier market in green growth opportunities. Africa hosts 25 per cent of the world’s natural biodiversity and 30 per cent of the world’s mineral resources, most of which will be essential for a green transition.
“Africa has a large “renewable energy potential, including wind, solar, hydropower, and geothermal and the world’s highest solar energy potential. Countries in the continent also have the greatest potential for investments in green infrastructure and technology,” he noted.
The AfDB president also said this was due to their low levels of development, low legacy high-emissions infrastructure, and low frequency of infrastructure and project finance default rates, estimated at 5.5 per cent.
On his part, the AfDB Vice President for Economic Governance and Knowledge, Mr Kelvin Urama, said currency stability remained an issue noting that countries with appreciating currencies include Angola (27.1 per cent), Seychelles (15.6 per cent), and Zambia (15.3 per cent).
Mr Urama said depreciation rates could ease in 2023 and 2024, but continued strengthening of the U.S. dollar would keep African currencies under pressure.
He said currency weaknesses in some of Africa’s more globally integrated economies (Kenya, Nigeria, and South Africa) are expected to persist in 2023.
“This is largely due to potential capital outflows as investors search for safe assets in advanced economies.’’
“Public debt is projected to remain high, with lingering vulnerabilities. However, the median public debt in Africa is estimated to have declined to 65 per cent of GDP in 2022 from 68 per cent in 2021.
“Thanks to debt relief initiatives in some countries, it will remain above the pre-pandemic level of 61 per cent of GDP.
The economist said this debt-GDP ratio was expected to increase to 66 per cent in 2023 and then stabilise at around 65 per cent in 2024.
He said this was due to growing financing needs associated with rising food and energy import bills, high debt service costs due to interest rate hikes, exchange rate depreciations, and rollover risks.
By Adedapo Adesanya
The duo of Geo-Fluids Plc and Afriland Properties Plc propelled the NASD Over-the-Counter (OTC) Securities Exchange up 0.13 per cent on Friday, January 10.
Investors gained N1.4 billion during the trading session after the market capitalisation of the bourse ended at N1.053 trillion compared with the previous day’s N1.052 trillion, and the NASD Unlisted Security Index (NSI) increased at the close of business by 4.07 points to wrap the session at 3,073.93 points compared with 3,069.86 points recorded at the previous session.
Geo-Fluids added 25 Kobo to its value to close at N4.85 per unit compared with the previous session’s N4.60 per unit, and Afriland Properties Plc gained 24 Kobo to close at N16.25 per share versus Thursday’s closing price of N16.01 per share.
There was a 35.4 per cent fall in the volume of securities traded in the session as investors exchanged 4.3 million units compared to 6.6 million units traded in the preceding session, the value of shares traded yesterday went down by 37.4 per cent to N17.2 million from the N27.5 million recorded a day earlier, and the number of deals decreased by 47.2 per cent to 19 deals from the 36 deals recorded in the preceding day.
FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and Industrial and General Insurance (IGI )Plc with 10.7 million units sold for N2.1 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.
By Adedapo Adesanya
The Naira witnessed a depreciation on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, January 10.
According to data from the FMDQ Exchange, the local currency weakened against the greenback yesterday by 0.12 per cent or N1.80 to sell for N1,543.03/$1 compared with the preceding day’s N1,541.23/$1.
The pressure on the domestic currency came as the access granted to the Bureaux de Change (BDC) operators by the Central Bank of Nigeria (CBN) to purchase FX from the official market through the Electronic Foreign Exchange Matching System (EFEMS) platform prepares to end next week, precisely on January 19.
The CBN had given a 42-day window to the operators to access the platform to help stabilise the Naira in December, and this expires next week.
On Friday, the Nigerian currency tumbled against the Pound Sterling in the official market by N30.78 to sell for N1,889.29/£1 compared with the previous day’s N1,858.51/£1, but gained N5.48 against the Euro to finish at N1,583.81/€1, in contrast to Thursday’s rate of N1,589.29/€1.
As for the parallel market, the Nigerian Naira remained stable against the US Dollar during the trading session at N1,650/$1, according to data obtained by Business Post.
In the cryptocurrency market, it was bearish as the US economy added 256,000 jobs last month, the Bureau of Labor Statistics reported on Friday, topping forecasts for 160,000 and up from 212,000 in November (revised from an originally reported 227,000).
However, the readings came after a number of recent economic reports triggered a broad-market pullback across asset classes such as crypto as investors quickly scaled back the idea of a continued series of Federal Reserve rate cuts in 2025.
Cardano (ADA) fell by 3.6 per cent to trade at $0.921, Solana (SOL) slumped by 2.8 per cent to $185.93, Ethereum (ETH) depreciated by 1.4 per cent to $3,233.27, Litecoin (LTC) lost 1.3 per cent to finish at $103.62, Dogecoin (DOGE) shed 0.5 per cent to sell at $0.3315, Bitcoin (BTC), waned by 0.2 per cent to $94,154.43, and Binance Coin (BNB) went south by 0.1 per cent to $693.30.
On the flip side, Ripple (XRP) jumped by 1.5 per cent to settle at $2.34, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.
By Dipo Olowookere
Profit-takers took control of Customs Street on Friday, plunging it by 0.08 per cent at the close of trading activities.
The sell-offs were across all the key sectors of the Nigerian Exchange (NGX) Limited on last trading session of the week.
The insurance space went down by 1.53 per cent, the banking index depreciated by 0.41 per cent, the consumer goods sector weakened by 0.16 per cent, and the energy counter slumped by 0.08 per cent, while the industrial goods sector closed flat.
At the close of business, the All-Share Index (ASI) tumbled by 79.68 points to 105,451.06 points from 105,530.74 points and the market capitalisation retreated by N48 billion to N64.303 trillion from N64.351 trillion.
Yesterday, investors traded 1.5 billion shares worth N19.4 billion in 12,877 deals compared with the 489.5 million shares worth N13.1 billion transacted in 13,010 deals in the preceding day, indicating a decline in the number of deals by 1.02 deals and a rise in the trading volume and value by 203.14 per cent and 48.09 per cent, respectively.
Wema Bank was the busiest stock with 976.2 million units valued at N9.8 billion, Tantalizers traded 53.0 million units worth 129.6 million, Universal Insurance sold 34.8 million units for N26.8 million, Access Holdings exchanged 33.9 million units valued at N843.8 million, and Nigerian Breweries traded 27.3 million units worth N873.3 million.
The heaviest loss was suffered by Sunu Assurances with a decline of 9.99 per cent to trade at N7.30, Eunisell shed 9.96 per cent to N17.35, SAHCO crumbled by 9.87 per cent to N30.15, DAAR Communications plunged by 9.28 per cent to 88 Kobo, and Sovereign Trust Insurance went down by 7.04 per cent to N1.32.
On the flip side, C&I Leasing gained 10.00 per cent to close at N4.51, Honeywell Flour appreciated by 9.99 per cent to N10.02, Trans Nationwide Express jumped by 9.89 per cent to N2.00, RT Briscoe rose by 9.83 per cent to N2.57, and Secure Electronic Technology grew by 9.46 per cent to 81 Kobo.
Business Post reports that the bourse ended with 33 price gainers and 25 price losers, indicating a positive market breadth index and strong investor sentiment.
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