Economy

Border Closure to Push Inflation to 11.32%—Analysts

Published

6 years ago

13/11/2019

By Dipo Olowookere

Analysts at Meristem Research have projected that inflation rate in Nigeria for the month of October 2019 will increase to 11.32 percent from 11.24 percent recorded in September, indicating a year-on-year 0.08 percent rise.

The firm said one of the major factors to cause this increase in inflation rate is the closure of land borders since August 2019, which has caused prices of food items to significantly moved up.

In its inflation report, Meristem Research noted that decline in prices of food items in August 2019 was caused by the harvest season, but things changed when federal government closed the country’s borders, which had impact on commodity prices, triggering a 0.22 percent uptick in inflation in September.

“Data from our most recent survey of commodity and food prices suggests a significant expansion in the prices of staples such as rice, poultry and oil in October.

“Just before announcement of the border closure in August, a 50kg bag of rice retailed for c.N12,000. As the full effect of the closure set in, prices surged by between 75.00 percent and 100.00 percent to N21,000 and NGN24,000 per bag,” the report said.

Continuing, it said, “Poultry products (chicken and turkey) and oils have also recorded average price expansions of 33.00 percent and 17.00 percent respectively over the same period.

“Combined, these items formed the strongest inflationary pressure points, as prices of other local staples remained relatively stable.”

Analysts at Meristem Research said the Purchasing Manager’s Index (PMI) of the Central Bank of Nigeria (CBN) also supports the view that inflationary pressures are building as the index for last month rose from 57.7 in September to 58.2.

“We envisage that the imminent upward review in energy tariffs and extension of the border closure period to January 31, 2020 should sustain pressure on the CPI in the near term,” it said.

On the global scene, the Food Price Index of the Food and Agriculture Organization of the United Nations ticked up by 5.97 percent year-on-year in October for the third consecutive month largely due to higher meat (+13.87 percent), dairy (+5.58 percent) and oils (+2.64%) prices.

“While this should ordinarily portend intensified inflationary pressures, owing to Nigeria’s large food import bill, the closure of the country’s land borders has emerged as the major upside risk to inflation,” the report said.

Concluding, Meristem Research said, “Following our evaluation of primary inflationary triggers in the economy, we forecast that headline inflation will tick up by 0.08 percent YoY, to 11.32 percent for October 2019.”

Economy

Nigeria’s 3.5 billion Oil Barrels, 18.8 trillion Cubic Feet Gas Untapped—NUPRC

Published

8 hours ago

20/08/2025

Adedapo Adesanya

By Adedapo Adesanya

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed that over 3.5 billion barrels of oil and condensate reserves are locked in undeveloped fields across different basins in Nigeria.

The commission disclosed this in a new report, adding that 18.8 trillion cubic feet of associated and non-associated gas reserves were still locked under the ground.

According to the report, the development status of deepwater oil and gas fields revealed a significant untapped potential in the sector.

The report showed that 31.65 per cent of these fields remain undeveloped, marking the largest category.

This figure underscores the vast reserves that are yet to be harnessed, potentially impacting the government’s financial capacity and forcing the country to borrow more.

In contrast, only a paltry 12.25 per cent of the deepwater oil and gas fields are currently classified as developed fields, indicating that operational sites constitute a moderate portion of the total allocated fields. This suggests that while some progress has been made in bringing these resources online, the majority of the industry’s focus may still be on planning and initial stages rather than full-scale production.

Meanwhile, 5.10 per cent represents fields where development is in view, indicating that there are limited projects in the pipeline at this time.

The development status of the deep offshore oil and condensate reserves showed that 1.7 billion barrels are in developed fields, representing 25 per cent; 1.5 billion barrels (23 per cent) are in fields tagged ‘development in view’, while 52 per cent are in undeveloped fields.

It was reported that as of January 1, 2025, the deepwater terrain contributed approximately 19 per cent and 12 per cent of oil and gas reserves in Nigeria. 65 per cent of the discovered fields are undeveloped, while only 10 per cent of the discovered fields are developed. 25 per cent of deep offshore reserves have ‘development in view’.

“This implies that over 3,500 MMB of oil and condensate reserves and 18.8 TCF of non-associated gas and associated gas reserves are locked in undeveloped fields,” the report said.

It was also stated that development gas reserves were just 4.7 TCF, while 877 billion cubic feet of gas reserves are currently undergoing development processes.

These current figures are in fields that have been identified but left fallow.

The NUPRC said Nigeria’s oil reserves stood at 37.28 billion barrels, while gas reserves hit 210.54 TCF.

It was also reported that there are 220 unlicensed oil blocks scattered in different onshore and offshore basins across the country.

Recall that the federal government recently lamented the state of unutilised and idle fields, with the Minister of Petroleum Resources (Oil) urging companies to loan them to more capable operators of risk losing them.

Economy

Gains in Okitipupa, CSCS Push NASD Bourse Higher by 1.11%

Published

17 hours ago

20/08/2025

Adedapo Adesanya

By Adedapo Adesanya

The duo of Okitipupa Plc and Central Securities Clearing System (CSCS) Plc spurred the NASD Over-the-Counter (OTC) Securities Exchange to a 1.11 per cent growth on Tuesday, August 19.

During the session, Okitipupa Plc gained N16.80 to trade at N239.50 per unit versus N227.70 per unit, and CSCS Plc appreciated by N3.20 to close at N48.20 per share compared with the previous day’s N45.00 per share.

However, the price of Industrial and General Insurance (IGI) Plc depreciated by 3 Kobo yesterday to 56 Kobo per unit from the previous session’s 59 Kobo per unit.

At the close of business, the market capitalisation chalked up N23.94 million on Tuesday to quote at N2.171 trillion compared with the preceding day’s N2.147 trillion and the NASD Unlisted Security Index (NSI) increased by 40.00 points to 3,629.09 points from Monday’s 3,589.09 points.

Data showed that the volume of securities contracted by 80.5 per cent to 11.04 million units from 56.7 million units, the value of securities decreased by 56.3 per cent to N77.1 million from N176.3 million, and the number of deals dipped by 54.6 per cent to 15 deals from 33 deals.

Okitipupa Plc ended the day as the most active stock by value on a year-to-date basis with 158.7 million units transacted for N5.9 billion, followed by Air Liquide Plc with 507.2 million units worth N4.2 billion, and FrieslandCampina Wamco Nigeria Plc with 44.0 million units valued at N1.9 billion.

Also, IGI Plc maintained its position as the most traded stock by volume on a year-to-date basis with 1.2 billion units worth N402.1 million, trailed by Impresit Bakolori Plc with 536.9 million units sold for N524.8 million, and Air Liquide Plc with 507.2 million units valued at N4.2 billion.

Economy

Naira Crashes to N1,534/$1 at NAFEM, Firms to N1,545/$1 at Black Market

Published

17 hours ago

20/08/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira moved in different directions at the foreign exchange (FX) market on Tuesday as the Central Bank of Nigeria (CBN) has held back its direct interventions aimed to defend the local currency.

Yesterday, the Nigerian Naira appreciated against the United States Dollar in the black market by N5 to quote at N1,545/$1, in contrast to Monday’s exchange rate of N1,550/$1.

But, at the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, the domestic currency depreciated against the greenback by N1.16 or 0.08 per cent to close at N1,534.93/$1 compared with the preceding day’s N1,533.77/$1.

However, the Naira appreciated against the Pound Sterling in the official market by N3.20 to close at N2,073.69/£1 versus the preceding session’s N2,076.89/£1 and declined by 68 Kobo to finish at N1,792.04/€1 versus N1,791.36/€1.

According to market analysts, the decision of the CBN to halt its forex sales to authorised dealers is likely because the Nigerian currency is trading within the expected range.

Updated data showed that the gross balance in the nation’s external reserves climbed to $40.962 billion on Monday.

As for the cryptocurrency market, profit-taking plunged the landscape into chaos as investors are turning cautious that the US Federal Reserve Chairman Jerome Powell’s speech set for Friday at Jackson Hold may come with a hawkish surprise.

Investors, who previously expected a September interest rate cut by the Federal Reserve, are now weighing the odds that Mr Powell might argue for holding rates steady during his Friday keynote address at the central bank’s Economic Symposium in Kansas City.

Despite recent signs of a weakening job market and slowing economy, last week’s PPI report reignited concerns of inflation reaccelerating in the US.

Cardano (ADA) slumped by 7.6 per cent to $0.8522, Ripple (XRP) declined by 3.8 per cent to $2.89, Litecoin (LTC) fell by 2.1 per cent to $114.23, Dogecoin (DOGE) slid by 1.8 per cent to $0.2132, Binance Coin (BNB) dropped 1.2 per cent to sell for $834.25, Ethereum (ETH) went down by 1.2 per cent to $4,183.29, and Bitcoin (BTC) depreciated by 1.1 per cent to $113,703.16.

However, Solana (SOL) appreciated by 0.6 per cent to $181.05, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.