Economy

Business, Consumer Expectations Improve in Nigeria

Published

8 years ago

17/07/2017

By FSDH Research

The Business Expectations Survey (BES) and the Consumer Expectations Survey (CES) Reports that the Central Bank of Nigeria (CBN) published for Q2, 2017 show that confidence of both the firms and consumers about the Q3, 2017 and the next 12 months has improved.

The BES shows that the respondents’ overall confidence index on the macro-economy in Q2, 2017 was less pessimistic when compared with the level recorded in Q1, 2016.

The major drivers of the improved optimism in Q2, 2017 were services, wholesale/retail trade, industrial and construction sectors. The respondent firms identified the following as major business constraints: insufficient power supply, financial problem, high interest rate, unfavourable economic climate, competition, unclear economic laws, and unfavourable political climate.

Most of the surveyed firms expect the value of the Naira to appreciate against the US Dollar in the next two quarters. The report also shows that businesses with expansion plans are in the following sectors: wholesale/retail trade, services, construction and industrial.

The BES added that respondent firms expect inflation rate and interest rate to moderate in the next two quarters.

The CES shows that the respondents’ overall confidence outlook moderated in Q2, 2017.

According to the survey, some respondents attributed the improved outlook to the increased confidence in the economy. Despite the improved confidence the overall outlook was negative, majority of the respondents ascribed this development to a decline in their net income leading to draw-down on savings/getting into debt.

The consumer outlook for the next quarter and that of the next 12 months were positive. The outlook is attributed to the anticipated improvement in the Nigerian economic conditions, expected increase in net household income and expectation to save in the next 12 months.

On the expectation of consumer expenditure, the survey says more households across the country expect some increase in their expenditure on basic commodities and services in the next 12 months. Most consumers expect to spend a substantial amount of their income on food and other household needs, education, savings, purchase of consumer durables, medical expenses and investment.

Nevertheless, they do not plan to spend on large ticket items such as purchase of car/motor vehicle and house.

Most surveyed consumers expect the prices of goods and services to increase in the next 12 months. The major drivers are: house rent, education, medical care, transport and electricity. On the consumer buying outlook, consumers believe Q2, 2017 was not the ideal time to buy consumer durables like motor vehicle and house.

It also added that the next 12 months are not the best time to buy items such as furniture, gas cooker, refrigerator, air conditioners, television and other durables. However the next 12 months seem to be an ideal time to buy big-ticket items like motor vehicles and house.

Although consumers expect inflation rate to rise in the next 12 months, they expect exchange rate to appreciate and interest rate (borrowing rate) to drop.

We note that there are still some challenges in the economy that need to be addressed.

However, our review of the Nigerian economy shows that the worst performance may be over. Thus the economy is ready for a recovery. We are of the view that inflation rate will decline for the rest of the year 2017 (but still in double digits).

We also expect the Monetary Policy Committee (MPC) of the CBN to adopt a more accommodating monetary policy stance when there is sustainable stability in the foreign exchange rate and inflation expectation is properly anchored within the level that is not growth retarding. Such a change in the monetary policy stance will lead to a drop in the interest rates (both deposit and lending) and yields on the fixed income securities.

The Federal Government of Nigeria (FGN) needs to address the challenges in the power sector in order to reduce firms’ operating cost and increase the spendable and investible income of consumers. Other areas that need attention in order to improve business and consumer confidence are the political and policy uncertainties in the country.

Economy

FG Offers 18% Interest on Savings Bonds

Published

6 hours ago

14/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The federal government is offering two new savings bonds with interest rates between 17 and 18 per cent through the Debt Management Office (DMO).

In a statement by the agency, the country said retail investors can purchase the two-year bond maturing in January 2027 at 17.23 per cent interest, while the three-year paper maturing in January 2028 at a coupon rate of 18.23 per cent.

Bonds are very safe financial instrument that serve as investments because they are backed by the federal government, which promises to pay back the money.

According to the DMO, people can buy these bonds starting January 13, 2025, until January 17, 2025, with allotment expected on January 22, 2025, and the interest to be paid to investors every three months – in April, July, October, and January.

These bonds have some special features. They are tax-free under both company and personal tax laws.

Big investors like pension funds and trustees are allowed to buy them and each bond costs N1,000 each.

However, interested investor can only buy at least N5,000 worth, and can’t buy more than N50 million.

This comes after the Ms Patience Oniha-led debt office said the Nigerian government was offering three bonds worth N150 billion in September 2024.

Economy

Reps Express Readiness to Pass Tax Reform Bills

Published

7 hours ago

14/01/2025

Aduragbemi Omiyale

By Aduragbemi Omiyale

The House of Representatives has said it would make efforts to pass the controversial tax reform bills forwarded to the National Assembly by President Bola Tinubu last year.

Mr Tinubu, in a bid to improve revenue of the government, asked the parliament to pass the bills, but this has been resisted mostly by northern lawmakers and others.

At the resumption of plenary session on Tuesday in Abuja, the Speaker of the House of Representatives, Mr Abbas Tajudeen, assured that the green chamber of the legislative arm of government would prioritise the tax reform bills.

“The legislative agenda of the House for 2025 prioritises the passage of the Appropriation Bill and the Tax Reform Bills, both of which are pivotal to economic recovery and fiscal stability.

“These reforms are essential for broadening the tax base, improving compliance and reducing dependency on external borrowing.

“The House will ensure that these reforms are equitable and considerate of the needs of all Nigerians, particularly the most vulnerable,” Mr Abbas said through the Deputy Speaker, Mr Ben Kalu, who presided over the session.

He also expressed grief over the loss of lives in stampedes in Ibadan, Abuja and Anambra State last month due to hardship in the country.

Several Nigerians died in the stampedes while trying to receive palliatives given to alleviate their sufferings.

“Tragic events, such as the stampedes in Ibadan, Abuja and Okija, during the distribution of palliative aid, underline the urgent need for improved planning and safety protocols in humanitarian efforts. On behalf of the House, I extend our deepest sympathies to the families and communities affected.

“These incidents serve as a stark reminder of the socio-economic hardships facing our citizens and the imperative for policies that tackle hunger and poverty at their roots.

“Turning to the economy, 2024 presented both difficulties and opportunities. While inflation remains a pressing concern, progress in GDP growth and the positive trajectory of economic reforms provide hope for a more stable and prosperous 2025,” the Speaker said.

Economy

NASD Index Appreciates 0.69% to 3,095.00 Points

Published

15 hours ago

14/01/2025

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.69 per cent appreciation on Monday, January 13, as investors showed renewed interests in unlisted securities.

During the trading session, the NASD Unlisted Security Index (NSI) increased by 21.07 points to wrap the session at 3,095.00 points compared with the 3,073.93 points recorded in the previous session.

In the same vein, the value of the local alternative stock exchange went up by N7.22 billion to close at N1.061 trillion compared with last Friday’s N1.051 trillion.

Yesterday, FrieslandCampina Wamco Nigeria Plc recorded a growth of N3.78 to close at N42.00 per share versus N38.22 per share, Mixta Real Estate Plc improved by 20 Kobo to end at N2.35 per unit versus the preceding closing rate of N2.15 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to finish at 25 Kobo per share compared with the previous session’s 24 Kobo per share.

Conversely, Geo-Fluids Plc lost 29 Kobo to quote at N4.56 per unit compared with the preceding day’s N4.85 per unit, and Afriland Properties Plc slid by 75 kobo to end the session at N15.50 per share versus the preceding closing rate of N16.25 per share.

During the session, the volume of securities traded decreased by 27.2 per cent to 3.1 million units from 4.3 million units, the value of securities slumped by 81.5 per cent to N3.2 million from N17.2 million, and the number of deals expanded by 57.9 per cent to 30 deals from 19 deals.

At the close of trades, 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 IGI Plc with 10.7 million units sold for N2.1 million.

Also, IGI Plc remained the most traded 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.