Economy
Drop in Economic Growth Worries FG
By Dipo Olowookere
Federal government has expressed concerns over the slower growth recorded by the nation’s economy in the second quarter of 2018.
On Monday, the National Bureau of Statistics (NBS) disclosed that the Gross Domestic Product (GDP) grew by 1.50 percent in Q2 2018, lower than the 1.95 percent in the Q1 2018.
Reacting to this, Minister of Budget and National Planning, Mr Udo Udoma, explained that this was mainly due to the contraction in the Crude oil and Gas sectors, which was caused by some production issues already being addressed by Nigerian National Petroleum Corporation (NNPC).
For instance, average crude oil production was only 1.84 million barrels/day in Q2 2018 as opposed to an average production of 2 mil barrels/ day in Q1 2018, expressing confidence that once these issues are addressed, Nigeria should be able to achieve positive growth in the oil and gas sector.
However, the Minister said government is encouraged by the continuing growth recorded in the non-oil sector, which grew by 2.05 percent in the period under review.
This, he noted, was evidence that the implementation of the targeted policies and programs of the Economic Recovery and Growth Plan (ERGP) was yielding positive results.
Mr Udoma said that he is happy to see that the Nigerian economy has continued to register positive growth in the first and second quarters of the year in spite of the security and other challenges faced by the country.
He emphasized that the focus of the Economic Recovery and Growth Plan (ERGP) is on diversifying the economy away from dependence on the oil and gas sector and was encouraged that efforts are yielding fruits by the continuing growth in the non-oil sector..
Mr Udoma noted that the 2.05 percent growth in the non-oil sector represents the strongest growth in the non-oil GDP since the fourth quarter of 2015.
According to the stats office, the non-oil growth was driven by Transportation (road, rail water and air).
Growth in Transportation grew by 21.76 percent, supported by Construction 7.66 percent and Electricity 7.59 percent; the three priority areas of the ERGP.
Other non-oil sectors that drove growth in Q2 2018 included Telecoms which grew by 11.51 percent, Water supply and Sewage 11.98 percent and Broadcasting by 21.92 percent.
However, the Oil and Gas sector contracted by 3.95 percent in Q2 2018 compared with a growth rate of 14.77 percent recorded in Q1 2018 and 3.53 percent in Q1 2017.
The Minister emphasized that the Nigerian economy needs growth from both the oil, as well as the non-oil sectors, to achieve its Economic Recovery and Growth Plan (ERGP) growth targets.
He said another area of concern for government was the slightly weaker growth in the Agriculture sector which slowed to 1.19 percent in the second quarter in 2018 compared with 3 percent in the first quarter of 2018.
This, he said, was partly attributable to security challenges mainly in the north-east and north-central zones of the country.
These security challenge affected activities of farmers with impact on commodity output; but the Minister indicated that the various measures being taken by government to tackle the situation is already reducing incidents of violent conflicts & other disruptions to farming activity.
The Minister said he is happy to see that Industry has continued to maintain a positive growth rate as a result of the performance of Manufacturing and Solid minerals which retained positive growth of 0.68 percent and 5.24 percent respectively in the second quarter of 2018.
Also, the Services sector recorded its best GDP performance in nine quarters, growing by 2.12 percent in the second quarter of 2018 compared to a contraction of 0.47 percent in the first quarter of the year and of -0.85 percent in second quarter of 2017.
Mr Udoma expressed that he was encouraged by these GDP growth results which he said is also consistent with improvements in other indicators including inflation and capital inflows, amongst others.
According to the NBS, headline inflation has consistently declined every month since January 2017 through July 2018 from 18.72 percent to 11.14 percent.
The consecutive disinflation year on year, which is the eighteenth in a row, has resulted in the lowest rate of inflation since June 2016.
He was also happy to note that the Nigerian economy has continued to attract significant capital inflows, which stood at $5.5 billion in the second quarter of 2018, representing a 207.62 percent increase compared to the second quarter of 2017.
While capital importation declined slightly in the second quarter of 2018, the total for the first half of 2018 at $11.8 billion represents the highest half year capital importation since 2014, indicating increasing confidence in the Nigerian economy, he pointed out.
The Minister expressed optimism that as government intensifies its activities in the implementation of the Economic Recovery and Growth Plan, the economy will sustain this growth momentum.
He conceded that, whilst the nation still has some ways to go to achieve the target growth rates of the ERGP, these continuing positive results are signs that the country was moving in the right direction.
Mr Udoma reiterated the commitment of the present administration to turn #Nigeria around to become a productive country where citizens “grow what we eat, consume what we make and use what we produce,” thereby providing jobs for our teeming population.
By Adedapo Adesanya
Four securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 1.95 per cent on Friday, erasing N41.17 billion from the bourse, which had its market capitalisation at N2.567 trillion compared with the previous session’s N2.618 trillion.
In the same vein, the NASD Unlisted Security Index (NSI) decreased at the close of business by 85.28 points to 4,277.07 points from 4,362.32 points.
The price decliners were led by 11 Plc, which gave up N20.50 to sell at N200.50 per share compared with the preceding day’s N221.00 per share, FrieslandCampina Wamco Nigeria Plc dropped N16.94 to close at N155.20 per unit versus Thursday’s closing price of N172.14 per unit, Central Securities Clearing System (CSCS) Plc went down by N2.11 to N84.68 per share from N86.79 per share, and Afriland Properties Plc lost 11 Kobo to end at N16.74 per unit, in contrast to the N16.85 per unit it closed a day earlier.
During the trading day, the value of transactions jumped by 172.1 per cent to N29.9 million from the preceding session’s N10.9 million, and the volume of trades soared by 136.5 per cent to 955,096 units from the previous 403,901 units, while the number of deals went down by 11.4 per cent to 31 deals from 35 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 68.6 million units sold for N4.7 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
By Dipo Olowookere
The last trading session of this week on the floor of the Nigerian Exchange (NGX) Limited ended on a negative note, with a 0.66 per cent loss on Friday.
This was influenced by sustained selling pressure and cautious trading, which forced investors into profit-taking.
Data obtained by Business Post showed that the energy sector fell by 4.66 per cent, the insurance counter dipped by 2.23 per cent, the consumer goods index depreciated by 0.96 per cent, and the banking segment shed 0.28 per cent, while the industrial goods space remained unchanged.
At the close of business, the All-Share Index (ASI) of Nigeria’s stock exchange went down by 1,531.81 points to 232,049.02 points from 233,580.83 points, and the market capitalisation dropped N983 billion to settle at N148.905 trillion compared with Thursday’s N149.888 trillion.
Aradel was the worst-performing equity after it lost 10.00 per cent to close at N1,417.50. International Energy Insurance slipped by 9.95 per cent to N5.79, Trans-Nationwide Express depreciated by 9.89 per cent to N3.28, eTranzact crashed by 9.79 per cent to N14.75, and UPDC slumped by 9.72 per cent to N28.12.
The best-performing equity for the day was Universal Insurance, which gained 6.32 per cent to close at N1.01, McNichols grew by 5.52 per cent to N8.60, Linkage Assurance expanded by 4.67 per cent to N1.57, NGX Group appreciated by 4.35 per cent to N120.00, and Transcorp increased by 3.62 per cent to N41.50.
As look at the activity level indicated that investors traded 388.7 million stocks worth N18.4 billion in 44,631 deals compared with the 393.7 million stocks valued at N19.2 billion executed in 45,813 deals a day earlier, representing a decline in the trading volume, value, and number of deals by 1.27 per cent, 4.17 per cent, and 2.58 per cent, respectively.
By Adedapo Adesanya
The Naira recorded a loss of 82 Kobo or 0.06 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 26, exchanging at N1,380.93/$1, in contrast to the previous day’s rate of N1,380.11/$1.
Equally, the domestic currency further weakened against the Pound Sterling in the official FX market yesterday by N6.06 to settle at N1,824.90/£1 versus the preceding session’s N1,818.84/£1, and lost N10.74 on the Euro to sell at N1,577 .58/€1 versus N1,566.84/€1.
At the GTBank forex counter, the Naira depreciated against the greenback during the session by N4 to close at N1,387/$1, in contrast to Thursday’s value of N1,383/$1, and at the parallel market, it was unchanged at N1,395/$1.
Interbank FX activity among financial institutions has fluctuated amid a sharp slowdown in forex market interventions by the Central Bank of Nigeria (CBN), as it allows demand and supply to move the market.
Also, a stronger greenback has generally put significant pressure on emerging-market currencies.
Nigeria has accessed the first tranche of a proposed $5 billion derivatives financing arrangement with First Abu Dhabi Bank PJSC, the largest lender in the United Arab Emirates (UAE).
The $5 billion facility, approved by the National Assembly earlier this year, is part of the federal government’s plan to diversify external financing sources and reduce borrowing costs. Structured as a Total Return Swap with First Abu Dhabi Bank, proceeds are earmarked for refinancing debt and supporting infrastructure financing.
If the proceeds are brought into the country through the official FX market, the transaction will increase the currency reserves or Dollar liquidity.
At the cryptocurrency market, Solana (SOL) grew by 2.2 per cent to $71.92, Cardano (ADA) gained 1.1 per cent to trade at $0.1474, Ripple (XRP) also appreciated by 1.1 per cent to $1.05, Dogecoin (DOGE) expanded by 0.9 per cent to $0.0755, and Ethereum (ETH) improved by 0.4 per cent to $1,578.84.
On the flip side, TRON (TRX) slid 0.6 per cent to $0.3203, Binance Coin (BNB) slumped by 0.3 per cent to $564.33, and Bitcoin fell by 0.2 per cent to $60,219.37, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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