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Economy

IMF Forecasts Nigeria’s Inflation Cooling to 25% in 2025

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inflation rate

By Adedapo Adesanya

The International Monetary Fund (IMF) expects Nigeria’s inflation to steady at 25 per cent in 2025 and moderate to 14 per cent by 2029.

Inflation in Nigeria slightly moved up to 32.70 per cent in September 2024, far beyond the 21.4 per cent target pursued by the Central Bank of Nigeria (CBN).

The country’s inflation hit a 28-year high of 34.19 per cent in June 2024 but cooled to 33.40 per cent in July and extended this slowing to 32.15 per cent in July before rising to the current 32.70 per cent last month.

In its recently published World Economic Outlook (WEO), the Bretton Wood institution noted that Nigeria’s economy has grown in the last two quarters in Nigeria by over 2-3 per cent caused by inflation and the weakening of the local currency.

“Nigeria’s economy in the first and second quarter of the year grew by 2.98 per cent and 3.19 per cent, respectively amid a surge in inflation and further depreciation of the Naira.

“The GDP growth rate in the first two quarters of 2024 surpassed the figure for 2023, representing resilience despite severe macroeconomic shocks with a spike in petrol prices and a 28-year high inflation rate.

“Nigeria’s inflation rate only began to slow down in July 2024 after 19 months of consistent increase dating back to January 2023.

“However, after two months of slowdown hiatus, inflation continued to rise on the back of an increase in petrol prices by the NNPCL in September,” the report said.

Business Post had reported that Nigeria’s gross domestic product (GDP) growth prospects for 2024 was put at 2.9 per cent from 3.3 per cent for 2024 and 2025 respectively.

The IMF blamed the downgrade, particularly on the effects of recent inflation, flooding and oil production setbacks.

Speaking on the downgrade from a year ago, the spokesperson for IMF’s Research Department, Mr Jean-Marc Natal, said agricultural disruptions caused by severe flooding and security and maintenance issues hampering oil production were key drivers of the revision.

“There has been, over the last year and a half, some progress in the region. You saw, inflation stabilising in some countries, going down even and reaching a level close to the target. So, half of them are still at a large distance from the target, and a third of them are still having double-digit inflation.

“In terms of growth, it’s quite uneven, but it remains too low. The other issue is that in the region it is still high. It has stopped increasing, and in some countries already starting to consolidate, but it’s still too high, and the debt service is, correspondingly, still high in the region,” he said.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

Economy

FrieslandCampina Sinks Unlisted Securities Exchange by 0.20%

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unlisted securities exchange

By Adedapo Adesanya

FrieslandCampina Wamco Nigeria Plc pulled down the NASD Over-the-Counter (OTC) Securities Exchange by 0.20 per cent fall on Thursday, December 5.

The bourse, as a result, lost N2.14 billion as the market capitalisation wrapped the session at N1.056 trillion compared with the N1.058 trillion it closed in the preceding session.

Equally, the NASD Unlisted Security Index (NSI) dropped 6.13 points to settle for the session at 3,013.41 points compared with 3,019.54 points recorded on Wednesday.

During the trading day, the price of FrieslandCampina Wamco Nigeria Plc went down by N1.10 to trade at N40.36 per share versus the N41.46 per share it ended at midweek.

Yesterday, the volume of shares bought and sold by the market participants significantly decreased by 99.9 per cent to 74,381 units from the 127.5 million units traded in the preceding session.

In the same vein, the value of securities transacted by investors on Thursday shrank by 95.4 per cent to N2.7 million from N58.2 million, as the number of deals depreciated by 75 per cent to five deals from the 20 deals recorded a day earlier.

Geo-Fluids Plc remained the most traded stock by volume (year-to-date) with 1.7 billion units valued at N3.9 billion, Okitipupa Plc came next with 752.2 million units sold for N7.8 billion, and Afriland Properties Plc was in third place after trading 297.3 million units worth N5.3 million.

Despite its exit from the trading platform, Aradel Holdings Plc remained the most traded stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 billion.

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Economy

Naira Appreciates to N1,567/$1 at Official Market

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Official FX Market

By Adedapo Adesanya

Data obtained from the Central Bank of Nigeria (CBN) has shown that the Naira appreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, December 5 by N46.69 or 2.9 per cent to settle at N1,567.00/$1 compared with the preceding day’s N1,613.69/$1.

The value of the local currency has been improving since the CBN-backed Electronic Foreign Exchange Matching System (EFEMS), which sets new guidelines for authorised Foreign Exchange (FX) dealers, became effective this month, boosting operational efficiency and transparency of the nation’s FX market commenced operation.

Since dealers are tasked with conducting due diligence, providing transparent pricing and offering market access through digital solutions, this has eliminated unnecessary pricing of the exchange rate.

The system offers spot-matching functionality to the interbank community for the US Dollar against other currencies. It allows anonymous orders to be placed into a central limit order book, which is displayed and matched with counterparty orders based on mutual trading limits and other parameters configured by each bank.

Yesterday, the domestic currency closed flat against the Pound Sterling and the Euro in the spot market at N2,044.86/£1 and N1,691.31/€1, respectively.

Similarly, the value of the Nigerian currency remained unchanged against the US Dollar in the black market during the trading session at N1,705/$1.

In the cryptocurrency market, Bitcoin’s (BTC) price plunged by 3.7 per cent to $98,006.76 on Thursday after its rapid retreat from its new all-time high of around $100,000 a day earlier.

On Wednesday, it had surged past the $100,000 mark for the first time in its history, fueled by institutional demand, corporate accumulation, and heightened expectations of crypto-friendly policies under Mr Donald Trump’s presidency, which commences next month.

Also, Dogecoin (DOGE) fell by 0.5 per cent to sell at $0.4377 and Cardano (ADA) slid by 0.04 per cent to trade at $1.19.

However, Litecoin (LTC) gained 7.9 per cent to quote at $136.60, Solana (SOL) added 2.8 per cent to settle at $239.40, Ripple (XRP) increased by 2.5 per cent to $2.36, Ethereum (ETH) rose by 2.3 per cent to $3,913.11, and Binance Coin (BNB) climbed higher by 1.1 per cent to $729.50, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.

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Economy

Customs Street Succumbs to Bears, Sheds 0.06%

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Customs Street Nigerian Stock Exchange

By Dipo Olowookere

The bears resurfaced at Customs Street on Thursday, pulling down the market by a marginal 0.06 per cent at the close of trading activities.

The loss recorded by the Nigerian Exchange (NGX) Limited was due to profit-taking in the banking and industrial goods sectors, which closed lower by 0.26 per cent and 0.24 per cent, respectively.

This happened despite the sterling performances put up by the other sectors, as the insurance index gained 3.13 per cent, the energy counter improved by 1.13 per cent, and the consumer goods space rose by 0.02 per cent.

When the bourse ended for the day, the All-Share Index (ASI) was down by 60.88 points to 98,114.11 points from 98,174.99 points, and the market capitalisation decreased by N36 billion to settle at N59.476 trillion compared with the previous day’s N59.512 trillion.

The worst-performing equity yesterday was Red Star Express, which lost 10.00 per cent to close at N4.41, FTN Cocoa depreciated by 5.61 per cent to N1.85, NPF Microfinance Bank declined by 3.23 per cent to N1.50, Neimeth slipped by 2.78 per cent to N2.10, and Prestige Assurance tumbled by 2.50 per cent to 78 Kobo.

The best-performing equities were University Press and Cornerstone Insurance, which improved by 10.00 per cent each to trade at N3.96 and N3.30, respectively, Sterling Holdings gained 9.98 per cent to finish at N4.85, Sunu Assurances appreciated by 9.98 per cent to N4.63, and Golden Guinea Breweries expanded by 9.84 per cent to N4.91.

Business Post reports that despite the poor outcome, investor sentiment was bullish as the NGX finished with 35 price gainers and 16 price losers, representing a positive market breadth index.

Champion Breweries was the busiest stock on Thursday with a turnover of 300.9 million units worth N1.2 billion, Fidelity Bank transacted 48.6 million units valued at N783.0 million, GTCO traded 40.2 million units for N2.1 billion, Access Holdings exchanged 35.6 million units valued at N858.9 million, and Lafarge Africa sold 29.1 million units worth N2.1 billion.

At the close of business, the trading volume increased by 38.53 per cent, the trading value went down by 35.68 per cent, and the number of deals went down by 9.82 per cent.

This was because investors transacted 723.0 million shares valued at N12.8 billion in 8,495 deals compared with the 521.9 million shares worth N19.9 billion in 9,420 deals.

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