Economy
IMF: Nigeria’s Economy Still Vulnerable, Predicts 2.1% Growth in 2018
By Dipo Olowookere
Despite getting out of recession in the second quarter of this year, the Nigerian economy still remains vulnerable, the International Monetary Fund (IMF) has disclosed.
From December 6 to 20, 2017, an IMF staff team led by Mr Amine Mati, Senior Resident Representative and Mission Chief for Nigeria, visited the country to conduct the 2018 Article IV consultation.
During the visit, the team held discussions with senior government and central bank officials. It also met with members of parliament, representatives of the banking system, private sector, civil society, and international development partners.
After the visit, Mr Mati observed that, “Overall growth is slowly picking up but recovery remains challenging. Economic activity expanded by 1.4 percent year-on-year in the third quarter of 2017—the second consecutive quarter of positive growth after five quarters of recession—driven by recovering oil production and agriculture.
“However, growth in the non-oil-non-agricultural sector (representing about 65 percent of the economy), contracted in the first three quarters of 2017 relative to the same period last year.”
According to Mr Mati, “Difficulties in accessing financing and high inflation continued to weigh on companies’ performance and consumer demand.
“Headline inflation declined to 15.9 percent by end-November, from 18½ percent at end-2016, but remains sticky despite tight liquidity conditions.
“High fiscal deficits—driven by weak revenue mobilization—generated large financing needs, which, when combined with tight monetary policy necessary to reduce inflationary pressures, increased pressure on bond yields and crowded out private sector credit. These factors contributed to raising the ratio of interest payments to federal government revenue to unsustainable levels.
“Reflecting the low growth environment and exposure to the oil and gas sector, the banking industry’s solvency ratios have declined from almost 15 to 10.5 percent between December 2016 and October 2017, and non-performing loans have increased from 5 percent in June 2015 to 15 percent as of October 2017, although with provisioning coverage of about 82 percent.
“The authorities have begun addressing macroeconomic imbalances and structural impediments through the implementation of policies underpinning the Economic Recovery and Growth Plan (ERGP).
“Supported by recovering oil prices, the new Investor and Exporter foreign exchange window has increased investor confidence and provided impetus to portfolio inflows, which have helped to increase external buffers to a four-year high, and contributed to reducing the parallel market premium.
“Important actions under the Power Sector Recovery Program increased power supply generation and ensured government agencies pay their electricity bills. Welcome steps were also taken to improve the business environment and to address longstanding corruption issues, including through the adoption of the National Anti-Corruption Strategy in August 2017.
“However, in the absence of new policies, the near-term outlook remains challenging. Growth is expected to continue to pick up in 2018 to 2.1 percent, helped by the full year impact of greater availability of foreign exchange and higher oil production, but to stay relatively flat in the medium term. Risks to the outlook include lower oil prices, tighter external market conditions, heightened security issues, and delayed policy responses.
“Containing vulnerabilities and achieving growth rates that can make a significant dent in reducing poverty and unemployment requires a comprehensive set of policy measures.”
“On the fiscal front, the mission welcomes the recent tax reforms aimed at improving tax administration, planned increases in excises, and latest steps taken to lower debt servicing costs and lengthen maturities.
“However, with oil prices expected to remain lower than in the past, upfront actions to mobilize non-oil revenues, including through reforming the VAT and removing exemptions, are needed while safeguarding priority expenditures, including scaling up social safety nets and infrastructure investment.”
“Fiscal consolidation should be accompanied by a monetary policy stance that remains tight to further reduce inflation and anchor inflation expectations. Moving toward a unified and market-based exchange rate as soon as possible while continuing to strengthen external buffers would be necessary to increase confidence and reduce potential risks from capital flow reversals.”
“Such a policy package—along with structural reform implementation, including by building on recent successes to improve the business environment, closing infrastructure gaps, and implementing the power sector reform plan——would lay the foundation for a diversified private-sector led economy. Strengthening governance and transparency initiatives, and lowering gender inequality and fostering financial inclusion would also be important.”
By Adedapo Adesanya
The Central Securities Clearing System (CSCS) Plc has declared the first interim dividend in its history after posting its financial results for the first half of 2026, reflecting robust earnings growth, improved operating efficiency and stronger capital market activity.
The board approved an interim dividend of N1.00 per ordinary share for the six months ended June 30, 2026, citing the company’s strong cash generation, resilient balance sheet and confidence in the sustainability of its earnings.
The interim payout represents about 56 per cent of the total dividend of N1.78 per share paid for the 2025 financial year, underscoring its strong earnings momentum while preserving financial flexibility to invest in technology, innovation and future growth.
CSCS recorded one of the strongest financial performances in its history during the review period, with total operating income rising by 92 per cent to N18.51 billion from the corresponding period of 2025.
The growth was driven by higher transaction fee income as capital market activity strengthened, continued expansion in depository services, increased collateral management revenues and stronger contributions from data and technology-enabled services. Investment income also improved as the company optimised its investment portfolio.
Despite the sharp rise in revenue, operating expenses increased by only 38 per cent, reflecting disciplined cost management and the scalability of the company’s business model.
As a result, operating profit surged by 186 per cent to N10.11 billion, while profit before tax climbed by 115 per cent to N13.21 billion. Earnings per share also rose significantly to 190.1 kobo from 109.1 kobo in the corresponding period of 2025.
The organisation also recorded improvements in operating efficiency. Its cost-to-income ratio declined to 45.4 per cent from 63.2 per cent a year earlier, while operating profit margin improved to 54.6 per cent from 36.8 per cent.
According to the company, the results demonstrate not only the benefits of stronger market activity but also the resilience of its operating model and its ability to convert revenue growth into higher profitability, improved shareholder returns and sustainable long-term value creation.
Commenting on the interim dividend, the Chairman of CSCS Plc, Mr Temi Popoola, said the board’s decision reflected confidence in the firm’s financial strength, earnings quality and long-term strategic direction.
He said the strong performance was driven not only by increased market activity but also by sustained improvements in operational efficiency, disciplined cost management and the continued diversification of revenue streams.
Mr Popoola noted that the Board remained committed to balancing shareholder returns with investments in technology, innovation, resilience and new growth opportunities that would strengthen CSCS’ position as Nigeria’s leading financial market infrastructure and one of Africa’s foremost post-trade institutions.
The chief executive of CSCS Plc, Mr Shehu Yahaya Shantali, attributed the strong performance to the resilience of the entity’s business model, the dedication of its workforce and the confidence of market participants.
He said the first-ever interim dividend demonstrated the company’s ability to translate strong earnings growth and improved operating efficiency into enhanced shareholder value.
Mr Shantali added that CSCS would continue to strengthen its core market infrastructure, invest in technology and innovation, diversify its revenue base and enhance value creation for stakeholders while supporting the development of Nigeria’s capital market.
By Aduragbemi Omiyale
The national scale long-term issuer rating of Axxela Limited has been upgraded by GCR Rating to A+(NG), just as its short-term issuer rating was affirmed with a stable outlook.
The rating firm upgraded the long-term issue rating for Axxela Funding 1 Plc’s N16.4 billion series 1 senior unsecured bond to A+(NG), while the N11.5 billion series 1 senior secured bond was lifted to A+(NG)(EL).
GCR noted in a note that the actions reflect the leading gas and power portfolio company’s robust business model, strong earnings performance, and sustained financial profile, reinforcing its ability to deliver long-term value while maintaining financial discipline.
Axxela’s recent achievements have been driven by its continued focus on responsible growth, customer satisfaction, and creating lasting value for national development.
“The ratings upgrade by GCR is a strong endorsement of Axxela’s disciplined approach to business. Beyond recognising our financial strength, it reflects the resilience of our business model and the confidence in our strategic direction.
“Over the past few years, we have continued to make significant strides across the business by expanding our natural gas infrastructure, strengthening our operational footprint, advancing our sustainability agenda, and maintaining an unwavering commitment to operational excellence and safety,” the chief executive of Axxela, Mr Moshood Olajide, commented on the development.
As the company continues to advance its long-term growth strategy, the upgraded ratings reinforce confidence in Axxela’s credit profile, financial resilience, and ability to create enduring value for investors, customers and other stakeholders.
By Adedapo Adesanya
The Ministry of Solid Minerals Development and the National Identity Management Commission (NIMC) have strengthened their partnership to deploy digital identity technology, aiming to combat illegal mining and enhance security in Nigeria’s mining sector.
Speaking while receiving the Director-General and management of NIMC on a courtesy visit to his office in Abuja, the Minister of Solid Minerals Development, Mr Dele Alake, described the commission as a critical institution in Nigeria’s development architecture, stressing that effective governance could not be achieved without a credible identity management system.
“NIMC occupies a critical position in translating policy into reality. It is pivotal to the development of any nation because governance today is driven by data, technology and credible identity systems,” he added.
He noted that inadequate identification systems had weakened enforcement efforts over the years, allowing illegal mining activities to flourish in mineral-rich communities.
“Without identification, we cannot trace or track, and insecurity will flourish. In the solid minerals sector, we need effective monitoring of both legal and illegal operations.
“A credible identity ecosystem will strengthen regulation, improve enforcement and support our efforts to sanitise the sector,” Mr Alake said.
The minister identified technology, statistics, data gathering and digital identity as critical enablers for evidence-based policymaking, improved regulatory oversight, efficient licensing, investment promotion and national development.
On her part, the DG of NIMC, Mrs Abisoye Coker-Odusote, highlighted several opportunities for collaboration between both institutions, noting that the newly enacted NIMC Act has positioned Nigeria to fully embrace a digital governance ecosystem.
She explained that deeper integration of identity management into the solid minerals sector would facilitate database integration across government institutions, enhance regulatory compliance, strengthen security and law enforcement, improve monitoring of operators, and provide stronger support for the implementation of Community Development Agreements (CDAs) in mining host communities.
Mrs Coker-Odusote added that NIMC’s upgraded digital infrastructure is capable of supporting government institutions in building reliable databases, improving transparency and delivering more efficient public services.
Both institutions said they would immediately begin implementing technology-driven initiatives under the partnership, expressing confidence that expanding access to trusted digital identities for miners and other eligible residents would enhance accountability and strengthen governance in the solid minerals sector.
