Economy
IMF Projects 2.5% Growth for Nigeria in 2020, 2021
By Adedapo Adesanya
Nigeria’s economy is expected to grow by 2.5 percent this year (2020) and the next (2021), according to the International Monetary Fund (IMF).
The projection was contained in the IMF’s January World Economic Outlook (WEO) titled Tentative Stabilization, Sluggish Recovery, signed by Ms Gita Gopinath, an Economic Counsellor and Director of the Research Department at the Fund, which was released on Monday and covers a two-year time period (2020-2021).
In an earlier report released last year October, there had been projection that the country’s real Gross Domestic Product (GDP) will grow by 2.3 percent in 2019 and 2.5 percent in 2020 as a result of recovery in oil prices and development in agriculture.
It also predicted that inflation is expected to rise in 2020 in the wake of the expected increase in the minimum wage and a higher VAT rate, regardless of the central bank’s effort to sustain a tight monetary policy.
The fund, however, gave a low projection in its growth forecast for the Sub-Saharan African region to 3.5 percent due to constrains and deteriorating public finance in South Africa.
“In sub-Saharan Africa, growth is expected to strengthen to 3.5 percent in 2020–21 (from 3.3 percent in 2019). The projection is 0.1 percentage point lower than in the October WEO for 2020 and 0.2 percentage point weaker for 2021.
“This reflects downward revisions for South Africa (where structural constraints and deteriorating public finances are holding back business confidence and private investment) and for Ethiopia (where public sector consolidation, needed to contain debt vulnerabilities, is expected to weigh on growth),” the global lender said.
Also, the IMF gave a low projection to the global economy to 3.3 percent in 2020, representing a one percentage point decline from 3.4 percent forecast made in October last year.
“Global growth, estimated at 2.9 percent in 2019, is projected to increase to 3.3 percent in 2020 and inch up further to 3.4 percent in 2021. Compared to the October WEO forecast, the estimate for 2019 and the projection for 2020 represent 0.1 percentage point reductions for each year while that for 2021 is 0.2 percentage point lower.
“The global growth trajectory reflects a sharp decline followed by a return closer to historical norms for a group of under-performing and stressed emerging market and developing economies (including Brazil, India, Mexico, Russia, and Turkey).
“The growth profile also relies on relatively healthy emerging market economies maintaining their robust performance even as advanced economies and China continue to slow gradually toward their potential growth rates.
“The effects of substantial monetary easing across advanced and emerging market economies in 2019 are expected to continue working their way through the global economy in 2020. The global growth estimate for 2019 and projection for 2020 would have been 0.5 percentage point lower in each year without this monetary stimulus.”
“The global recovery is projected to be accompanied by a pickup in trade growth (albeit more modest than forecast in October), reflecting a recovery in domestic demand and investment in particular, as well as the fading of some temporary drags in the auto and tech sectors,” the international financial institution said on Monday.
With this projection, it is 0.4 percent higher than 2.1 percent projected by the World Bank for three years: 2020 – 2023 earlier in the year.
By Adedapo Adesanya
Central Securities Clearing System (CSCS) Plc bested three price decliners to lift the NASD Over-the-Counter (OTC) Securities Exchange by 0.05 per cent on Thursday, July 16.
The securities depository company gained N2.29 during the trading day to close at N92.64 per share compared with the previous day’s price of N90.35 per share.
As a result, the market capitalisation of the bourse grew by N1.42 billion to N2.592 trillion from N2.590 trillion, while the NASD Security Index (NSI) improved by 2.36 points to 4,318.87 points from 4,316.51 points.
The three price losers yesterday were led by 11 Plc, which shed N10.00 to end at N240.00 per unit versus Wednesday’s closing value of N250.00 per unit, FrieslandCampina Wamco Nigeria Plc lost N2.34 to finish at N147.66 per share compared with the N150.00 per share it closed at midweek, and Food Concepts Plc depleted by 7 Kobo to settle at N2.42 per unit, in contrast to the preceding day’s N2.49 per unit.
A look at the activity chart showed that during the session, the value of transactions soared by 43.3 per cent to N104.1 million from the preceding session’s N65.2 million, and the number of deals jumped by 39.3 per cent to 39 deals from the 28 deals completed a day earlier, while the volume of trades contracted by 75.7 per cent to 1.2 million units from 4.8 million units.
When trading activities ended for the day, Great Nigeria Insurance (GNI) Plc led the activity chart as the most active stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 74.9 million units exchanged for N5.3 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed 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 Adedapo Adesanya
The Naira further appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, July 16, by 65 Kobo or 0.04 per cent to sell for N1,381.53/$1, in contrast to Wednesday’s closing value of N1,382.18/$1.
This was buoyed by improved FX liquidity to absorb the high demand for Dollars during the trading session.
However, the local currency depreciated against the Pound Sterling in the official market yesterday by N9.48 to close at N1,866.17/£1 versus the preceding day’s N1,856.69/£1, and lost N2.99 against the Euro to quote at N1,582.68/€1 compared with the midweek rate of N1,576.69/€1.
At the parallel market, the Nigerian currency maintained stability against its United States counterpart at N1,405/$1, and at the GTBank FX desk, it remained unchanged at N1,389/$1.
On Thursday, data from the Central Bank of Nigeria (CBN) showed a surge in interbank FX turnover and deal count. Interbank FX activities at the NFEM window increased sharply by 69 per cent to $205.366 million from $121.727 million reported the previous day.
Nigeria’s gross external reserves continue to rise, supported by steady foreign exchange inflows from hydrocarbon receipts, remittances and foreign portfolio investments, boosting market confidence. It settled at $51.893 billion from $51.867 billion the previous day.
The apex bank has also launched a new digital platform that will track every foreign exchange transaction involving Bureau De Change (BDC) operators, marking a major step in its efforts to improve transparency and strengthen oversight of Nigeria’s retail forex market.
In an operational guidance issued on July 15 to authorised dealer banks and licensed BDCs, the CBN introduced the FX BDC Purchase Tracker (FXBT), a centralised electronic portal that will monitor foreign exchange purchases by BDCs from the point of request through approval, settlement and eventual sale.
As for the crypto market, prices were down as the markets weighed fresh US airstrikes on Iran that boosted risk sentiment, with Ethereum (ETH) down by 4.7 per cent to $1,829.37.
Solana (SOL) decreased by 3.6 per cent to $77.49, Dogecoin (DOGE) depreciated by 3.1 per cent to $0.0718, Cardano (ADA) also crashed by 3.1 per cent to $0.1588, Bitcoin (BTC) slumped by 2.9 per cent to $62,820.21, Ripple (XRP) dipped by 2.6 per cent to $1.08, Binance Coin (BNB) fell by 2.3 per cent to $569.02, and TRON (TRX) shrank by 0.8 per cent to $0.3219, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Aduragbemi Omiyale
In a bid to help investors recover about N270 billion in unclaimed dividends in the capital market, a nationwide enlightenment campaign has been launched by the Securities and Exchange Commission (SEC).
This initiative involves town hall meetings that would go around the country to sensitise Nigerians on the need to claim these fallow funds.
The Director General of SEC, Mr Emomotimi Agama, speaking at a town hall meeting in Lagos, said the regulator is not happy that investors, who worked hard to purchase shares in the stock market, have not claimed their profits for many years, making unclaimed dividends pile up.
“The commission considers this situation unacceptable. Funds belonging to investors should ultimately find their way back to their rightful owners,” the SEC chief, represented at the event by the Director of Registration and Exchanges, Market Infrastructure Department, Ms Hafsat Rufai, stated.
He said during this campaign Nigerians would be informed of the unclaimed monies, the role of the National Investor Protection Fund (NIPF), and the procedures for verifying and recovering legitimate claims, stressing that SEC is committed to ensuring that investors’ funds are returned to their rightful owners.
The DG stated that unclaimed monies administered by the NIPF include return funds from public offers, scheme consideration arising from mergers, acquisitions and corporate restructuring transactions, as well as other capital market-related funds that have remained dormant.
He disclosed that the town hall meetings would be held in the six geopolitical zones and the Federal Capital Territory.
In addition, electronic and social media platforms would be used to broaden public awareness on this issue, with efforts to be made to address the transmission of securities following the death of an investor, noting that many families were either unaware that their deceased relatives owned shares or lacked knowledge of the legal and administrative procedures required to transfer such investments to rightful beneficiaries.
“As a result, valuable investments and returns on investments sometimes remain inaccessible for many years, thereby denying beneficiaries the financial benefits intended for them,” he said, urging investors to maintain proper records of their investments and encouraging families to take proactive steps to preserve inherited wealth.
