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NESG Tasks FG to Initiate Critical Reforms to Accelerate Growth



#NES22 2016 NESG

By Adedapo Adesanya

The Nigeria Economic Summit Group (NESG) has charged the federal government to achieve a paradigm shift in governance and policy design to sustain and accelerate economic growth in 2022.

The think-tank group made the suggestion in its Macroeconomic Outlook for 2022, hammering that the year presents opportunities to initiate critical reforms to achieve the shift.

Mr Laoye Jaiyeola, Chief Executive Officer of the NESG, warned that failure by the central government to initiate critical reforms could exacerbate challenges that the country encountered in 2021.

“In the NESG Macroeconomic Outlook for 2022, we highlight the need for reforms that will sustain the recovery of output and ensure improved social inclusion in Nigeria.

“We believe that the role of government is to ensure that reforms translate to a friendly business environment and better welfare conditions for households,” he said.

He also said Nigeria was rapidly consolidating its recovery from the effect of the COVID-19 pandemic, noting, however, that the recovery had not been all-inclusive.

“Pre-COVID-19 narrative of poor inclusiveness and macroeconomic instability still persists.

“In spite of a GDP growth of 3.2 per cent in the first three quarters of 2021, data from the National Bureau of Statistics show that average prices of goods and services were high.

“Trade balance remained in deficit and foreign investment inflow was constrained.

“The World Bank estimated that an additional eight million Nigerians fell into poverty between 2020 and 2021 due to lower purchasing power,” he added.

The NESG boss also said although Nigeria had enormous potential, job creation across sectors was lagging, resulting in an increase in unemployed individuals.

“While there is considerable improvement in some areas, such as the mobilisation of non-oil revenue in the last few years, one thing is clear: Nigeria cannot afford to continue with its business-as-usual approach in policymaking and execution,” he stressed.

He added that widespread insecurity across the country emphasised the need for policy formulation and implementation that impacted all strata of society.

“The heightened insecurity and social vices in several parts of the country is proof that when some segments of the population are left behind, it will offset the few gains made prior to COVID-19.

“It will also deprive the country of much-needed investments that would ensure sustainable growth and development,” he noted.

According to Mr Jaiyeola, the challenges associated with insecurity, rising prices, unemployment, and lower investments intensified the need for reforms that will lead the country to substantial economic progress and improved social inclusion.

He added that such reforms would ensure that businesses and citizens constituted the core of the government’s policies and actions.

He specifically called for deregulation of the country’s oil sector to boost investments and also save huge government revenue expended on fuel importation.

“Certainly, the challenges facing the country are daunting. Still, the year 2022 presents a unique opportunity for Nigeria to initiate tough economic reforms that will propel sustainable economic growth and inclusive development.

“Long-standing issues of deregulation of the downstream sector, foreign exchange scarcity and lower investments in key sectors must be given the utmost attention in 2022.

“The deregulation of the downstream oil and gas sector, for example, is needed at this critical time when massive investments are required to fix deteriorating refineries.

“This will address the predicament of huge importation of refined petroleum products that deprive the country of the foreign exchange required to meet other important obligations,” he said.

Mr Jaiyeola commended the Federal Government for launching the National Development Plan (NDP) 2021-2025 but warned that implementation of the plan would be crucial in determining its success.

“The NDP sets targets, priority areas, and action steps to be implemented in the five years.

“Success or failure of the plan will largely hinge on the level of implementation and coordination among government agencies, domestication of the plan by the state governments, and private sector’s commitment.

“More importantly, the government is expected to be a key driving force in creating a business-friendly environment, ensuring macroeconomic stability and mobilising investments across board.

“With just over a year left in office, the current administration must intensify the pace of reforms.

“This is especially given the impact of the twin challenges of poverty and unemployment on security and social cohesion.

“Economic and social reforms that will create jobs and improve the lives of Nigerians should be non-negotiable in 2022,” the NSG chief stressed.

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.


Three Securities Shore Up NASD Market Capitalisation by N14.99bn



NASD Unlisted Securities Index

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange closed the final trading session of the week in positive territory as it gained 1.49 per cent at the close of business on Friday, June 2.

This growth was spurred by the upward price movement in the share prices of three companies admitted on the trading platform of the unlisted securities exchange.

FrieslandCampina Wamco Nigeria Plc rose by N4.80 to close at N75.00 per share compared with the preceding day’s N70.20 per share, Central Securities Clearing System (CSCS) Plc gained N1.12 to move up to N15.20 per unit from N14.08 per unit, while Acorn Petroleum Plc added 1 Kobo to close at 15 Kobo versus Thursday’s closing price of 14 Kobo.

The improvement in the prices of the above stocks pushed the market capitalisation of NASD higher by N14.99 billion to N1.023 trillion from N1.007 trillion, as the NASD Unlisted Securities Index (NSI) recorded a 10.84 points gain to wrap the session at 739.21 points compared with 728.37 points in the previous session.

The market witnessed a 15.6 per cent rise in the volume of securities traded by investors yesterday to 1.2 million units from the 1.0 million units transacted a day earlier.

However, the value of shares traded by the market participants decreased by 69.9 per cent to N56.9 million from N189.5 million, as the number of deals declined by 46.7 per cent to eight deals from the 15 deals carried out in the preceding day.

Geo-Fluids Plc closed the day as the most traded stock by volume (year-to-date) with 832.1 million units worth N1.3 billion, Industrial and General Insurance (IGI) Plc has traded 627.7 units valued at N49.4 million, and UBN Property Plc has exchanged 395.9 million units worth N336.6 million.

The most traded stock by value (year-to-date) was VFD Group Plc with 11.0 million units worth N2.5 billion, Geo-Fluids Plc has exchanged 832.1 million units valued at N1.3 billion, and FrieslandCampina Wamco Nigeria Plc has transacted 17.1 million units worth N1.2 billion.

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Naira Falls at P2P, Gains at Black Market, Stable at Official Market



Black Market

By Adedapo Adesanya

The Naira moved in different directions in the various segments of the foreign exchange (FX) market on Friday as traders await the merger of the exchange rates by the Central Bank of Nigeria (CBN) as directed by President Bola Tinubu.

Business Post reports that the Naira depreciated against the Dollar at the Peer-2-Peer (P2P) segment, appreciated in the black market, and remained unchanged in the Investors and Exporters (I&E) window.

In the P2P, the value of the local currency to the greenback fell by N9 to sell at N764/$1 compared with Thursday’s value of N755/$1.

At the parallel market, the domestic currency gained N3 against the greenback to sell at N747/$1, in contrast to the preceding session’s N750/$1.

However, in the official market, the Nigerian Naira maintained stability against the US Dollar to remain unchanged at N464.67/$1, as the forex turnover went down by 60.6 per cent or $152.08 million to $98.90 million from $250.98 million.

In the interbank segment, the Naira depreciated against the British Pound Sterling by 91 Kobo to close at N575.28/£1 versus the previous day’s N574.37/£1 and slumped by 12 Kobo against the Euro to sell at N493.70/€1 compared with Thursday’s N493.58/€1.

As for the digital currency, Bitcoin (BTC) jumped by 0.2 per cent to sell at $27,203.27, Ethereum (ETH) appreciated by 0.7 per cent to quote at $1,904.59, Cardano (ADA) added 1.4 per cent to its value to finish at $0.3774, Ripple (XRP) recorded a 1.3 per cent gain to quote at $0.5254, Dogecoin (DOGE) improved its value by 0.6 per cent to close at $0.0726, and Solana (SOL) made a 0.3 per cent rise to sell at $21.13.

On the flip side, Binance Coin (BNB) fell by 0.6 per cent to sell at $306.43, and Litecoin (LTC) followed with a 0.5 per cent loss to trade at $94.72, as the US Dollar Tether (USDT) and Binance USD (BUSD) remained unchanged at $1.00 each.

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Oil Closes 2% Higher Ahead Crucial OPEC+ Meeting



seven offshore oil blocks

By Adedapo Adesanya

Oil rose over 2 per cent on Friday after the United States Congress passed a debt ceiling deal that averted a government default in the world’s biggest oil consumer and jobs data fueled hopes for a possible pause in Federal Reserve interest rate hikes.

The focus is now on a meeting of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, OPEC+, this weekend.

Brent futures rose $1.85 or 2.5 per cent yesterday to $76.13 a barrel, while the US West Texas Intermediate (WTI) futures appreciated by $1.64 or 2.3 per cent to $71.74 a barrel, the highest since May 26 for WTI and May 29 for Brent, but for the week, both contracts were down about 1 per cent, their first in three weeks.

The US Senate approved a bipartisan deal to suspend the limit on the government debt ceiling, following approval in the House of Representatives, staving off a default that would have affected the markets.

Also, employment in the world’s largest economy increased more than expected in May, but a moderation in wages could allow the US Federal Reserve to skip a rate hike this month for the first time in more than a year, which could support oil demand.

However, a jump in the unemployment rate to 3.7 per cent from 3.4 per cent in the prior month, a slowing in the pace of hourly wage growth, and a decline in hours worked indicate that the US central bank may go ahead with expected moves.

Oil traders will watch the June 4 meeting of OPEC+. The group in April announced a surprise production cut of 1.16 million barrels per day, but resulting price gains have been erased, and crude is trading below pre-cut levels.

Reports showed that OPEC+ could also be debating an additional oil production cut among possible options.

According to Reuters, three OPEC+ sources said cuts were being discussed among options for Sunday. The sources said cuts could amount to 1 million barrels per day on top of existing cuts of 2 million barrels per day and voluntary cuts of 1.6 million barrels per day that were announced in a surprise move in April.

The oil ministers of the 23-nation alliance will gather at 2 p.m. in Vienna (1 p.m. Nigerian time). Before then, OPEC ministers will meet at 11 a.m. (10 a.m.) on Saturday.

On the demand side, manufacturing data out of China, the world’s second-biggest oil consumer, painted a mixed picture.

In the US, energy firms this week slashed the number of oil rigs operating by the most since September 2021, reducing the overall count for a fifth week in a row, energy services firm Baker Hughes Co. said.

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