Economy
Nigeria to Quit Recession 2017, Devalue Naira Again—FBNQuest Research
By Modupe Gbadeyanka
A research carried out by FBNQuest Research has predicted that Nigeria’s economy will leave recession this year and grow by 2 percent.
However, it pointed out that there would be another devaluation of the Naira in 2017.
In June 2016, the Central Bank of Nigeria (CBN) floated the Naira in a bid to give the local currency strength at the foreign exchange market. But this seems not to have worked because the Naira has lost over N150 against the Dollar since then.
At the moment, the Naira is N516 to $1 at the parallel market compared with about N342 it was sold in June 2016.
In the report titled ‘2017 Outlook So much to do; so little time,’ it was noted that the fiscal stimulus for this will be the main driver, supported by a recovery in oil production and selective private investment.
“Beyond our forecast horizon, household consumption will recover, leading to an acceleration in growth,” part of the report said.
According to FBNQuest Research, “The 2017 budget proposals are still more expansionary than the previous year’s, set a heady target for capital releases and maintain the level of personnel costs. If the FGN is able to hit its revenue targets and implement its proposals, we will see a sizeable fiscal stimulus. We could have the rare bonus of a relatively fast passage of the budget.”
It described the 2017 budget proposals as “ambitious”, noting that it contains aggregate spending of N7.30 trillion including unprecedented capital releases of N2.24 trillion, aggregate revenues of N4.94 trillion and a mouth-watering FGN deficit of N2.36 trillion.
The report identified these as “hefty increases on the 2016 budget and even larger increases on the likely outturn for 2016. “
It said one change for the better is that the FGN has produced more realistic projections for non-oil revenue collection, and assumed that the oil economy will generate more revenue than the non-oil.
“The fiscal expansion is the base of our GDP growth forecast of 2 percent for this year. We hear that we are being overly hopeful: we would reply that the population is said to be growing at 3.2 percent per year and that we are forecasting a decline in per head incomes.
“Our forecast is supported by selective private-sector investment (as in agriculture and petrochemicals) and by a pick-up in oil production.
“Our thinking is that the FGN has no choice but to reach a compromise to restore stability to the Niger Delta.
“It has said repeatedly that the diversification of the economy hinges ironically upon healthy oil revenues.
“Initially, it did not want to continue paying the allowances to militants in the delta but has reluctantly changed its position,” the report noted.
FBNQuest Research says it sees a rise in crude production including condensates to 2.10 mbpd this year from an estimated 1.82 mbpd. The FGN is assuming 2.20 mbpd in its proposals.
It said further that, “On the average oil price assumption of $44.50/b for this year, in contrast, the proposals are conservative.
“Our expectation is $57/b with some upside. The FGN therefore should have some welcome headroom, which it will value if production underperforms. Our thinking is based on hints from OPEC that, when it next meets in May, it may make further cuts in production quotas if it is not happy with the direction of the price.”
Also, the report observed that the “signals from the CBN, the MPC and the political leadership indicate otherwise but we think that there will be devaluation in Nigeria in 2017.”
It explained that, “While we cannot detect any changes in the official mindset on the exchange rate, we see another devaluation this year in the ‘last resort’ category. The CBN will struggle to resist the urge to manage the rate in some way.”
It pointed out that the economy has need of sizeable autonomous forex inflows to meet legitimate import demand, close the gap between the interbank and other forex markets, and create a market in which the CBN is not the dominant player.
The report argued that the monetary authorities are not equipped to counter both GDP contraction and rising inflation. Their task will be clearer when positive growth returns and inflation starts to slow on positive base effects.
It said, “The next rate moves by the MPC should be downwards, in line with (or perhaps anticipating) steady declines in headline inflation.”
Commenting on the stock market, the report said it expects the market to trade sideways for the most part until some clarity on the forex situation emerges.
“If a resolution leads to a free float regime (or very close to it), we expect a surge in capital inflows. Our base case scenario is a 10 percent rise in the ASI for 2017 based on our fair value forecasts. A resolution of the forex situation could lead to a gain of at least 20 percent.
“We see upside potential of up to 10 percent for the banks sector on average; a marked resumption of capital inflows from offshore portfolio investors could lead to a much stronger performance.
“We forecast the average ROAE for our universe of banks to move up to 18.3 percent in 2016E, thanks to forex-related gains, but subsequently fall sharply to 11.2 percent in 2017E (assuming forex-related gains are not material in 2017E).
“Among the non-financials, we prefer the cement and palm oil names for which we see upside potential of 56 percent and 6 percent respectively on average.
“The other sectors continue to struggle with the headwinds stemming from forex devaluation given their high dependence on imported raw materials and/or FCY loans.”
On the federal government’s bonds, the report said, “FGN bond yields are likely to drift higher before the policy rate cuts due to the fiscal expansion and substantial issuance programme.
“Active investors will prefer the better returns on longer tenor NTBs. After three years of consecutive losses, we expect equities to regain some lost ground this year. We forecast the ASI to return 10 percent, implying an end-year target of 29,560.”
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further appreciated by 0.23 per cent on Thursday, April 23, with the Unlisted Security Index (NSI) adding 8.99 points to close at 3,969.96 points against the previous day’s 3,968 points.
The rise in the share price of Central Securities Clearing System (CSCS) Plc by N2.86 to N69.34 per unit from N66.48 per unit raised the market capitalisation of the NASD bourse by N5.38 billion to N2.380 trillion from N2.375 trillion.
Yesterday, there were two price losers, led by Food Concepts Plc, which lost 29 Kobo to sell at N2.65 per share versus N2.94 per share, while UBN Property Plc dipped by 22 Kobo to N2.03 per unit from N2.25 per unit.
During the session, the volume of securities traded declined by 97.9 per cent to 451,522 units from 21.5 million units on Wednesday, the value of securities depreciated by 52.32 per cent to N23.6 million from N49.5 million, and the number of deals depreciated by 3.6 per cent to 27 deals from 28 deals.
At the close of business, 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 CSCS Plc with 59.5 million units exchanged for N4.0 billion, and Okitipupa Plc with 27.8 million units traded for N1.9 billion.
GNI Plc also closed the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units transacted for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units sold for N1.2 billion.
By Adedapo Adesanya
Fresh foreign exchange (forex) demand pressure saw the Naira depreciate against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 22, by N5.46 or 0.4 per cent to trade at N1,353.91/$1 compared with the preceding day’s value of N1,348.45/$1.
It was the same outcome for the local currency in the official market after it depreciated against the Pound Sterling by N4.13 to close at N1,825.88/£1, in contrast to the preceding session’s N1,821.75/£1, and against the Euro, it dropped 72 Kobo to finish at N1,582.72/€1 versus N1,582.00/€1.
But the Nigerian Naira appreciated against the US Dollar at the GTBank FX desk by N2 during the session to quote at N1,361/$1 compared with Wednesday’s closing price of N1,361/$1, and at the parallel market, it closed flat at N1,375/$1.
FX Pressure came as data showed that NFEM interbank turnover was N28.117 million, lower than the N66.084 million recorded the previous day.
Concerns over liquidity pressures, policy transparency, and confidence in Nigeria’s FX market continue to grip the market while the country’s foreign reserve declines further, even as the Central Bank of Nigeria (CBN) recently said that the recent decline in Nigeria’s external reserves should not be a cause for concern.
Global developments also played a significant role, as rising geopolitical tensions boosted demand for the US Dollar, further weakening emerging market currencies, including the Naira.
As for the cryptocurrency market, there was a mixed outcome as traders reacted to rising geopolitical tensions from the Iran war and fresh inflation data from Japan.
Japanese inflation ticked higher in March, stoking expectations that the Bank of Japan may soon signal rate hikes, which could strengthen the yen and unsettle global risk assets.
The Iran conflict has disrupted oil flows through the Strait of Hormuz, raising energy costs and inflation risks worldwide and potentially complicating efforts by the Federal Reserve to cut interest rates.
Ethereum (ETH) declined by 1.8 per cent to $2,316.53, Bitcoin (BTC) lost 0.6 per cent to sell at $77,935.53, Solana (SOL) fell by 0.5 per cent to $85.67, and Binance Coin (BNB) dropped 0.4 per cent to sell for $634.85.
However, Dogecoin (DOGE) appreciated by 1.4 per cent to $0.0976, Ripple (XRP) grew by 0.7 per cent to $1.43, Cardano (ADA) expanded by 0.6 per cent to $0.2493, and TRON (TRX) improved by 0.2 per cent to $0.3279, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Aduragbemi Omiyale
The resilience shown by Nigerian Breweries Plc in the 2025 fiscal year, despite a volatile macroeconomic environment, which consumed several businesses, has not got without notice.
Shareholders of the brewery giant applauded the board and management for the strong recovery and improved profitability recorded in the year.
At the company’s 80th Annual General Meeting (AGM) on Wednesday, April 22, 2026, in Lagos, they attributed these achievements to disciplined cost management and a significant reduction in finance expenses.
“We are proud of how the company has withstood the ups and downs of a challenging environment. The return to profitability and the reversal of the negative cash position recorded in the previous two financial years are commendable,” a member of the Noble Shareholders Association, Mr Owolabi Opeyemi, said at the gathering.
Also, the immediate past Secretary of the Independent Shareholders Association of Nigeria (ISAN), Mr Eke Emmanuel, noted that the company’s resilience reflects strong leadership and a sound strategic direction.
“It is good news that we have been here for 80 years. There is no reason why we will not be here for the next 80 years with what we have achieved. To return to this level of profitability and cash position shows the Board has done an enormous amount of work,” he said.
Addressing investors at the AGM, the board chairman, Mrs Juliet Anammah, expressed confidence that the company is firmly on a recovery path following the net losses recorded in the past two years due to macroeconomic pressures and fiscal reforms.
She thanked shareholders for their continued support and reaffirmed that the company will build on its 2025 performance as it accelerates growth ambitions.
“We have a solid foundation built over eight decades, anchored on a strong portfolio of brands, an extensive nationwide sales and supply chain network, ongoing digital transformation, and most importantly, our people. These strengths remain critical to sustaining our leadership position,” the former chief executive of Jumia Nigeria said.
Ms Anammah also addressed the company’s dividend position, noting that the decision not to declare a dividend reflects the need to rebuild retained earnings impacted by prior macroeconomic shocks, particularly foreign exchange-related losses.
“We recognise the importance of dividend payments to our shareholders and sincerely appreciate your continued understanding. While we are not declaring a dividend at this time due to negative retained earnings, we are working diligently to restore the company’s financial position and return to dividend payments as soon as it is sustainable to do so,” she added.
She further noted that the board remains vigilant to external risks, including the Middle East crisis and broader macroeconomic challenges, which may impact the pace of improvement in the 2026 financial year.
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