Economy
Nigerian Economy on Solid Path to Recovery with 5.01% Growth—FG
By Modupe Gbadeyanka
The federal government has expressed satisfaction with the 5.01 per cent growth in the gross domestic product (GDP) for the second quarter of 2021.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said this shows that the Nigerian economy was on the solid path to recovery.
Mrs Ahmed, while speaking at an Executive Intelligence Management Course 14 of the National Institute for Security Studies (NISS), Bwari, Abuja, said the administration of Mr Muhammadu Buhari has shown a strong commitment to sustainable development, governance and security despite the nation’s limited revenues.
At the event themed Governance, Security and Sustainable Development in Africa: Nexus, Challenges and Prospects, the Minister said, “The most recent GDP data which reports real growth of 5.01 per cent in the second quarter of 2021 is very encouraging news as it indicates the Nigerian economy is on a solid path to recovery.
“It is important to note that much of the growth was driven by the expansion of the non-oil sector of the economy where most Nigerians are employed.”
She further said due to its importance to every sector, especially the economy, the central government has made funds available to security.
“As an example, about 86 per cent of the 2021 Supplementary Budget was dedicated to the capital and recurrent expenditure needs of the security agencies to supplement the allocations in the 2021 amended budget,” she said.
While speaking on some key governance and security initiatives spearheaded by the Ministry and its agencies, Mrs Ahmed said that through Project Lighthouse, the federal government has been able to aggregate N5.2 trillion worth of debts owed to the government by third parties, of which N49.7 billion of this amount has been recovered.
She also said another initiative is the Treasury Single Account (TSA), a unified structure of government bank accounts that enables consolidation and optimum utilisation of government cash resources.
In addition, she said her ministry came up with the Government Integrated Financial Management Information System (GIFMIS), an IT-based system for budget management and accounting to improve public financial management processes and enhance accountability and transparency across all ministries, departments and agencies (MDAs) of government.
Mrs Ahmed also said in order to modernise tax administration in Nigeria, the Federal Inland Revenue Service (FIRS) introduced TaxPro Max, while the Nigeria Customs Service (NCS) designed the e-Customs Project meant to fully automate administrative processes by introducing innovative measures that eliminate paper-based functions.
The Minister, in addition, said another policy is the Road Infrastructure Tax Credit Scheme (RITCS) launched by President Buhari through Executive Order Number 7 signed on January 25, 2019.
“It is designed to leverage private sector capital, efficiency and expertise to construct, repair and maintain critical road infrastructure in key economic corridors and industrial clusters in Nigeria. The scheme relieves the government of the burden of funding significant outlays for road projects through the annual budget.
“Essentially, the RITCS utilises tax expenditures, by way of tax credits, to finance the construction of critical road and bridge infrastructure through an innovative public-private partnership (PPP) mechanism that incentivises private sector participation. Since inception, Mr President has approved a total of 33 road projects, totalling 1,564.95 km being undertaken in 19 States across the six geo-political zones of the country,” she said.
She also highlighted the Open Government Partnership (OGP), an international multi-stakeholder initiative focused on improving transparency, accountability, citizen participation and government responsiveness to citizens through technology and innovation.
“Since joining the partnership in July 2016, Nigeria has made progress in deepening transparency, accountability and openness in the management of public resources, especially in terms of the budget process,” she said.
Mrs Ahmed further stated that the Office of the Accountant General of the Federation (OAGF) in December 2019 launched the Open Treasury Portal, a platform aimed to enhance the accountability of government by detailing and tracking federal government spending data through the publishing of monthly fiscal accounts, as well as daily treasury and payment reports amongst others by MDAs.
By Dipo Olowookere
The local stock market firmed up by 1.13 per cent on Friday as appetite for Nigerian stocks remained strong.
Investors reacted well to the 2026 budget presentation of President Bola Tinubu to the National Assembly yesterday, especially because of the more realistic crude oil benchmark of $64 per barrel compared with the ambitious $75 per barrel for 2025. This year, prices have been between $60 and $65 per barrel.
Business Post observed profit-taking in the commodity and energy sectors as they respectively shed 0.14 per cent and 0.03 per cent.
But, bargain-hunting in the others sustained the positive run, with the consumer goods index up by 3.82 per cent.
Further, the industrial goods space appreciated by 1.46 per cent, the banking counter improved by 0.08 per cent, and the insurance industry gained 0.04 per cent.
As a result, the All-Share Index (ASI) increased by 1,694.33 points to 152,057.38 points from 150,363.05 points and the market capitalisation chalked up N1.080 trillion to finish at N96.937 trillion compared with Thursday’s closing value of N95.857 trillion.
A total of 34 shares ended on the advancers’ chart, while 24 were on the laggards’ log, representing a positive market breadth index and bullish investor sentiment.
Austin Laz gained 10.00 per cent to close at N2.42, Union Dicon also jumped 10.00 per cent to N6.60, Tantalizers increased by 9.80 per cent to N2.69, Aluminium Extrusion improved by 9.78 per cent to N12.35, and Champion Breweries grew by 9.71 per cent to N16.95.
Conversely, Sovereign Trust Insurance dipped by 7.42 per cent to N3.87, Royal Exchange lost 6.84 per cent to trade at N1.77, Omatek slipped by 6.84 per cent to N1.09, Eunisell depreciated by 5.88 per cent to N80.00, and Eterna dropped 5.63 per cent to close at N28.50.
Yesterday, traders transacted 1.5 billion units worth N21.8 billion in 25,667 deals compared with the 839.8 million units sold for N32.8 billion in 23,211 deals in the preceding session, showing a surge in the trading volume by 76.61 per cent, an uptick in the number of deals by 10.58 per cent, and a shrink in the trading value by 33.54 per cent.
By Adedapo Adesanya
Three stocks stretched the bearish run of the NASD Over-the-Counter (OTC) Securities Exchange by 1.21 per cent on Friday, December 19, with the market capitalisation giving up N26.01 billion to close at N2.121 billion compared with the N2.147 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropping 43.47 points to 3,546.41 points from 3,589.88 points.
The trio of FrieslandCampina Wamco Nigeria Plc, Central Securities Clearing System (CSCS) Plc, and NASD Plc overpowered the gains printed by four other securities.
FrieslandCampina Wamco Nigeria Plc lost N6.00 to sell at N54.00 per unit versus N60.00 per unit, NASD Plc shrank by N3.50 to N58.50 per share from N55.00 per share, and CSCS Plc depleted by N2.91 to N33.87 per unit from N36.78 per unit.
On the flip side, Air Liquide Plc gained N1.01 to close at N13.00 per share versus N11.99 per share, Golden Capital Plc appreciated by 70 Kobo to N7.68 per unit from N6.98 per unit, Geo-Fluids Plc added 39 Kobo to sell at N5.50 per share versus N5.11 per share, and IPWA Plc rose by 8 Kobo to 85 Kobo per unit from 77 Kobo per unit.
During the trading day, market participants traded 1.9 million securities versus the previous day’s 30.5 million securities showing a decline of 49.3 per cent. The value of trades went down by 64.3 per cent to N80.3 million from N225.1 million, but the number of deals jumped by 32.1 per cent to 37 deals from 28 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc finished the session as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units traded for N4.9 billion.
The most active stock by volume on a year-to-date basis was still InfraCredit Plc with 5.8 billion units worth N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Adedapo Adesanya
It was not a good day for the Nigerian Naira at the two major foreign exchange (FX) market on Friday as it suffered a heavy loss against the United States Dollar at the close of transactions.
In the black market segment, the Naira weakened against its American counterpart yesterday by N10 to quote at N1,485/$1, in contrast to the N1,475/$1 it was traded a day earlier, and at the GTBank forex counter, it depreciated by N2 to settle at N1,467/$1 versus Thursday’s closing price of N1,465/$1.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX) window, which is also the official market, the nation’s legal tender crashed against the greenback by N6.65 or 0.46 per cent to close at N1,464.49/$1 compared with the preceding session’s rate of N1,457.84/$1.
In the same vein, the local currency tumbled against the Euro in the spot market by N2.25 to sell for N1,714.63/€1 compared with the previous day’s N1,712.38/€1, but appreciated against the Pound Sterling by 73 Kobo to finish at N1,957.30/£1 compared with the N1,958.03/£1 it was traded in the preceding session.
The market continues to face seasonal pressure even as the Central Bank of Nigeria (CBN) is still conducting FX intervention sales, which have significantly reduced but not remove pressure from the Naira. Also, there seems to be reduced supply from exporters, foreign portfolio investors and non-bank corporate inflows.
President Bola Tinubu on Friday presented the government’s N58.47 trillion budget plan aimed at consolidating economic reforms and boosting growth.
The budget is based on a projected crude oil price of $64.85 a barrel and includes a target oil output of 1.84 million barrels a day. It also projects an exchange rate of N1,400 to the Dollar.
President Tinubu said inflation had plunged to an annual rate of 14.45 per cent in November from 24.23 per cent in March, while foreign reserves had surged to a seven-year high of $47 billion.
Meanwhile, the cryptocurrency market was dominated by the bulls but it continues to face increased pressure after million in liquidations in previous session over accelerating declines, with Dogecoin (DOGE) recovering 4.2 per cent to trade at $0.1309.
Further, Ripple (XRP) appreciated by 3.9 per cent to $1.90, Cardano (ADA) rose by 3.5 per cent to $0.3728, Solana (SOL) jumped by 3.4 per cent to $126.23, Ethereum (ETH) climbed by 2.9 per cent to $2,982.42, Binance Coin (BNB) gained 2.0 per cent to sell for $853.06, Bitcoin (BTC) improved by 1.7 per cent to $88,281.21, and Litecoin (LTC) soared by 1.2 per cent to $76.50, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
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