Economy
Nigeria’s Economic Growth “Jobless Growth”—LCCI
**Says GDP Still Below 3% Population Growth
By Modupe Gbadeyanka
The Lagos Chamber of Commerce and Industry (LCCI) has described the growth path of the Nigerian economy as still weak, vulnerable and fragile.
This was made known in reaction to the release of the Gross Domestic Product (GDP) figures of the Africa’s largest economy for the fourth quarter of 2018 by the National Bureau of Statistics (NBS) earlier this week.
The stats office said in Q4 of last year, the nation’s economy grew by 2.4 percent in contrast to the 1.8 percent recorded in the third quarter of the year.
According to the LCCI, this growth mirrored the performance of the non-oil sector which improved by 2.7 percent year-on-year, with the full year GDP improving by 1.9 percent better than the 0.8 percent growth achieved in 2017.
For the LCCI, this performance is still weak and fragile because it is far below 3 percent annual population growth, emphasising that this remains a cause for concern due to its wider on inclusive and sustainable growth in the country.
Taking a look at the sectoral contribution to overall GDP in 2018, crop production, trade and telecoms were the major contributors.
Agriculture expanded by 2.1 percent in 2018, recording the lowest growth since 1993, with crop production emerging as the major driver of this sector performance, accounting for 88 percent of agricultural output in 2018. In terms of contribution, agriculture accounted for 25 percent of real output in the year.
Also, the Crude, Petroleum & Natural Gas sector contributed 8.60 percent to the GDP last with average daily oil production at 1.91 million barrel per day in fourth quarter 2018. This was lower than the 1.95 MBPD recorded in same quarter 2017. The oil sector grew by 1.1 percent as against 4.69 percent recorded in 2017.
In the GDP numbers, the manufacturing sector recorded an annual growth rate of 2.09 percent in 2018, marking a significant improvement of -0.21 percent in the previous year, contributing about 9.20 percent to overall GDP.
Furthermore, trade sector contracted by -0.63 percent in 2018 from -1.05 percent and -0.24 percent in 2016, contributing 17.16 percent in 2018. The declining performance of this sector signifies that Nigerian consumers are still under severe pressure in terms of weak purchasing power, as trade is a major consumer facing sector.
However, Telecommunication and Information services sector grew by 11.33 percent in 2018 from -2.04 percent in 2017 and 2.03 percent in 2016, contributing about 10 percent to overall GDP.
In its notes, LCCI said the growth was far below the country’s population growth of 3.0 percent, with wider implications for poverty, inclusive and sustainable growth.
It pointed out that sectors such as Trade, Manufacturing and Agriculture recorded low performance, signifying weakness on the part of the consumers purchasing power.
“The growth in the economy is also tagged a ‘Jobless growth’ as unemployment keeps on rising. The latest report by poverty world clock also suggests that the number of extremely poor Nigerians has risen to 91.6 million.
“We suggest that policies and reforms that will attract investment into the key employment elastic sectors should be implemented,” the LCCI said.
By Adedapo Adesanya
The Naira further slipped against the United States Dollar by N2.33 or 0.17 per cent to N1,364.88/$1 from N1,362.55/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, August 6.
In the same vein, the domestic currency weakened against the Pound Sterling in the official FX market by 71 Kobo yesterday to trade at N1,838.09/£1, in contrast to Wednesday’s value of N1,837.38/£1, but against the Euro, it gained 45 Kobo to close at N1,574.80/€1 compared with the previous day’s N1,575.25/€1.
At the GTBank FX desk, the Naira improved its value against the US Dollar by N4 on Thursday to quote at N1,369/$1 versus midweek”s rate of N1,373/$1, but at the parallel market, it remained unchanged at N1,400/$1.
The NAFEM interbank FX turnover jumped to $98.804 million on Thursday, up by more than 31 per cent from $75.357 million the previous day.
Similarly, the number of deals at the NFEM interbank increased to 106 from 82, confirming higher US Dollar flows at the official FX market.
Traders expect the Naira to hold steady, buoyed by dollar sales by the Central Bank of Nigeria (CBN), whose presence in the market will help ease demand pressure.
In the cryptocurrency market, major cryptocurrencies were mostly down as the Senate delayed a vote on the Crypto Clarity Act until at least September.
The bill, which would set out which U.S. regulator oversees which digital assets, needs 60 votes to pass, and it is unclear whether it currently has 50. Several Republican senators have said publicly they oppose it, and Democrats want stricter rules preventing President Donald Trump from profiting from crypto while in office.
Ripple (XRP) shrank by 2.5 per cent to $1.02, Solana (SOL) depleted by 1.5 per cent to $72.86, Binance Coin (BNB) fell by 1.4 per cent to $587.41, Dogecoin (DOGE) tumbled by 0.9 per cent to $0.0692, Bitcoin (BTC) decreased by 0.6 per cent to $64,344.69, and Ethereum (ETH) tumbled by 0.3 per cent to $1,902.03.
However, Cardano (ADA) appreciated by 7.7 per cent to $0.2025, and TRON (TRX) rose by 0.3 per cent to $0.3267, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
By Dipo Olowookere
Buying interest in consumer goods, energy and banking stocks further raised the Customs Street by 0.12 per cent on Thursday despite profit-taking in the insurance and industrial goods sectors.
According to data from the Nigerian Exchange (NGX) Limited showed that the banking index grew by 0.62 per cent, the consumer goods space rose by 0.15 per cent, and the energy counter increased by 0.06 per cent, while the insurance sector crashed by 0.93 per cent, with the industrial goods segment flat.
At the close of business, the All-Share Index (ASI) went up by 297.10 points to 245,209.34 points from 244,912.24 points, and the market capitalisation gained N191 billion to finish at N158.278 trillion compared with the previous day’s N158.087 trillion.
Eterna led the gainers’ log yesterday after it chalked up 10.00 per cent to settle at N36.30, ACA Capital improved by 9.63 per cent to N11.95, Legend Internet expanded by 9.52 per cent to N4.60, FCMB jumped by 8.55 per cent to N12.70, and Honeywell Flour surged by 7.98 per cent to N17.60.
On the flip side, Fortis Global Insurance led the losers’ chart after it shed 10.00 per cent to trade at N2.52, Ecobank declined by 9.99 per cent to N72.10, Chellarams depleted by 9.85 per cent to N11.90, Thomas Wyatt dipped by 9.83 per cent to N3.21, and UPDC slipped by 8.45 per cent to N3.25.
During the trading day, 531.8 million shares worth N20.5 billion exchanged hands in 44,826 deals compared with the 824.1 million shares valued at N25.5 billion transacted in 48,114 deals on Wednesday.
This indicated that the volume of trades was down by 35.47 per cent, the value of transactions depreciated by 19.61 per cent, and the number of deals decreased by 6.83 per cent.
The busiest stock for the session was FCMB, which traded 131.7 million units for N1.6 billion, First Holdco transacted 43.5 million units worth N6.0 billion, AVA Capital exchanged 36.3 million units valued at N432.0 million, Chams traded 36.3 million units sold 36.3 million units valued at N149.8 million, and Access Holdings ended with a turnover of 24.4 million units worth N638.8 million.
By Adedapo Adesanya
Brent crude rose by 3.83 per cent or $3.04 to $82.29 per barrel on Thursday after an information that an Iranian parliament committee was reviewing a bill that would ban US and Israeli vessels from the Strait of Hormuz.
Also, the price of the US West Texas Intermediate (WTI) crude futures went up by 81 cents or 1.05 per cent to $77.29 per barrel during the session.
Under the apparent draft, Iran would ban American and Israeli ships from transiting the strait. Other nations that have harmed Iran would not be allowed to transit until compensation is paid, according to the draft. Iran would impose penalties on violators equivalent to 20 per cent of the value of cargo aboard a ship.
Market analysts noted that crude traders remain focused on the US-Iran agreements, and the longer the delays, the more prices will fade back to the upside.
Iran has warned Gulf states that any new US attack on its territory would trigger attacks on critical energy infrastructure across the region.
Before the Iran conflict began in late February, about one-fifth of global daily oil and liquefied natural gas supplies flowed through the Strait of Hormuz.
Meanwhile, Yemen’s Houthis said they carried out missile and drone attacks on “Saudi deployments” in Marib and Hadramout in Yemen on Thursday. This has led to elimination of Saudi-aligned fighters as well as destruction of military camps, weapons depots and vehicles.’
Also, Iran and Oman appear to be close to agreeing on joint management of the Strait of Hormuz with Iran’s foreign ministry spokesman, Esmaeil Baghaei, saying the deal with Oman was “in the final stages.”
Saudi Arabia has slightly lowered the official selling price for its flagship Arab Light crude oil to Asia in September.
Elsewhere, a major oil refinery in Russia’s Yaroslavl region was on fire after a big Ukrainian drone attack. The President of Ukraine Volodymyr Zelenskiy said the country’s military had hit two Russian oil refineries – the Bashneft-Novoil refinery in the republic of Bashkortostan, and the Slavneft-Yanos refinery in the Yaroslavl region.
